Well, hello there! And welcome to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner, The Private Money Authority. And also the host of the show. And if you’re brand new to the show or never tuned in before, here we talk about all things, real estate investing. We talk about single family houses. We talk about commercial deals, lands, self storage, multifamily, you name it. But the majority of the time we do talk about single family houses and how to never miss out on a deal for not having funding. You see, I became known as The Private Money Authority back in 2009 because when my wife Carol Joy and I started investing in single family houses here in Eastern North Carolina, back in 2003, the first six years, we relied on local banks and mortgage companies.
And then I had a rude awakening in January of 2009. And that’s when I got cut off from the local banks with no notice like the rest of the world did when we had the global financial crisis going on. So I knew I had to find a better way and a more efficient way to get my deals funded. So that’s when I learned about private money. I was able to raise over $2 million in private funding from the time I started attracting the private money. So we know in the real world out there, even though there are many creative ways to buy houses and properties, at the end of the day, most of the deals are done and concluded by having all the cash ready to go.
So on today’s episode, I want to share with you four ways to get more offers accepted. Four ways. To get more offers accepted. But before I do, I have a free offer for you and you can’t be free. You see, just recently I launched my new membership site, which is called The Private Money Academy, and this is a monthly month to month membership. And we now have over 100 members that are showing up twice a month to have zoom coaching with yours truly, myself. And I’m going to give you in just a second, a way for you to have access, to enjoy the membership for a free four week trial, just to give it a trial run and see how you like it. The reason you want to take advantage of this is, first of all, I just mentioned. We have at least two live zoom conference calls a month where I’m coaching all the Academy members revealing my secrets to how we actually run this business in less than 10 hours per week. Netting over seven figures per year.
On each of the zoom conference calls for the Academy members. I have one of the members in what we call the Hot Seat Section. And in the Hot Seat Session, what we do is analyze their business, find out where they are, what their struggles and challenges are and how to overcome those. And then we put a plan together for the members to take their business to the next level. We also have a private closed Facebook group for all The Private Money Academy members to be a member of. And then I also have four different areas of training in the membership site, video training that we update every month. So if you would like to check it out absolutely for free, then after this show, get right on over to http://www.JayConner.com/Trial That’s http://JayConner.com/Trial Come on in to the membership and come join the fun and come learn a lot about real estate investing.
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So let’s go ahead and jump into today’s show, which I’ve titled, Four Ways To Get More Offers Accepted. But before I go over those four ways, I want to, first of all, give you two underpinning principles that always helps you get more offers accepted regardless of the structure or the way that you have done so. Or that you’re going to structure a particular deal.
First of all, the way I do this business and the way I’ve done this business since day one is having a mindset of always creating win-win scenarios. It’s gotta be a win for everybody. And the way for you to create win-win scenarios is for you to have a servant’s heart. You see, if you have the mindset of I’m going to just come in there, you know, whether you’re looking to do a wholesale deal or you’re looking to, you know, make an all, you know, all cash offer and you’re just going to offer, offer, offer. You know, sometimes, it’s the price is not the, is not the main objective or the main motivating factor that seller has. You know, my students hear me talk all the time about when we are doing deals. There’s so many different people that win. We want to create a scenario to where the seller is going to win and they win by us solving their problem. We wouldn’t be in this business unless we had the opportunity to actually solve problems.
So we want a win for the seller. We also, if you’re going to use private money, we want for the private money lender to win by paying them a high rate of return safely and securely. When we go to sell that home, particularly if we sell that home on rent to own, then we’re creating a win scenario for that buyer because the buyer didn’t have any other way to buy a home until we came along and we have a program to where they can actually have a pathway on to home ownership. The American dream. And then we win as well because we are able to bring these solutions and these different structures together. Now, I just, I want you to really think about this win-win scenario. You see, sellers, whether you are meeting them in person or you are talking with them in person the very first time. The seller knows and can tell what your outlook is.
Are you there in that conversation just to make a deal? Or are you there to really fix their problem? You see, here’s what I’ve discovered. When my focus is on the other person and I’m really tuning into what they need and what their problem is that they’re wanting to have taken care of. And I’m really focusing on them. I don’t have to worry about me because you know, it’s like Zig Ziglar said, if you take care of enough, other people, helping them get what they want, you don’t have to worry about getting what you want in the overall scheme of things. You know, over the years we have purchased and invested in a lot of homes that were in foreclosure and I’m not talking bank and properties in this conversation. I’m talking about helping people that are in foreclosure, but their house or home has not yet gone to sale.
