Agents Building Cashflow

EP 164: Mastering Real Estate Negotiation with Tom Zeeb

• Tom Zeeb

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President of Traction REIA and real estate expert, Tom Zeeb, shares his journey from being in debt and struggling with his first multifamily investment to mastering wholesaling and negotiation tactics that helped him build a successful real estate business. Randal and Tom dive into how agents can work effectively with investors, how to identify motivated sellers, and Tom's proven strategies for marketing and negotiating deals. 

Tune in to hear Tom’s practical advice and the steps he took to become a thriving entrepreneur in real estate. You won’t want to miss this episode packed with actionable insights!

Key takeaways to listen to:

  • The importance of negotiating deals by finding motivated sellers and solving their problems.
  • Leveraging marketing tools like direct mail and driving for dollars to generate consistent deal flow.
  • How agents can collaborate with real estate investors to get repeat business opportunities.
  • The value of creative negotiation techniques, including bracketing and using specific numbers to drive down prices.

About Tom Zeeb

Back in 2001 Tom was broke as a joke. A near-death experience while whitewater rafting pushed him to find a new way to break free of his 9-to-5 job. His first "deal" almost took him under as well, but real estate investing saved him in the end. Both personally and financially. Hundreds of deals later, he is happy to share the same negotiation, marketing and business techniques that set him free, so you can do the same. Simple, structured, and step-by-step.

Techniques that take you from spinning your wheels to doing profitable deals. Investors of all levels struggle with their businesses. Newbies want to get started, but often keep hitting the wall of confusion and spinning their wheels. Intermediate and advanced investors often find that they made a wrong turn and built a business they aren’t actually happy with, but don't know how to fix and re-engineer it.

Tom works with real estate investors of all levels to get their business built (or re-built) correctly, so that their personal goals and lifestyle stays at the center of everything they do, giving them more money, more time and more freedom to spend as they please. It is amazing what a few tweaks to the core elements of your business can do for you. Tom teaches investors how to identify and implement those core elements.

Connect with Tom Zeeb:

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To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!

[00:00:00] Tom Zeeb: It was just off to this great start from being broke. From being 113 grand in the hole, from them buying a six unit building that was taking me under that was costing a heck of a lot more than I was making on it, to suddenly realizing all I had to do was find good deals, negotiate good deals, and sell them to other investors that wanted to actually do the deal.

[00:00:18] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities so you can take your commissions and turn them into cashflow. Here's your host, Randall. Let's dive in. 

[00:00:42] Randal McLeird: Hey, welcome back. Today, we have And only Mr. Tom Zeeb. He's the president of Traction RIA real estate investor association. He's a speaker, an entrepreneur and host of the art and science of real estate negotiation podcast. We have a great conversation. We're talking about negotiating [00:01:00] with sellers, how he's targeting sellers for his wholesale business, how he got into real estate in general, and just some of the tactics that he uses.

[00:01:07] Randal McLeird: So you're going to get something out of the show. If you are looking at some negotiating tactics, we talk about how. As an agent, you can work with investors, which is something you should be doing or should consider doing if you're looking for a niche. So you're going to get something out of the show.

[00:01:21] Randal McLeird: Please go on written review, wherever you are, helps us out a ton with the reach, with the guests that we get on the show and all of that. As a reminder, we have the Ram capital fund. We are raising capital for, we are buying single family houses or creating notes in the Texas market. And you can earn up to a 10 percent return on your money for investing in that fund with us.

[00:01:41] Randal McLeird: Check it out at the link in the show notes and let's jump in. Here we go. All right, Tom, it's good to have you on the show. Welcome in. I wanted to get started. I know that you have some whitewater rafting experience in background, man. So I always like talking about sports and that sort of thing. So what happened?

[00:01:58] Randal McLeird: You had this [00:02:00] crazy accident and then something got you into real estate from there. Like, give me the breakdown, like what actually went on there. 

[00:02:06] Tom Zeeb: Yeah. It was my first time whitewater rafting and, uh, I was doing it on the other side of the world in India. River with a bunch of buddies. Cause I was, uh, I was escaping from the misery of my life back at home, which was an absurd amount of debt stuck in a job that I didn't like anymore.

