Time Kills Deals

Time Kills All Deals...We all know this yet somehow, someway, we continue to let it happen inside of our virtual wholesaling businesses. In this video, I breakdown some of the most common ways we allow time to kill deals for us and how we can avoid those pitfalls moving forward. Just remember moving forward, by definition, real estate investing is always on the clock, that clock is called the Close of Escrow. The faster we get to the Close of Escrow, the faster everyone involved gets paid. Don't be the reason everyone doesn't get paid.

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Chapters

• 0:00 Time Sensitivity in Wholesaling Deals
• 8:31 Negotiating Deals With Urgency
• 17:36 Importance of Transaction Coordination in Wholesaling
• 26:01 Preventing Time From Killing Deals

Transcript

Speaker 1: 0:00

What's up, guys? Rj Bates III. Here and today, we're going to be discussing a topic that a lot of wholesalers don't ever want to talk about, which is time kills all deals. We come up with so many excuses as to why we are going to elongate the process, and we are going to find excuses and reasons, some of them for the right reason. Right, we don't want to make a mistake, we don't want to just tie up contracts, we don't want to screw over sellers. We don't want to make a mistake, but, at the end of the day, time kills deals by all definitions. We are always on a clock, and that clock is the close of escrow. Okay, so when you are wholesaling, you have to understand that everything you are doing is time sensitive, and so, throughout this video, what I'm going to be going through is a lot of the excuses that I see from wholesalers as to why they will stop, slow down the process, take time and then try to come back and do their job, and it could be costing you deals. Well, I know for a fact if you're doing any of these excuses that I'm going to give you, it is absolutely killing some deals and it's costing you money in your pocket.

Speaker 1: 1:22

Okay, now, before we get into those excuses, I wanna touch base on something. We are reaching out to motivated sellers. Okay, that's the term that we use when we talk about our sellers that we're helping. They're motivated, right? What are the two most important things that we're looking for? Price and motivation. Okay, so what is motivation? Well, when I looked up, I did a simple Google search the definition of motivated and it's funny what I saw on Wikipedia had a little blurb on the right side of Google here, and it says motivation is an internal state that propels individuals to engage in a goal-directed behavior. It is often understood as a force that explains why people continue or terminate a certain behavior at a particular time At a particular time. Okay, so that's what I want you to remember as we're thinking about this. So these sellers become motivated and so they're going to do something about it, and then we come along and we say we could potentially be a solution for you, but then our urgency, our solution, is not based off of their timeline, and I'm going to show you how. That's where we don't move fast enough, and then, at times, we also try to move too fast. Okay, this goes back to asking good questions, listening and making sure that you are always approaching these conversations with sellers as a solution for their true problem, which should be based around their timeline as well. All right, now let's start with lead generation. Okay Now, I personally have not struggled with this one. All right, I personally have not struggled with this one, but I have now noticed that there are a lot of you out there that will watch one of my videos.

Speaker 1: 3:33

For example, you watched me and Cassie in a Closers Cage match on Friday. We were buying leads from Speed to Lead. You see me get two signed contracts. You see Cassie get two verbals, which has led to sign contracts now and you're like, oh man, right now I gotta sign up for the speed to lead coupon club because it's only available right now. So you go and you sign up and maybe even buy some leads, and then you're like, oh it's, it's Friday night, I'm not gonna call that. It's Saturday. I'm not gonna call the lead on Saturday. I already had plans on Saturday, then Sunday, so I'm not going to call that it's Saturday. I'm not going to call the lead on Saturday. I already had plans on Saturday, then it's Sunday, so I'm going to call on Monday. Well, the problem with that is is that seller could have already found a solution. Time kills deals, okay. So this whole not calling leads I'm also seeing quite a few of you go out and pull lists.

Speaker 1: 4:26

So not just inbound leads, but pull lists based off of motivating factors. We're making an assumption based off of the fact that they're tax delinquent, the property's vacant, pre-foreclosures, inherited, expired, listing something along those lines, that they might be motivated to sell the property, and then we skip, trace it and then we don't call them, we don't reach out to them, we don't ask them do you need to sell the house? And because of that we miss out on those opportunities. Maybe you hold on to the data for a week, a month, some of you years, before you then try to reach out, you're like but I have 30,000 records. Yeah, those 30,000 records have been touched over and over and over again by other wholesalers, other real estate investors. You've waited too long. The time has passed, the motivation has passed, why? Because, if you go back to the definition of motivated right, it is often understood as a force that explains why people initiate, continue or terminate a certain behavior at a particular time. So time is important when it comes to reaching out to your leads.