You see, here’s another example of creating Win-Win. When we have someone respond to our marketing and someone has received one of my letters, that’s in foreclosure. And they respond to us. One of the very first things that we ask is, do you want to keep your property? Do you want to keep your house? And if the answer is yes, then we’ve got us a checklist of 10 different ways that they can keep their house. And if any of those ways work, there’s nothing in it for us directly out of that deal. Of course, one of the first ways we talk about is have you talked with your mortgage lender about a deferment program to where payments that are in arrears can be put on the end of the note, and then you just start making payments currently right now.
So we go over these different ways. Unfortunately, most of the time they cause a financial distress and other reasons. The person is not able to bring their payments current or start even making payments on a timely basis. But at least they know we have these ways to offer. And if we can help them get what they want and that is keeping their home, then we do it. So that’s my first principle I want to share with you. Whenever you are beginning conversation with a seller, take on the framework and the hat of making sure that it’s going to be a win for them first. And then you’re not going to have to worry about yourself.
The second principle that I want to share with you before we get into the different ways of structuring these deals is I want you to right up front, tell the people, tell the seller what to expect in the course of you helping them out and possibly purchasing their house. For example, just this morning at 8:00AM I got a call last night from a individual that knew what we do here in the area of investing in single family houses. And they called me up and left a message last night. So I called them back at eight o’clock this morning, and we began the conversation. And here’s one of the first questions that I ask after we build a little bit of rapport. I ask the seller, I’ll say, well, tell me what your situation is. Tell me what your situation is, or just tell me about the situation.
Now, let me tell you what is so critical about you understanding and using that scripting of saying to the seller. Well, tell me about the situation. You see, when you say to someone, tell me about the situation, they could first start talking about the property and the condition of the property. The situation that the property is in. Or they could start telling you about the situation that they are personally in.
You see, when a seller contacts us and it’s an off market property, meaning it’s not listed in the multiple listing service. Then they have got a problem. Either the property has got a problem or they personally, or their family has a problem, or both. The property itself could be in distress. The people themselves could be in financial or personal distress, or both. The reason, one of the first questions I ask after building some rapport with the person. My question to them is, tell me about the situation. Tell me the situation. If they talk about the property, then I know that is one of their top motivating factors. And that is the property. They’re wanting relief of that property in some kind of way. Maybe they’re having carrying cost. Of course, they’re having carrying cost. If they still own it. Perhaps they need debt relief. Maybe the monthly financial burden of mortgage payments are just weighing them down. And you know, they just can’t stand it anymore.
I was visiting with a seller about a month ago, and that’s what it was. She had already moved into another home and still had the mortgage monthly payment, financial burden of the existing home. So when I said to her, well, tell me about the situation. First thing she started talking about were the monthly payments. So again, that’s one of the first questions you want to ask because when they answer that question, tell me about the situation. Then that’s going to tell you exactly what you need to hone in on as far as what the focus on, on solving their problem. So when I say tell them what to expect. This morning, as I was saying at 8:00 AM, when I was talking to this particular seller and we built a little rapport and you know, one of the first things they want to know is, well, how does your process work?
So after I had asked the question, tell me the situation. Well, let me tell you what her answer to the situation was. This is a house that’s located in Mill Creek, North Carolina. The situation when I asked that question, tell me about the situation. The answer was, well, there are six of us heirs to this house. It sits on the water. It’s got a nice water view, but there’s still some damage from hurricane Florence, which was a couple of years ago. And this person went on to tell me that they are the executor of this particular property and this person and the other five heirs had decided that they just want to liquidate the property and not put any more money in it. They don’t want to carry any more insurance on it. They didn’t want to pay any more taxes. And they told me without me even asking anything else beyond, tell me about the situation they said, we just want to get the mortgage paid off and not have the burden of this property anymore.
As a matter of fact, this person was actually responding to one of my probate letters that I had mailed out months ago, that my team had mailed out months ago. So I said, well, let me tell you how the process works. And so here’s how the process works. I said, first of all, I’m going to introduce to you. As soon as we finish this call, I’m going to do a group text introduction to Kim. Kim is our acquisitionist. And she’s been with us now for about 14 years. And Kim, what she does is she gets all the initial information on the property that you have. And then I ask, is it okay for me to send a group text to Kim and to you and get you two connected? So we can go in and get some initial information about the property. And the executor says, sure, that’d be fine.
