Know When To Hold ‘em and When to Fold ‘em

In today’s post, David “The Diamond” Oswald helps us understand when to hold ‘em and when to fold ‘em …

When is it best to proceed with a deal and when is it better just to step away from it?

I had a recent situation that inspired this article and decided to put it on paper because it involves an important topic of real estate and something that many other investors ask me about:

What is a motivated seller and how can you tell the difference between someone who is motivated and someone who is not?

A motivated seller is someone who is absolutely ready to do business and is craving for you to help them. It’s not someone who wants to have multiple conversations to get to know you, followed by you coming out to snap some pictures of the house, followed by another week or two of them having an attorney look at the documents, followed by another week of them discussing it with their spouse.

I don’t care how great the deal may appear, if your seller does not NEED your services, then you’re probably setting yourself up for a lot of wasted time and a big disappointment in the end.

If you have to consistently call the seller and convince them as to why your service is important, that again is not a motivated seller. If you find that your day consists of calling back people who are in foreclosure and always following up with old leads, you’re probably not generating enough new ones and your business is going to be stagnant and lead to disappointment.

I recently went to northern New Jersey to get a 4 family house under contract that had two mortgages. The house needed repairs. I spoke with the owner twice, explained the process, and it seemed I was hot on the trail of a motivated seller.

However, when I showed up at the property, the owner was 20 minutes late. Ok, nothing to get too excited about. But, his next item of business once he showed up was to spend about 20 more minutes arguing with a tenant. Now, I was starting to feel as if he was eating into my time. I normally spend less time than that in total at the property.

Finally, after I had snapped a few pictures, I took him aside and said that I would like to go over the documents which I had already briefed him on over the phone. It was at that point, he asked a few questions that to me indicated there was still a bit of indecision on his part. I think in the back of his mind he believed that his realtor might still get the property sold. Meanwhile, the realtor had the property listed for over 6 months, and there hadn’t been any offers above what he owed on the property.

So I stood there a minute, did a mental evaluation of where I thought I was with this seller, stared him in the eyes and said, “You know what, at this point, I’ve decided not to do business with you.”

I thanked him for his time and went to the car where my driver was waiting (I usually pay a notary to drive me). As I walked away, the seller attempted to open up talks again and was even knocking on the window as I began driving away. But my decision was made. He had a combative spirit, and I determined he was a motivated seller in sheep’s clothing.

Even though I wasted an hour, I still look at that deal as a win for me because earlier in my career, I might have walked right into that one …

But this time, I knew when to fold ‘em!

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David Oswald (aka “The Diamond”) is a national real estate short sale and foreclosure expert who speaks throughout the United States on creative real estate investing and outsourcing strategies.

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Tags: creative real estate investing, david oswald, david the diamond os, david the diamond oswald, motivated sellers, real estate investing, Real Estate Investment Buying Strategies

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