Speaker 1: 5:46

Okay, now, once you're on the phone with a seller I've seen this as well we want to make sure we gather all of the information, okay. So a lot of you are like hey, can you send me pictures? Can you give me a full rundown of every last little detail that's going to have to take place with the rehab, instead of making some assumptions based off of the conversation that you're having? Right, listen, hear what the seller is telling you about the condition. You don't have to get every last detail. This is what we have a walkthrough and inspection for. Walk through, an inspection for.

Speaker 1: 6:27

So, slowing yourself down and say, hey, can you send me pictures before I make you an offer, before I send you a contract? Okay, this can also kill the deal, because if you are waiting on a 60-year-old seller to figure out how to use their phone to take pictures, I'm going to call that same seller. I'm just going to ask really good questions. I'm going to listen to them, get them to open up about what's going on with the condition of that property. I'm going to come to an agreement on price with them, I'm going to send them a contract and then boom, it's game over for you. You no longer have an opportunity. I now control the destiny of that deal. We're going to come out. We're going to do so.

Speaker 1: 7:09

Don't kill the deal for yourself by making an objection to making an offer. Hey, can you send me pictures? Can we come out and walk the property prior to making an offer? This is an old way of doing business and, quite frankly, I don't like it. I don't think it's the way that you should be acquiring deals anymore.

Speaker 1: 7:30

All right, the next one not properly following up with sellers If they say, hey, call me back. Or another one that's one of my favorites is you've sent them a contract and they don't sign. Okay, now let's touch base on the first one. You're on the phone with a seller and they say, hey, I'm at my job right now. I can't talk about this, but can you call me back? Taking the extra step to say when is a good time for me to call you back, when would be a good time for us to have this conversation, because it's vitally important for me or to me to help solve your problem, for me or to me to help solve your problem and then tracking that and actually placing the follow-up call. I would say the vast majority of you might ask the question when's a good time for me to follow up with you and never place the follow-up call?

Speaker 1: 8:31

Now let's talk about the ones where you come to a verbal agreement on price, timeline, everything like that, and you send the contract and then it's like, hey, I want my realtor to look at this, or I want my sibling or my spouse or my attorney to review this contract, again, putting a sense of urgency on this and understanding the timeline that the seller needs, but also what we need. Okay, cause what's the name of this video? Time kills all deals, baby. So if you're just going to send out a contract and you're not going to have an expiration date, that is, hey, if you don't sign this by the next 48 hours, this offer is null and void. They can shop that around or they can just sit on it and again, this is not good for you because you don't really understand their timeline, their need, and the seller doesn't understand your timeline and your need.

Speaker 1: 9:33

So the line that I always use in this case is if they say, hey, I need my attorney to review this realtor, whoever it is, when are you going to be able to review that with them? How long do you need? And the reason why I need that answer, mr and Mrs Seller, is is because I've allocated these funds for this deal and I need to know when you're going to give me an answer, because I don't want to be able to. I don't want you to sign a contract and me not be able to perform because I'm going to continue to call more and more sellers. Okay, setting the expectation for them that, hey, this is real, we're going to need an answer. I can't just sign contracts with every single person because the reality is we only have a certain amount of bandwidth.

Speaker 1: 10:23

Setting that expectation with them, letting them know how serious it is, finding out what is the deadline that they're giving you and working around that Don't let contracts just sit out there in the ether waiting to be signed or ignored, all right. The next one is if the seller says they need you to close in five days. Now, if you have the ability to close it five days, then absolutely move forward with that. But if your intention is to wholesale the deal or even take it down but you know for a fact that you can't accomplish that then you need to set realistic expectations where it's like hey, that's not how our process works, so let them know how long you need to be able to perform. So let them know how long you need to be able to perform. So, for example, I always say you know, we put 30 days on our contract. We can work around your timeline. If you need to be a little bit quicker than that, we might be able to make that work. If you need longer, we can absolutely make that work.

Speaker 1: 11:28

This isn't forcing it into a specific time frame, it's leaving it open because it's a point of negotiation. Right, we want to be able to close the deal on their timeline, but we also need to make sure that we're taking care of ourselves in order to take care of them. This is like the airplane mask theory, right, oxygen mask fall. Make sure you put your oxygen mask on first before you put it on the child next to you, because if you don't put yours on and you pass out, guess what? There's no one that can put that mask on for the kid sitting next to you. So you just killed both of you. Same thing here. If you don't at least set the expectation for the seller on what you need on timeline, that can kill the deal and set poor expectations and look even worse in the eyes of the seller than if you had not set that expectation. So make sure you're always setting that expectation, all right.