[00:02:26] Tom Zeeb: Tired of everything. And yet, what am I supposed to do? Cause I'm saddled down by the debt. So I just escaped for two weeks, take my vacation, spend money. I didn't really have put it on credit cards and go whitewater rafting with a bunch of buddies. And I couldn't stay on the raft at one point. We went through a very rough class five rapid and I went flying over the edge and then I was sucked underwater without much of a chance to catch my breath.

[00:02:47] Tom Zeeb: And there was a lot of tumbling and turning and bashing in the rocks. And then you start to think a lot of things as you're, uh, as you realize that you're probably going to black out pretty soon from not being able to breathe. And the weird thing was, I didn't get scared at that [00:03:00] point. I got angry. I was angry at what I like.

[00:03:03] Tom Zeeb: I haven't done anything in life. It was, it was, you know, it was young, I was 23, 24. And I said, you know, something is way out of whack here. And I got to fix it. I get out of this. I'm going to fix it. I'm going to pay off my debt. I'm going to make a change. I'm going to get out of the corporate job. I don't like I'm going to all of this.

[00:03:20] Tom Zeeb: But the thing was, I had no idea how to do that. So as I came out of the water and all my buddies are laughing at me for going over the edge. I'm thinking, no, something's changed. I've got ideas. Now I've got, I've got a direction. Yeah, I had inspiration, but I didn't have any tools. 

[00:03:37] Randal McLeird: So how did that turn into real estate?

[00:03:40] Randal McLeird: I mean, I get, I get, so you had like a near death experience. It sounds like class five rapids first go around. That's a pretty straight into the deep end sort of deal too. 

[00:03:51] Tom Zeeb: What could possibly go wrong? 

[00:03:53] Randal McLeird: I mean, that's wild. We're just looking at going to Colorado to do some of that ourselves. So, but I don't think it's class five, but.

[00:03:59] Tom Zeeb: That's [00:04:00] fine. 

[00:04:01] Randal McLeird: So it's five 

[00:04:02] Tom Zeeb: is pretty rough. 

[00:04:02] Randal McLeird: Again, I mean, you get out and what kind of corporate gig were you doing? Like, what were you doing and what was the transition like? 

[00:04:09] Tom Zeeb: I was living in Washington, D. C., so the job was a cross between I. T. and politics. We did software for lobbyists or government affairs divisions of corporations.

[00:04:20] Randal McLeird: Okay. All right. And you were just done with that, like not happening. I mean, it 

[00:04:24] Tom Zeeb: was, it was interesting at first, but there was a point where I was also frustrated. I don't like the nine to five grind. I don't particularly like being told what to do or when to do it or how to do it. And I, I really was resenting being locked down kind of in the salary.

[00:04:38] Tom Zeeb: Yeah. Didn't matter how, how great I did. There wouldn't be a raise till next year. And even then it wasn't that much. I'm thinking, wait, why isn't this, why shouldn't this be more commiserate on what I do? But it, it wasn't, I realized the only way to get that was to, to feed this entrepreneurial spirit that had been welling up inside of me, but I didn't feel like it didn't get unleashed until I was done.

[00:04:58] Randal McLeird: Got it. [00:05:00] So again, how did you find real estate? Cause of the myriad of ideas and options and things that you could do as an entrepreneur, like real estate is just one drop in the bucket, you know? So, 

[00:05:09] Tom Zeeb: yeah, it wound up seeming to be the only accessible one right out of the gate and the idea only came to me.

[00:05:17] Tom Zeeb: Because when I got home and I was sitting there frustrated and realized I was still stuck. I was stuck in debt. I was, I was still drowning. I was drowning financially. I was drowning with no time. And it was like, great. Here's that sense of drowning again. This is great. And then out of the blue, a friend hands me a copy of Robert Kiyosaki's Rich Dad Poor Dad, which I think, you know, probably 90 percent of your listeners have.

[00:05:38] Tom Zeeb: Well, it hit me like a ton of bricks. When I read it, I went, Oh, wow. And then I turned back to the first page and read it again, because it was really, really speaking to me and bothering me. I went, this is how I felt when I was drowning. This is my way out. This is my ticket forward. And he says to go by multi unit real estate, basically by cashflow and rental properties.