I said, so after I introduce you all, Kim is going to call you, get some initial information about the property, and then we’ll do our research. We’ll find out what the after repaired value is on the property from our realtor. And then at that point, we will decide if it makes sense for us to schedule an appointment for my team to come meet you and whoever of your designee at the property and we’ll walk around and we will estimate repairs. And then from the time we estimate repairs, we’ll go from there and see if we can put together, listen closely. Put together a win-win scenario for everybody.
Now, again, that’s telling people and telling sellers what to expect. Now, there’s another very, very important part to telling people what to expect, because you see when you’re first having this very first conversation with a potential seller, there’s this skepticism that’s automatically built in. They don’t know what to expect. They don’t know how the process works. They don’t know if this is going to work out. So I want to tell you right here, and right now, how to immediately defuse any kind of stress or pressure that’s in the midst of this conversation, because I can tell you there’s already some type of pressure or distress from the seller standpoint, or we wouldn’t be having this conversation in the first place.
So here’s how you defuse the pressure. Take it off yourself if you’re brand new. And what I’m getting ready to say to you will immediately give comfort and peace and destress your seller if they are feeling stress. And here’s exactly what you say. You say, you know, I just want to let you know up front as part of our process and we’ve done many of these deals. You know, sometimes it works out for us to buy the property or in some way help you sell it. And sometimes it doesn’t work out for us to buy the property. And I just want you to know in either case that’s okay. Even if it doesn’t work out for us to buy the property or to negotiate or, you know, put a deal together. I don’t want to use the word negotiation with the seller because I’d already sets up like an inherent feeling of conflict. I want them to be at comfort and at peace. So I was like, even though, even if we can’t work out something together at the very least, I may be able to refer you to someone that can help you out of the situation.
You see that? I keep looping back to the word situation. So you see that’s part of explaining the process. Is telling them right up front, it’s okay if It doesn’t work out for us to actually work on this directly, but because my main cause and purpose and objective here is to help you with your situation. Well it works out for me to get something out of the deal or not is okay with me. My main purpose is in helping you out. Now let me give you another sub point about how this, how helping people out works out. And that is, you, God gave us two ears and one mouth, right? And the only way, not the only way, but the best way this is going to work out is if you become a listener like nobody else. I mean, when you increase your skill and talent of really listening, for example, back to the question, tell me about your situation. Now, when you say, tell me, when you asked him about your situation, you got to put on your listening cap and the taking copious notes, because the more they tell you about the situation, I can tell you what they are talking about. It’s what’s most important to them.
Now, as I mentioned a couple of minutes ago, a lot of the times, it’s not always about the price. Let me give you an example. Not too long ago, I was talking with a seller about, I was actually talking with the daughter of the mother that lived in the house. This was in a small home, over in Newport. And I was talking with the daughter and I said to the daughter, tell me about the situation. And here’s what the answer was to that question. You know, the first answer was there were six heirs on this home in Mill Creek. They didn’t want to do any more to the house. It needed repairs. The six heirs don’t want to mess with it.
When I’m talking to the daughter on this home, over in Newport, here’s the answer to the question and I’ve got my ears wide open. I said, tell me about the situation. The daughter says, well, my mother has been living in this home for years. In fact, it’s been living in this home for decades and she’s come to a point in her life to where she needs to move out because she needs to move to an assisted living area or an assisted living home. And she doesn’t know where she wants to go, but we know we need to sell the house in order to provide income and revenue to pay for the assisted living. I said, after she answered the question, tell me about the, she didn’t say anything about the property. It wasn’t the property. It wasn’t the upkeep. The problem to tell me about the situation was the mother needed to move on and did not know where they were going to go. And they needed money to start making that decision.
Since I had my listening ears on. Here was the way I structured the deal. I said, I’ll tell you what I’ll do. I’ll pay you all cash. Using private money. I didn’t tell them private money cause they wouldn’t know what I’m talking about. I said, I’ll pay you all cash for the property and I will let your mother live in her home for a another 90 days, three months, rent free. For you and the family to have plenty of time to find a place in assisted living area. And you can go ahead and get, you know, I’ll give you a partial cash upfront as a down payment before we, or earnest money before we actually close on the deal. So you all can all start. You can go in and start making arrangements on the move.