Speaker 1: 12:28

This is another one that just blows my mind because it's something that we have never really dealt with or, I guess, thought about being a problem, but I've seen it a lot with the increase of joint venture deals that we have done over the past. I would say 24 to 36 months, and that is, once you get the deal under contract, taking too long to open title and start marketing the deal Okay. So, for example, one of the deal killers here and just time sucks is getting recon done on the property right, getting pictures back from the seller and then waiting on that and waiting on you to think if you're going to be able to disvote or not opening up title. And the problem with that is is, if there's any title issues or if title moves slower, you not being able to extend the contract. Our contract has it. Where title doesn't come back free and clear, then we have the ability to extend the contract five days, but we also have to have some sort of proof that within a reasonable amount of time we open up title. Right, we can't wait until the day before close of escrow to open up title and then exercise our right to extend the contract because title's not back free and clear. Well, that was on us.

Speaker 1: 14:05

We just set on a signed contract, okay, and then, as far as recon goes right, a lot of you ask questions like hey, and then, as far as recon goes right, a lot of you ask questions like, hey, how do you get pictures done? How do you do walkthroughs on if you're virtually wholesaling something where you don't have boots on the ground? Well, first and foremost, we always ask the sellers for pictures first. Okay, then we will give first right of refusal to our known buyers in the area. Like, hey, dude, you bought a property from us before in Jacksonville Florida. Do you want to go out? Do you want to take a look at this? And while you're out there, take pictures for us. And if you don't buy it, hey, you had the first right of refusal. But at least for us giving you that, give us those pictures and some feedback so we can market it to our other buyers.

Speaker 1: 14:50

Okay, and then, last and my least favorite way of doing recon is by hiring a handyman to go out and take pictures. Okay, so you hire a handyman. They're going to be a lot cheaper than a photographer. Now, there's companies out there like Velocity REO, which is BPO photoflowcom. There's a couple of other ones that will go out and they'll take, like inspection level pictures for you. But a more expeditious way of doing this is finding the handyman. That needs some work. Hey, 50 bucks, go out, take some pictures for us, and then also, the handyman will be better at figuring out some of the items that need to be repaired than just a photographer. Okay, so those are ways that we get around that. But don't let recon just go on and on and on for, you know, two weeks, because that will absolutely kill a deal for you.

Speaker 1: 15:48

Okay, the next one is not coordinating properly between buyer and seller and lagging on getting the buyer proper information. I see this one all the time in dispositions. Right, the buyer comes back to us and says, hey, I need to know. You know how can I get the rent rolls? Can I get an idea of when the last time the roof was replaced or the HVAC was replaced? I got concerns about that and the dispo person not being able to get that information from the seller and just lagging behind. And again, what's happening? Time is passing and we think we have a buyer on the hook. Well, guess what that buyer's doing? That buyer's looking at other wholesalers' emails. They're going and walking other wholesalers' properties and, more than likely, that end buyer is going to prefer to do business with the wholesaler that comes prepared with that information and is fully ready to assign them the contract, because they came equipped with everything that that end buyer needs to know in order to make the correct decision on buying a property or not. So making sure that you are prepared to answer all of your end buyers' questions concerns getting them that information and not letting that time lapse go, because this is one that really can kill the dispo side of things. Where you've got a buyer hot to trot, they go out, they want the property and they're like yeah, I think I'm good at $100,000. But I do need to know these two questions and then it takes you 48 hours to come back with that information. There's a solid chance they went through those funds and bought another property. Okay, so don't let that be one.

Speaker 1: 17:36

Now, one of the biggest things that will kill deals is not staying on top of the title company or the closing attorneys. If you think that that title company is going to just handle your contract with the utmost care and be concerned about your closing date and they're going to do their job, you are wrong. This is why the position of transaction coordinator exists, because it is required to have someone staying on top of that, making sure that the title commitment comes back, that anything that shows up on that title commitment it needs to be cleared prior to closing. Liens, judgments, mortgages, payoffs, all these types of things, affidavit of airships, things that come up in that title commitment are getting handled and the communication between the title company to the seller and the title company to our buyer is happening. Because there are so many times like, for example, we just had a deal the other day where we assigned it in Georgia and the title company is requiring that a survey be done on one of the properties prior to closing.

Speaker 1: 18:59

Now you would assume that the title company would have told the seller that, hey, in order for you to sell this property, a survey needs to be done, but they did not. And due to a lack of communication between RTC and the buyer and the seller and the title company. No one told everybody. The only people that were informed was the title company. And the title company told us, as the wholesaler, buyer and seller had no idea that a survey was required in order to close. What did this end up? Leading to? Pretty frustrated boss me, a very frustrating conversation between us and the seller. Because now the seller thought they were about to get their money right. Now we have to explain to them that a survey has to get done. And then our buyers frustrated because they had their contractor crews lined up to start on the project, but now they can't close when they thought a close of escrow was and they weren't even aware that a survey was being required. So, staying on top of your title company this is why transaction coordination is so vitally important to a wholesaler success. Don't let the title company be the reason why time kills your deal.