[00:05:59] Tom Zeeb: So [00:06:00] it doesn't tell you how I was ginned up and excited, ready to go. And I just dove in headfirst. 

[00:06:05] Randal McLeird: Lights of fire. That's a man. That's reminiscent of, of mine. Like when I got out of college and I was 22, 23, I went to live with a guy who was my age, same birthday, went to high school with him, but he had houses and cars and all these things.

[00:06:20] Randal McLeird: I was like, what are you doing? And he gave me that book. Same, like I was in the same boat. Like I had to borrow money to get back home from living, you know, it was wild. But, um, You read that book and it, it lights a fire and gives you an idea of something that's possible that you just did not know. I think that's the beauty of that book.

[00:06:36] Tom Zeeb: Yeah. There's a whole other world out there, except you haven't been taught that world. The world is there, but for some reason people don't talk about it. That usually the corporate area or the school area you've been in doesn't reveal that that world is actually legitimate there and totally awesome when you really get into it.

[00:06:55] Randal McLeird: Yeah. Yeah. So did you start with multifamily? Yes, I did. So, you [00:07:00] started a monthly. So, what was your first deal like? How did you break into the business? 

[00:07:04] Tom Zeeb: It was a total and complete disaster. This is back 2001. Okay. So, you know, yeah, they're throwing money at anybody that could fog a mirror, which included me.

[00:07:15] Tom Zeeb: I'm 113, 000 in debt from school and car and food and entertainment, and let's be frank, really bad financial habits. So I'm 113 grand in the hole and yet they're throwing a mortgage at me and I bought a six unit building in New York City in Brooklyn and a neighborhood called Bedford Stuyvesant and it almost took me under.

[00:07:37] Tom Zeeb: I was yet again, this like drowning motif keeps coming back and back. It was bad because I didn't know how to do anything. I just know I was supposed to buy. Hey, if you just buy real estate, everything is going to work out great. Well, it was it wasn't working out so great. 6 professional tenants that weren't paying a dime.

[00:07:54] Tom Zeeb: But the bank didn't care. I still had to pay them. 

[00:07:57] Randal McLeird: Yeah. Yeah. So did you buy it too [00:08:00] high? The tenants were bad. I mean, was it just the tenant situation or was it kind of all the above? 

[00:08:05] Tom Zeeb: Price was probably about fine. The tenants were bad. My due diligence, which should have discovered that nobody was actually, actually paying.

[00:08:13] Tom Zeeb: It doesn't matter what the rent role should have been. It only matters what it actually was. I missed all of that because I was a total rookie, a young kid that knew nothing. 

[00:08:20] Randal McLeird: Yeah, yeah, yeah. There's something to be said though about just trial by fire, getting in, doing it and learning by experience. I mean, so did you turn that property around?

[00:08:31] Randal McLeird: You get the tenants out? I don't know what New York laws are like now or back then, I guess, but I know there's some, has been some rent controls. So like at the time, you know, what happened, you know, as you get them out? 

[00:08:41] Tom Zeeb: Landlord friendly New York City. I couldn't get my foot in the spot too often. Buy a first property.

[00:08:45] Tom Zeeb: No, I wound up losing the property. 

[00:08:47] Randal McLeird: Okay. 

[00:08:48] Tom Zeeb: Let it go on a short sale. 

[00:08:49] Randal McLeird: Okay. 

[00:08:50] Tom Zeeb: And get rid of, uh, because it wasn't. I mean, it just, the situation was so bad. I wasn't going to get out of it. It was years. So, but I kept [00:09:00] focusing on real estate. I discovered that there were actually groups of actual real estate investors.

[00:09:05] Tom Zeeb: It wasn't just in books and I, I walked into my local real estate investors association area and I went, holy cow, this is, this is great. There's people that do this and there's people that that seem to do landlording successfully. And there's people that are doing rehabbing. And then there's these people.

[00:09:20] Tom Zeeb: I can't figure out that do wholesaling and I wound up. Wholesaling my first deal close to the home. I was living in Washington, DC at the time, even with the property in New York. And I found the property close to the home and I wound up assigning the contract for just shy of 23 grand. 

[00:09:35] Randal McLeird: Yeah. 

[00:09:36] Tom Zeeb: That changed everything.

