Secret negotiating strategy to still get deals at 50% off - Dean Graziosi Weekly Wisdom

Hey, everybody. Welcome to the Weekly Wisdom. I'm Dean Graziosi here with my good friend and incredible real estate investor, Matt Larson. What's up, Matt?

How's it going?

Crowd goes crazy. If you're new to us, Matt Larson is a machine shop worker. Bought my book seven years ago and now one of the best real estate investors I know. Done over, you know, thousands of deals. And my office is back there and Matt's office is right there and Matt's assistance there and mine's over there. So we're here talking real estate literally every day of our lives. I mean, we run a lot of different things. We run our education and I write my books and we run Dean Graziosi.com and create our TV shows and all that stuff comes out of this office. But the majority of this office, the most people in this office are working on doing real estate deals every single day. That we're not in this business pretending that we know what to do. This is what we do every single day. And that's why our education is so cutting edge, because it's learned literally on the ground and we get to push it out immediately. So some really cool stuff. You know, the market's evolving, we're loving the way things, things are going, different trends coming. But I was just in Matt's office talking about some great deals we got in the last 10 days. Some really killer deals in areas where people said, hey, there's no good deals left. And one of the things I thought would be really powerful and I'm going to let Matt cover it is negotiating and getting deals cheaper than what you think you can. So many people. I talked to Matt, you too when you used to be out on the road training my students. Right. Matt helped forge the whole in house mentor. Matt was my first student turned trainer. I don't know, five, six years ago.

Yeah.

And now we've had so many and thousands of appointments sent in and so many successful students. But Matt helped me pioneer that. But so many people will say, wow, I found this deal off of the mls, but I don't want to offer the person a low price or I'm scared to do it or how did you get that price so cheap? And he is the master. It is. There is zero emotion. He's not out to hurt anybody. He wants to make it a win win. But Matt is the absolute master at getting the most reduced price possible. And how I know it's replicatable because Matt's Matt, right. He's an above average guy that rocked it. But his assistant, Amanda, I could see her from where I'm sitting, is doing most of your negotiating. Now.

I have her do 100%. I mean, I'll coach her sometimes when she comes as a question, but 95% of the offers come directly from her, following the lead sheet that provide and then her making the offer.

Yeah. Isn't that amazing? So what we realized is. And him and I just had this conversation. When you take the emotions out of it, Amanda is just doing what Matt asked her to do. Right. You were saying before, she doesn't overthink it. She doesn't get her heart involved. She doesn't over. You just say, hey, this house, they're asking 100 grand. Try to get it for 25 grand. I mean, literally this week, you picked up some network. It blew my mind. I was thinking we'd get them for 50 grand or whatever that. I mean, the number was about 50. You got them for 25. And I said, good job. You're like, it really wasn't me. It was Amanda. So I just thought it'd be really important today to share that with you on how Matt teaches others and how he personally negotiates to get the best deal possible.

Yeah, and one thing I want to mention, too, is when I, you know, for example, Amanda is my assistant. I also have Christina in the other room. She's in a different. She negotiates for a different part of the country. But Amanda covers two areas. And one thing to remember, she's looking at it. She works for me. It's a job for her. So she just simply does what I pay her to do, you know, Whereas. So when I tell her, hey, I know they're asking $50,000 on this house, but I want you to offer 25,000 to her. It's her job. That's what she does. She has to push the fear aside and just say, you know, I'm gonna make the offer. All the students out there need to do the same thing. Just pretend it's your job to make that offer. Stop thinking it. Oh, you know, what if they yell at me? What if they're mad? What if they say, no, whatever it is, and just make the offer and kind of go from there.

That's a great point. And there's a process. It's not just, oh, they want 50 grand. I'm say, hey, take 25 or beat it. Right. There's a process, and I think that'd be great for you to go over there.