Guess what I discovered from that offer because I had my listening ears wide open. I learned after we closed, the daughter told me after we closed, she said, Jay, I just want you to know that I had another investor offer me more money than you did, but I want you to know the reason we took your offer was because you understood what my mother needed. My mother needed some cash now to go ahead and start finding the assisted living home to move into. And because you were able to work with us and give us some money up front and then close out a completely 90 days down the road, then we took your offer. Even though it was a lesser amount.
Now, let me tell you how I structured that deal. Okay? So I structured that deal with seller financing. So I told you up front in the beginning of this episode, that I was going to teach you four different ways to get more offers accepted. So this was a combination of seller financing and private money cash. Alright. So this is seller financing.
So number one way, I call it Seller Financing with Principle Only Payments or Seller Financing with Equity Payments. So this strategy can be implemented in many different ways. Seller financing with principle only payments or equity payments. That means the same thing. What that typically means is when the seller is selling a house that’s free and clear of any mortgages, have any notes or liens attached to it. Then I offer to make them payments that will go 100% towards purchase price until I cash it out.
Well, let me tell you what I did in this case. So you say, Jay, how can you give them money up front and you’d be protected? What if I take the money and run? Well, they can’t take the money and run. What we did is we went ahead and closed on the property at the agreed upon price. But all I did was a 90 day note. You see, they needed cash. In this case, $10,000. They needed cash $10,000 down to go ahead and start finding the assisted living area, moving and et cetera. So I had my real estate attorney draw up a note and a mortgage. And so I gave $10,000 down at that point of the down payment at my real estate attorneys closing office. Title was went ahead and was transferred to me.
So I own the house. I own the house. You never give a seller any money. Of course, all the money goes through the trust account, right? They get the money at closing. Alright. So now we have a note in place. And so I’m going to pay it off in 90 days. But as part of the agreement in this negotiation process, I’m not going to pay it off until the mother has moved out of a house. So you see, that’s how I structured that deal, making it a win-win scenario and giving the mother and the daughter exactly what was needed. So that’s number one, seller financing with equity payments, principle only payments, or in that particular case, a down payment that 100% of that went to purchase price. And then the balance was paid in 90 days. Now, where did that money come from? Private money, of course. But it was a combination of seller financing, a 90 day note, transfer the title and ownership at the time of closing and then paying it off with private money at the end of 90 days.
The second way that I want to teach you today on structuring deals is what’s called, Seller Financing with Interest Only Payments. Seller Financing with Interest Only Payments. This is also called Seller Financing by Your Seller Being a Private Lender. This is making the seller of the property, your private lender. Well, how in the world does that work? This strategy works when you’re dealing in higher end, higher priced properties, where the seller is very, very intent on getting their price. Okay. So I have a friend who recently negotiated a deal and the price of the property retail was $800,000. Well, the seller wanted full retail.
Well, they knew they could negotiate this deal, but they could only, they didn’t have private money lined up for $800,000 price. So they negotiated with the seller to sell to them with just interest only payments for 12 months. And for the, during that 12 months, that gives them. So it’s, you know, interest only payments can typically be less than principle and interest payments. By doing interest only payments that gave the real estate investor, my friend, plenty of time to locate a rent to own buyer on this very high end property over on the beach, it’s a resort property. And they can negotiate the deal. So that’s two ways to use seller financing, seller financing with principal only payments, seller financing with interest only payments.
There’s actually another seller financing strategy. I’ll go and share with you right now. I’m not going to have it displayed at right now, but that is, Seller Financing with NO Payments Until Cash Out. Seller Financing with NO Payments Until Cash Out. So when you have a seller, particularly on a free and clear property and they don’t need the cash flow, then you can, Oh, my podcast producer is brilliant. He’s already got it up there. Seller financing with ZERO payments. So you can negotiate the deal to where you buy it with nothing down and no payments until you find a buyer. And when you find the buyer, you use the buyer’s money to then cash out your seller, and then you retain of course the profit over and beyond the price that you all had negotiated.