[00:09:37] Randal McLeird: Oh yeah. Yeah. That's the one spark you need. You're like, Holy crap. It works. 

[00:09:43] Tom Zeeb: This isn't just late night TV. This isn't just something in the book. It actually works. 

[00:09:47] Randal McLeird: That's funny. So was it just from being in the RIA and talking to people? Did you get contracts from them and they taught you how to do it? Or you read a ton of books?

[00:09:55] Randal McLeird: I mean, YouTube university wasn't as big as it is now. 

[00:09:58] Tom Zeeb: No, YouTube wasn't. I don't even think [00:10:00] YouTube was functioning. We're allowed 32nd videos. Yeah, that's right. No, it was reading books, usually fairly old books from the library or sitting around the bookstore because I couldn't afford to buy any. And then, um, it was the reas I, my intent when I put it in a contract, my intent was to rehab it.

[00:10:17] Tom Zeeb: I'd go the big box, but somebody came up to me at the meeting and said, Hey, I want to buy that from you right now. I said, but how? I mean, I'm not done with it. I haven't fixed it. Mm-Hmm. . And he kinda laughed at me and said, look, kid, I don't think you know what you're doing, but why don't you just assign it to me?

[00:10:32] Tom Zeeb: I'll pay you to take the contract off your hands. And I said, you can do that? Yeah. Legally. Wow. And the check was $22,819 and 66 cents. I mean, that literally was amazing. And my 2nd deal paid out 5 grand. 

[00:10:49] Randal McLeird: So, 

[00:10:49] Tom Zeeb: it was just off to this great start from being broke from being 113 grand the whole from them buying a 6 unit building that was taking me under that was costing a heck of a lot more than I was making on it to suddenly [00:11:00] realizing.

[00:11:00] Tom Zeeb: All I had to do was find good deals, negotiate good deals, and sell them to other investors that wanted to actually do the deal. Yeah. I'm in heaven. 

[00:11:08] Randal McLeird: Yeah. I mean, that's the whole thing with wholesaling though. You like, you have to get those deals at such a deep discount. So what is it that you learned throughout that process that allowed you to negotiate those deals well below market value so that then you can turn around and sell them to someone else for a little bit more?

[00:11:26] Randal McLeird: Yeah. Yeah. 

[00:11:27] Tom Zeeb: Yeah, well, I found that it wasn't like I was going after anything that everyone else wasn't a rehabber needs a pretty darn good discount based off of what the future numbers will be and the landlord usually wants a good discount either on the value of the property or at least visibly what the rent role is.

[00:11:46] Tom Zeeb: So I found that as long as I could do a little bit better than that, I'd have my wholesale fees. And the thing was that rehabbers got busy. Rehabbing. They were always busy. They were like swamped with all these problems and they stopped marketing. [00:12:00] And the same thing with landlords. Landlords got busy dealing with tenants and toilets.

[00:12:03] Tom Zeeb: And they would stop marketing. I went, well, if I just focus on marketing, which is something I actually like, and then I negotiate, which is something I totally love, but then I could turn around and sell it to the other people that are too busy to actually do the full part of their business. And so, you know, this is a match made in heaven.

[00:12:18] Randal McLeird: So what kind of marketing were you doing? And do you still do, like, what are you, what's your, let's fast forward a little bit, like what's your business like today? You were doing this wholesaling 2001, two, three. Do you still wholesale? Do you fix and flip? Do you apartments? Like, what are you doing now?

[00:12:31] Randal McLeird: Yeah. 

[00:12:32] Tom Zeeb: Little bit of everything. Primarily it's 80, 80, 85 percent wholesale. I like a quick in and out. I like the ability to help people motivated sellers. And you know, the key is to look for someone that's motivated. They have a, they have a pretty big problem going on in their life. And that makes price not the number one issue.

[00:12:50] Tom Zeeb: It's more solving their problem is their number one issue, and they need to solve it fast. They need a fast solution. And using an injection of cash to them will solve that [00:13:00] solution. And so that creates the situation that we're looking for. They maybe can't wait around to list the property and see what happens in the open market.

[00:13:09] Tom Zeeb: I think particularly now as the market softens, that's becoming more true. Where before you could at least try to list it and you might get what you want. But as things get softer, then it's not as attractive. It's easier just to, hey, this is a done deal. Let's go with it and make it happen. So when I search for those people works out well, I searched for those people, the types of problems they have.