Yeah, I'm jump up on the whiteboard and let's Just talk some of this through, okay? And one thing I want to mention to everybody is as I go through this deal now, these deals are actually off market deals. We used creative marketing techniques to find some deals that weren't on the mls. And remember, that's a big advantage right now because you know, if it's on the mls, you're going to have a lot of people making offers on those properties. And you'll hear a lot of people talk right now about, you know, I went to go make an offer on a property and there was 14 other offers or 30 other offers or whatever it was and you know, stuff selling for over asking price and that, that can happen on the mls. Although I still buy a lot of properties from the mls, so does Dean, so do a lot of students. You, if you use the 25 to 1 correctly, you'll always be able to pick deals there. But what we're saying is, is if you get a deal that's not listed on the mls, you have a lot less competition and you can generally get those houses for a lot less money. So that being said, I want to go through, we have a lead sheet that we use to track every single deal as we're trying to put the numbers together. But this lead sheet also talks about or basically kind of walks you through the steps on how to negotiate. So I'm going to go through this briefly and then we'll talk about a couple of deals that we actually got accepted this week. So the first deal I wanted to talk to you guys about the asking price on it. Write down the asking price. The asking price was he wanted $50,000. Okay. Now what we do is once we have an asking price, if the, if the price, like I know the areas really well, some of you guys are brand new in some of your areas and you have to do a little more legwork up front. But I saw the address. This is an area I buy. And I knew at that point that that house was potentially good enough for me to keep going. So we actually ran comps on that house to prove that. My thoughts that it was a pretty good deal. So we had my realtor run comps. They ran comps and it comped out the ARV. The after repaired value was 84,000. Okay. So you might say, man, that's already a good deal as it is depending on repairs. So then we took a look at the repairs and the repairs are going to be about $7,500. So actually already been rehabbed, but we like to add in about $7,500 for repairs, even if the person says it's in move in condition. Although this one had a couple of issues because, you know, the way we make our houses, we make them pretty nice. So the asking price was 50,000. It was worth 84. Didn't need a lot of rehab. You take a look at the numbers, you'll say, oh, this is a pretty good deal now. But that's not our goal. Our goal is to get killer deals. So as you go through this lead sheet, you know, it asks the general question first. How did you hear about us? And the reason that's important is if you're putting ads on Craigslist that you buy houses, you know, we buy houses. Any condition on a phone number or if you're running bandit signs or however you're doing your marketing direct mail and somebody calls you, you want to know, how did that person find you? Because there's an old saying in marketing. I know 50% of my marketing is working, but I just don't know which 50%. So you want to make sure you know, because if you find something that's really working, you really push hard on it. So how did you hear about us? Write down the seller's name, their email, you'll ask them what the property address is. And then is it a single family home? You know, multi family, whatever. We have a little place you can just circle. Then you want to know the number of bedrooms and bathrooms, whether or not there's a garage and or a basement, if there's a pool. In some areas, pools are really important. Other areas, they actually hurt the value. This is in the Midwest, so we generally buy properties that don't have pools. Ask them the square footage. Now the next question is, what is where? We kind of get where this sheet starts getting into the negotiation. So we ask, you know, what kind of repairs are needed. So what this is doing, this is doing two things. One is, what it's doing is it's getting the person that owns the house to verbally commitment. There are problems with the house. So he might have thought, you know, hey, you know, this house is worth $80,000. I'm going to ask 50. But then you said, what type of repairs are needed? He says, well, you know, the ceiling's fallen in underneath the bathroom because the, you know, the sink overflowed and it caused the drywall to crumble a little bit. Or, you know, this couple of windows are broken, or this room needs painted, or the kitchen needs countertops. Whatever it is you're personally asking what types of repairs are needed to put this thing in mint condition? So he's listing those, and subconsciously what he's doing is he wanted to ask this price, and all of a sudden he's like, okay, maybe I need to ask. Maybe I need to sell this thing for less. So then, so let's say he names all those or the seller names all those issues. Then you want. The next question is, what would you put as a cost to put this house to fix all those issues? Cost to put it in mint condition. So