Speaker 1: 20:25

Okay, and then, on the dispo side of things, putting all of your eggs in one basket with one buyer oh, this one is very common, especially when you're new to dispositions. Right, you pick up the phone, you talk to a buyer. Someone tells you like hey, this guy, he's the guy that will buy that deal or the gal that'll buy that deal in that location. So you call them up and they're like yeah, so it's Monday at 2.40. I got some appointments on Tuesday. I might be able to make it out there by Wednesday afternoon. I need to do a walkthrough, okay, and so they decide well, that's the guy right. So I'm going to wait on him to go out and do his walkthrough on Wednesday afternoon. Then he goes out on Wednesday afternoon and you don't hear from him until Thursday afternoon. And then he comes back and says hey, I've got a question and now you've got to go ask the seller. Now you're talking about you're communicating the information from the seller to the buyer. On Friday, the information gets to him and he's like all right, well, let me think about it over the weekend, I'll get to you on Monday. A whole week just passed by and you were waiting on one buyer and then come Monday morning he says hey, I'm going to pass on this one.

Speaker 1: 21:54

It's common you might be laughing and going no way, that doesn't happen. I see it happen all the time. Another one where a buyer can really kill your deal is they sign an assignment and you are not following up and like pushing a sense of urgency on getting the non-refundable earnest money deposited and essentially giving them a free run on hey, I signed and at any point in time I deposited that earnest money, I'm good, but I'm not going to do it until they force me to. This would be one of the things that I see newer wholesalers do. They're afraid to push that sense of urgency on their buyer and say, hey, I need earnest money deposited today. Let me get you those wire instructions. Are you going to be able to send that wire today, really pushing and making sure that that buyer is serious about buying that deal and locking down with at least non-refundable earnest money?

Speaker 1: 23:01

Now, there's so many other ways that time kills deals. We could go on and on, but these are some of the top ways that I've seen wholesalers make mistakes. But the one that is most frustrating for me is not talking to sellers when you have leads being afraid of like, hey, I don't want to make a mistake, coming up with my arv or or not comping it correctly, or I don't know what the rehab would be, so I'm waiting on pictures or the fear-based decision. Right, I talk about fear being false evidence appearing real and sitting there and being like dude. I'm afraid to pick up the phone because I see RJ do it, but I just don't know if I'm ready to have that type of conversation. Okay, simplify it in your mind where you're not trying to be like me, you're not trying to be anybody else that you see close deals on YouTube Okay. Deals on YouTube okay.

Speaker 1: 24:03

You are a human being that is calling someone that is motivated to sell their property and you need to ask enough quality questions to get enough information to then decide if this is a discounted property that an end buyer can make money with. Discounted property that an end buyer can make money with. That is what we do as real estate investors and that is what you do as the virtual wholesaler. So don't let fear come in and cripple you into this paralysis of not taking any action, not at least picking up the phone and talking to these sellers. Because, again, time kills all deals, no matter where it is in the transaction. We're always on a running clock, that little angry clock on the thumbnail I'm laughing at it. That little sucker. He will kill your deals over and over and over again. Why? Because that seller is motivated.

Speaker 1: 25:09

The title company, they're going to move at their own pace and you are going to have to push. You're going to have to ask questions and make sure they're doing their job, and then you're going to have to push that sense of urgency that should be coming from the seller through you to your buyer and being like hey, I need a decision, I need an answer, I need a number. Okay, I need your earnest money in. When are you going to be closing? How are you funding this deal? Is it hard money, private money, your own cash? Because why all these matter when it comes to time, you need to have these answers available to you, otherwise, deals will fall out of escrow. You will be sending out terminations and we just had the video last week, right? What was it A week ago? Terminations suck.

Speaker 1: 26:01

Don't let that happen, because you let time pass by and you essentially just weren't paying attention.

Speaker 1: 26:08

So, as you're going through your day and you're taking these actions that are needed, make sure you are thinking about hey, is the next action I'm going to take wasting time? How much time am I taking here to make sure that I'm moving the needle and I'm moving in a positive direction? Is this getting the closer to getting the deal done? Don't get off of a phone call and then decide to go on to your next lead before you comp it. If you need help, whatever, make sure you're staying on top of that one, because otherwise you're going to miss out on it. You're going to miss out on an opportunity to make money and I can tell you a lot of you, newer wholesalers, you don't have that margin of error to be missing out on these types of deals. So don't let time kill your deals. If you have an example of time killing a deal for you, drop a comment below. Make sure you like this, guys, and we will see you tomorrow on our live video. See you then.