So that’s two ways. Actually three ways. So now what is the next way? And y’all have heard me talk about this a lot. And that is Buying with a Subject to the Existing Note. Buying Subject to the Existing Note. So simply that is when someone will, they’re wanting retail value or they’re giving it to you at a discount. They’re willing to sell you their house, leaving the mortgage in their name, and they’re going to sell it to you, transfer the deed and you are agreeing to make the payments until you find a cash out buyer. Who’s willing to do that? A motivated seller who is interested solely in debt relief. You see the person I just told you about a few moments ago that I met about a month ago. They, that was their main motivation. When I said, tell me about the situation. And the situation was they needed a debt relief. So this strategy even works when a seller wants full retail price, where you can buy a house at full retail price, subject to the existing note, if and only if, the underlying monthly mortgage payments are less than what you can bring in per month with, you know, a rent to own monthly payment. So subject to.
And then the fourth way, of course, is Paying Cash with PRIVATE MONEY. Using Private Money. And I can tell you that this in the real world out there is the way for you to ensure, to never missing out on a deal because you didn’t have the funding. Most sellers, even though we’re talking about these different creative ways are going to require all the money. Now, if you’re wondering about how in the world, you can get private money, regardless of your credit score or verification of income, whether you’re a seasoned real estate investor or you’re brand new, that’s another reason for you to get involved and take advantage of the four free weeks that I’ve offered you. Of The Private Money Academy. So if you want private money for your deals, then be sure and get in the four week trial at http://www.JayConner.com/Trial.
Well, those are the four ways before I let you go on today’s show. I want to give you a strong negotiating tip and strategy on how to negotiate when it really is all about price with the seller. And that is I have got a formula. And for all of you that are in the Private Money Academy that I just offered with the trial. I have a formula that I share with all the Academy members that shows a formula to the seller as to how on average, they get only about 78% of their asking price when that is listed in the multiple listing service. So if you’ve got a seller that is just, you know, dead set on the price, then use this formula and showing them.
Here’s what I do. First of all. Well, here’s the price they want. If you put your house, if the seller puts their house in the multiple listing service at that price, first of all, national average, 6% is gonna come off of that. We’re already down to 94% of the asking price because 6% is going to go to the realtor community and commissions. Well doing business with a real estate investor, there are no realtor commissions. In addition to that, when you sell it in the multiple listing service, there’s always going to be, I say, always 99% of the time, there’s going to be a home inspection by the buyers home inspection company. And of course, what is the home inspectors job? The home inspectors job is to, is to point out every nuance of inefficiencies. And of course, anything that is not working that is intended. Well, I can guarantee you after the home, after you’re under contract to sell the house, when the seller’s under contract to sell the house and the home inspector comes along, do you think there’s going to be now more negotiation asked by the buyer of a house? Absolutely!
I rehab houses all the time. Carol Joy and I have rehabbed over 400 of them here in Eastern North Carolina. And after the home inspection, the buyer always wants more to come off of the price. In addition to that, how long is it going to take to sell the property with carrying costs? So while the property is on the market, then there’s carrying costs still going on. Mortgage payments, taxes, insurance, unexpected maintenance. In fact, I was talking to another seller this morning that it is his mother-in-law, his 91 year old mother-in-law that is wanting to sell the property. When I asked the question, what is the situation? The answer was the 91 year old mother-in-law and the family don’t want to spend money anymore to upkeep the property. And it’s just too much. And so just two weeks ago, and this may have been the cockroach that showed up for the most recent motivating factor of the seller.
When I’m talking to the son in law, he says to me, the hot water heater just went out two weeks ago. And now we and my siblings have had to replace the hot water heater. We’re done. We’re just tired of upkeeping this property, keeping the upkeep on this property and we’re ready for it to go. So again, the formula that I use on showing a seller as to what the real cost of selling a house, when in the multiple listing service versus selling to a real estate investor, many times can make the difference on whether you buy the house or not.
Well, there you have it. Not only the four ways. I think I did maybe five ways. That you can get more offers accepted. Remember the underlying principles that I went over with you as well. And that is, always creating win-win scenarios, telling people what to expect and making sure that you always have their interest first at heart. Because again, when you take care of them, you don’t have to worry about yourself. Take me up on my offer. Four weeks free trial in the membership. Jay Conner’s Private Money Academy at http://www.JayConner.com/Trial.
Thank you so much for joining in on the episode. If you found it valuable, be sure to subscribe, rate, and review, and I look forward to seeing you on the next episode. I’m Jay Conner, The Private Money Authority. Wishing you all the best. And here’s to taking your real estate investing business to the next level. We’ll see you on the next show.