the reason that's important is because there's a lot of, you know, there's a lot of TV shows out there on real estate, and they all give, you know, they'll say, hey, I'm going to come in and, you know, rehab this house. You probably guys have probably all seen those types of TV shows where they'll say, you know, new roof, $15,000, new kitchen, 40,000. And the thing is, mentally, most people think it costs much, much more to fix the house than it actually does. So this seller might think, well, you know, I need new countertops in this kitchen. And, you know, I just saw on, you know, a home repair show that it was $2,500 to put new countertops in, when in reality, you know, you might be able to get them done for $1,000 or less, or carpet or flooring or any other types of repairs. So the reason that's important is you want them to name the cost, not for what you can do. But there again, it's psychological. If you know, you can get those repairs done for $10,000 and the seller says, it'll cost me $20,000, well then subconsciously, they just cut down that price again. So then the next thing we ask is, why are you selling? So this is important. We want people that. We don't want somebody that wants to sell. We want people that have to sell. And if this person says, well, you know, I'm just looking to. I want to find a little bit better neighborhood that's want to sell. If the person says, well, you know, I just got a new job and I'm moving across the country, and, you know, I got to sell this house in two weeks. That's half to sell. So one of the things that we did here was when I. When I got the asking price, I asked. Actually, Amanda, my assistant, she filled out this entire sheet on this particular deal. I didn't have to help her. So she asked, why are you selling? And the guy said, he lives in Illinois. He's moving to Florida in two weeks. Okay. So I knew it was a situation where it has to sell. So he had actually had three houses. This was one of them. So he wanted 50,000, probably trying to get it a reduced price. We just asked him all these questions. He's thinking, it's going to cost a lot more. We made an offer. The offer, 25,000, 50% below asking price. Now, he called back, and I didn't make the offer. My assistant made the offer. And I also told her to say this, and this is also important. This is something you can still use. Even though I know the market's going back up, still a lot of foreclosures. I just said, you know, I said, you know, make an offer for 25,000. The whole goal here is to not offend the seller. And I just said, hey, just, you know, just tell this. Tell the seller. Just say this. Hey, you know, the best we can do is 25,000. You know, the challenge is there's so many other foreclosures in the area that we could just go down the street and buy one for cheaper. So, you know, what we can do is 25,000. So she made the offer, and he said, you know, I have to think about it. He called her back, and he said, you know what? I can do 30,000. So he came down $20,000 off of that first offer. Now, that's a big percentage off. So Amanda came back to me and said, hey, you know, you know, we made the offer for 25,000. He countered us at 30. What do you want to do? I said, just stay. I knew, why are you selling? I'm moving to Florida in two weeks. I knew he had to sell. So he came back, and she came back, offered him 25 to say, this is where this is our best price. He came back, and he accepted it. So we were able to get from 50 to 25 just by following this sheet. So here's the other thing I want to say. So now think about this. This house for 25,000 worth, legitimate 84. This is what my realtor said that she could sell the house for needs, very little repairs. There's several different things we could do. I could, you know, say, you know what? I'm just going to wholesale this house, mark it up 20 grand. Because all the foreclosures in the area. You hear Dean and I always talking about the highs and lows, all the foreclosures in this area, and this is a really important number. The REOs in this area sell for 45,000 minimum and higher. Okay, so think about that. The lowest foreclosures you can find in this neighborhood are 45 grand. So what we could do with this house now that we have it under contract is we could just mark it up $20,000 and wholesale it. Or we could fix it up and put it back on the market for 84,000, and after expenses, probably make 30,000, 35,000. So that's just an example of one of the deals that we did this week. There were several that we got under contract. We even had one house that the seller said, you know what? I inherited this house. There's some back taxes on the house. You can have the house for free. The back taxes are $10,000. The house is worth about 55,000. So we can literally just take over a house. Those are the kind of leads you'll get if you do marketing, like bandit signs and Craigslist and find some houses that aren't listed. And imagine that. I mean, if somebody put a house on the MLS for, you know, hey, pay off my taxes, the price is zero. You know, that house would shoot up to. In this particular case, price shoot up to 40,000 in the. In a bidding war. So anyway, I just wanted to cover that. I don't know. Dean, do you want.

