I just binge watched the "Undercover Billionaire" season 1. Glenn Stearns is a multi-millionaire who goes undercover to prove that anyone can make it in America. He starts out with $100, an old pickup truck and is dropped in a US city that has seen better days. He is not allowed to tell who he is or use any of his contacts to help. In the course of 90 days, he has to create a business that will be valued at $1,000,000.
He creates relationships, sleeps in his truck many nights, meets a lot of great people who join him in his effort to start a barbeque restaurant. He ends up picking up scrap in a junk yard that he sells for cash. He talks a closing car dealership into letting him sell the last cars on the lot that aren't moving. He ends up flipping a house, creating a barbeque brand and opening the restaurant along with online sales for his sauces and other swag. Does he make a million dollar valuation? You'll have to binge watch it and find out. 🤣
One of the things he said during the show is "No is just the beginning of the conversation." He had a lot of setbacks, heartbreaks and frustration, but when it was all said and done, he succeeded. In the real estate business, No is a common response to offers, home inspection reports and a host of other parts of the business. It's at that point that many give up assuming the opportunity has failed. But has it? Is it over? Maybe. Maybe not.
When I started in real estate, I was an investor. I bought a lot of properties over the first six years, and I bought most with no money. My total investment for the first six properties was $7800 I put down for one. "No" was not an option. I heard it a lot, but it didn't stop me. One of the early deals I had was met with a solid, "No." The second offer was also met with No, as was the third offer. At that point, I quit making offers on that property and bought elsewhere.
Six months later, the seller called me directly and asked if I was still interested in the property. I told him I was, but I had to buy it based on my conditions. When I explained what I was doing, he said, "I can do that." I paid full price, but he financed it at a lower interest rate for five years. Ironically, at the end of five years, he called to ask if I would like to go another five years. He was using the money to send in granddaughter to private school, and the money trickling in was perfect and it spread out his captial gains tax liability throughout the years. Why didn't he take the original offer? My agent, who was wonderful, but she didn't know how to present it. That's why I entered the real estate business. She was an excellent agent, but she had never worked with someone like me. And, she simply didn't know how to deal with a creative investor. I rarely use my own money. That was foreign to her.
A couple months ago, a listing client asked me how I got into real estate. When I told her my story, she said, "Oh, people can't buy houses with no money anymore." I just laughed. I've bought five houses in the past four years and I have only spent $420. Three of those purchases were after my conversation with her. There are people just like me all over the country. I didn't get to where I did early in my pre-Realtor career by accepting "No" as a response. That doesn't mean I was pushy, or that I would take advantage of people. No, every deal I have ever done has truly been a "win-win" deal.
The most recent purchase of two houses was from a client of mine who wanted to sell his rentals. I asked him why he was selling. When he shared, I realized he was just tired of dealing with them. I've managed them for the better part of seven years. They're profitable. He has no management duties, but he has small children and other ventures he wants to pursue. I made an offer based upon my price and conditions and he and his wife accepted.
If he had said no, I would have continued managing the properties until I found a buyer at a higher price than what I'm paying. I would have still won. He would have still won. His whole goal was to stop thinking about them and think about more important things. When you run up against a wall of "No", look for a way to turn that No into a yes.
I just had an agent present an offer on a property I have listed. It was an insulting offer that my client immediately rejected and refused to counter. The buyer's agent said her client would come up to full price. I told her, "She should have made that offer in the beginning." My client was so irritated that he took the property off the market. That agent accepted the no as final.
Late last week, my client reached out to me and said he was thinking it over. This is a unique situation because the buyer's dad lives right next door. So, she's not prone to go buy another property right away. The whole reason for buying was to be next to her dad. Hopefully, before next week is over, it will go under contract with a few changes in her offer. No, was just the beginning of the conversation, but her agent gave up to quickly. Don't look at No as final. Sometimes, it might be best, but other times, it might just be the beginning of the conversation.
**Update: The buyer came back with a much better offer and my client is going to accept it. No was just the beginning of the conversation.