Patrick's Blog

Real Estate Investing : Getting an Upfront Contract

Patrick Riddle (MustKnowInvesting) — Wed, 30 Apr 2008 19:15:52 -0500

An upfront contract is an agreement that is structured with someone BEFORE taking someone through your sales process. It is a technique developed by David Sandler and is extremely powerful. Use an upfront contract and you'll be playing by your rules, not be theirs!

The following script will show you how to effectively set up an upfront contract:

Me: Thank you so much for meeting with me today. How much time did you see us spending together today?

Investor: Well, I don't know. How long do these meetings usually last?

Me: We can be done and have all your questions answered within an hour. So, it's 3:15 now. Let's imagine that it's 4:15, your walking out of here thinking that it was a great meeting and really worth your time. What would we have to cover for that to happen?

Investor: Well, I guess you would go over A, B, and C.

Me: Naturally, you've got questions, A, B, and C. A lot of people have similar questions. I'll make sure to go over all of that. Obviously, I've got some questions too, D, E, and F. Are you OK if we go over those questions today?

Investor: Sure.

Me: Typically, there are several different outcomes that could come out of our conversation. If at any point, I figure out that we're not a fit, do you mind if I go ahead and tell you?

Investor: No, not at all.

Me: Good, I appreciate that. Now, if you figure out that we are not a fit, would you tell me?

Investor: Sure.

Me: Thank you. I appreciate that. A lot of people aren't comfortable saying "No" and my biggest fear is when people say things like "Call me next week" or "Let me think it over" when they really just mean "I'm not interested."

On the other hand, we may find that we are a fit and that it makes sense to work together. Now, we're not even close to that yet but if we were to get there, what would you see us doing next?

Investor: I'm not sure.

Me: Well, the next step would be to write us a check to get started investing with us. Anything less than that, I'll just take as a "No." Are you OK with that?

Investor: That sounds good.

Me: Great. Out of the things you mentioned earlier A, B, and C, which one would you like to go over first?

That's it. An upfront contract has been established. I showed appreciation for the appointment in the first place, quantified the time we would spend together (don't you hate appointments that drag on and on and on to no apparent end), discussed what questions would be covered during the appointment, and established an agreement so that by the end, I get a clear "Yes" or "No" to my offer. "Let me think it overs" will drain the life out of you. Handle that objection before it comes up!

And by the way, DON'T try to reinvent the script! Just memorize exactly what it says and you will improve your closing ratio by a million percent.

Patrick Riddle

MustKnowInvesting

Real Estate Investing : Think & Grow Rich

Patrick Riddle (MustKnowInvesting) — Tue, 29 Apr 2008 15:29:40 -0500

More people attribute their financial success to Napoleon Hill's classic, Think & Grow Rich, than any other book in the history of the world. That should be enough said to get the point across to any serious student. After interviewing over 500 of the wealthiest men of his time and more than 20 years later, Hill crystallized the science of personal achievement.

I just started reading the book again for probably the 5th or 6th time, and it still amazes me. I have also listened to the abridged and unabridged CDs countless times. But just reading or listening to the book is not enough. You must follow his advice and take the practical steps outlined to achieve the results. As I was writing out my definite chief aim again, I decided I'd share his "Six Ways to Turn Desires into Gold" as quoted directly from the book:

"FIRST: fix in your mind the exact amount of money you desire. It is not sufficient merely to say "I want plenty of money." Be definite as to the amount. (There is a psychological reason for definiteness which will be described in a subsequent chapter.)

SECOND: determine exactly what you intend to give in return for the money you desire. (There is no such reality as "something for nothing.")

THIRD: establish a definite date when you intend to possess the money you desire.

FOURTH: create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action.

FIFTH: write out a clear, concise statement of the amount of money you intend to acquire, name the time limit for its acquisition, state what you intend to give in return for the money, and describe clearly the plan through which you intend to accumulate it.

SIXTH: read your written statement aloud, twice daily, once just before retiring at night, and once after arising in the morning. As you read--see and feel and believe yourself already in possession of the money."

Several paragraphs later he says, "...you can never have riches in great quantities unless you can work yourself into a white heat of desire for money, and actually believe you will possess it.

Real estate investor or not, this is extremely powerful advice. In life, you decide who to listen to. Anyone that has studied hundreds of successful men and women and was commissioned by one of the wealthiest men in America to do so has my attention. How about yours?

Patrick Riddle

MustKnowInvesting

Real Estate Investing : It Will Make or Break You

Patrick Riddle (MustKnowInvesting) — Wed, 23 Apr 2008 17:27:56 -0500

Earlier today, I was riding around with a friend looking at some houses. He is a fellow entrepreneur and was telling me about one of his businesses. He has created an incredible product that is superior to its competition and can be sold at a competitive price.

He has 10 or 15 clients now but hasn't sold anything lately. So I asked him, "Why aren't you making more money off of it?" After going back and forth for several minutes, we came to the answer...MARKETING!

An excellent marketer can sell out an inferior product. I was thinking, "If he has a superior product that can be priced competitively, they should be selling like hot cakes. What's the hold up?" Well, we figured it out. It's the marketing plan!

If you want to be an active investor, handing out business cards is not a plan. It can be part of a plan. But you're going to need more than that.

There are two sides to marketing for a real estate investor. The buying side and the selling/leasing side. If either side is lacking, your profitability is going to suck. If you don't have any seller leads coming in, you're definitely not making money...you're not losing it either but come on. What are you trying to do here. If you already own properties but aren't able to sell or lease them, you stand the chance to lose a bunch of money.

Here's an example of a balanced marketing plan:

On the buying side, you hand out business cards to everyone you come in contact with, you attend every real estate investors meeting in town, an ad in the "Housing Wanted" section of the newspaper every day, mailers going out to houses going into foreclosure, and a website that is optimized in search engines to bring you seller leads. Any combination will do, but it will take a combination to bring in a good deal flow.

On the selling side, a website where all of your properties are listed for sale, lease, rent to own, bandit signs out in the community driving traffic to your site, a newspaper ad, and as simple as this might sound, a sign in the front yard.

There are many ways to market on the buying and selling side for investors. No one way is right. After reading book after book in the marketing field, I know the secret formula. Have a multitude of lead generating strategies and test, test, test. What's bringing in most of your seller leads? What's the price per lead? Which lead source is bringing in the most deals? Where are most of your tenant buyers coming from? You get the idea.

No matter what business you're in, marketing will make or break you. Determine to become an excellent marketer, and you've just established your success no matter what field you enter.

Patrick Riddle

MustKnowInvesting