No, that's.

That's.

That's amazing. You know, the thing is, you know, what I love, too, is one of the other things. So here's what I'll do. I'm digressing this lead sheet that Matt created that Amanda uses, and we teach students all over the country. If you're in our advanced education already, you probably have it. If not, at dean graziosi.com you might be watching on YouTube or on iTunes. But@d dingraziosi.com I'll put a link below the video so you can have this lead sheet and use it. You know, one other thing I love, too, is asking them how much they owe on the house, right? If you. Years ago, one of the. If this person owed 40 grand on that house, could have met. Have gotten it so cheap. Absolutely not. You need to find people that owe a minimal amount or nothing. And one of the questions I love that you converted years ago is instead of saying, how much do you owe? That could offend somebody. You say to someone, would you be willing to take what you owe on the property? And in most cases, people say, no, I don't owe anything.

Boom.

That's another positive. So remember, when you negotiate, if you make it a system and take the heart out and do it with your mind in a process, like Amanda does, like Christine does, like countless students of mine all over the country do. Then at the end, at the end, you get to the price you want or you pass with a smile. And let me ask you all your years and thousands of deals. And I know you've got deals that were worth a hundred for ten grand and some that you couldn't get, right. But have you ever had anybody yell at you or mad at you once they said yes.

No. In fact, never. No. I've always had people where they'll, I'll buy a house that's worth 80. Let's say I'll get it for 20,000. I, a lot of times will get an email or a phone call after the sales done and it's closed. Thank you for buying.

Right. Because here's the thing. Some people may want $2 two years or $2 in nine months where someone else is just as happy taking a dollar today. Sometimes time is worth a lot to people. Like here this guy was moving to Florida. If he wanted to put it on the MLS, maybe he would have got his 50, but he wanted to sell it today because he was leaving in two weeks and didn't want the past to come along with him. So guys, this is such an important lesson. It's so powerful. I know we made this video long today, but I think how, I just, I know how strong it is. There's still great deals. We're buying these deals in areas where people are saying there's no good deals left. So get on your creative marketing. Use this lead sheet. There'll be a link@deengraziosi.com and lastly, if you're watching us from iTunes or on YouTube, make sure you go to deansfreebook.com that's deansfreebook.com and go get my latest book. It's not a special report. I'm a multiple New York Times bestseller. I've sold over a million books. Change lives. This is my latest book. It's super powerful. You get it for free. Deansfreebook.com and lastly, if you're@Dean Graziosi.com if not, go visit it. Not only we get the lead sheet, we still have, I do a once a year event down here in Phoenix, Arizona. It's called the Edge. Matt presents there every year. And not only Matt, but about 10 of our top students come and share these types of strategies that they're using out on the road changing their lives right now. They're once like you thinking about it. Now they're doing it from all different occupations from stay at home moms to Disney execs that quit. It sells out every year because we put it in the same size room, only 275 people. We're literally full. We always have a couple people who cancel last minute so if you'd like to get that event@dingaziosi.com I'll put a link below where you can secure a ticket before they're gone. This is probably the last time you'll ever hear me talk about the edge because literally there's only a couple tickets left and we're guessing some people won't show up. I guess the airlines do the same thing too right when they're overbooked. Hopefully we won't be overbooked. So if you have any desire to get to the edge, click and reserve your tickets. If not, grab this lead sheet and get out there and make money in today's real estate market. That was a long one but powerful. Can't wait to talk to you next week. Take care.