[00:13:28] Tom Zeeb: That show up in public record, like they've inherited a property or they're going through divorce or they're going through a bankruptcy or something negative has happened and they need help getting out of that situation. And usually selling their house can help them out of that difficult situation.

[00:13:46] Randal McLeird: Okay. And so you're finding them, are you direct mail? What are some of the tactics you're using to actually reach out to them? 

[00:13:51] Tom Zeeb: Yep. Direct mail is big. So, you know, you, you develop a list. A courthouse and you mail them, you mail them letters, you mail them postcards with a message that [00:14:00] matches what their situation is.

[00:14:01] Tom Zeeb: That way they go. Oh, yeah, that's me. Let me call do some more broadcast advertising, like, uh, targeted ads and newspapers or classified sections or certain web portals. And 1 of the biggest things this last, uh, last couple of years has been driving for deals. using a specific app. I use the driving, I use the deal machine driving for deals.

[00:14:20] Randal McLeird: Yeah. Yeah. Somebody literally the post office, the postman was here at my office the other day and he walked in. He's like, Hey man, you do real estate. I'm trying to get into it. Like, did you see more deals than most people just because you're driving around? I was like, here's an app. So I showed him deal machine and he was like, Oh, what?

[00:14:35] Randal McLeird: That's crazy, man. So beautiful. Yeah. That's a pretty solid little setup. Okay. So Again, so deal volume right now, your wholesaling is at your number one deal, if it's 80 percent of it. So how many deals are you trying to do a month? What's your average deal size on a profit? You know, like, what does that look like?

[00:14:54] Tom Zeeb: I aim for a deal a month. 

[00:14:55] Randal McLeird: Okay. And then your 

[00:14:57] Tom Zeeb: Lifestyle is the center of my business. I like to keep it focused. [00:15:00] I aim for a deal a month, which means Some months there's three deals and then four months ago by with none. I, so that's aiming for about 12 a year, right? How do you maintain a deal a month? You can't because the world, it's just crazy.

[00:15:11] Tom Zeeb: So you wouldn't do to have that on average. So 12 is a good year. 15 is a great year. 10 would be a little bit off. 

[00:15:19] Randal McLeird: Are you only doing Florida or where are you? Where are you doing now? I 

[00:15:22] Tom Zeeb: still do the Washington DC area where I used to live. I'm in Florida three years ago. 

[00:15:27] Randal McLeird: Okay. And so average deal size for wholesale up there, what are you getting typically?

[00:15:33] Tom Zeeb: DC area has been higher. DC area I'll usually get between 20, 000 and 25, 000 wholesale. 

[00:15:38] Randal McLeird: Okay. 

[00:15:39] Tom Zeeb: Florida, I've been more in the 10 to 12 range. 

[00:15:41] Randal McLeird: Okay. Yeah. Yeah. Yeah. It's interesting. Cause I've seen, we got out of wholesaling a while back and then I started buying deals from wholesalers recently just because, you know, like we're doing an owner finance exit and so seeing the spreads.

[00:15:55] Randal McLeird: Back in the day, like I was always tracking it, seeing what they were getting and they got up to like [00:16:00] 85%, sometimes 90 percent ARV because he had all these eye buyers coming in and all kinds of stuff happening, you know, and now I think the prices are softening. I don't know what you're seeing, but it definitely seems like prices on the back end of the retail flips are actually coming down and there's a lot of inventory on the market from retail flips.

[00:16:17] Randal McLeird: And so my pricing has gone even lower. So again, I don't know what you're seeing on the actual sales side. When you're wholesaling these things, like what's your target in that area? Like, are you selling 70 percent deals or are you guys still a little bit higher? 

[00:16:29] Tom Zeeb: Yeah. I try to aim right for at 70, because when the market's hotter, people would slide up to dance 72, 73, 75, but as it cools, they tend to want to tighten the belt and you should be in the high sixties.

[00:16:40] Tom Zeeb: So I'm, I'm aiming for around 70, if it's justifiable, but yeah, when I look at the slowness of the market, and when I look at the listings that I have tracked that come back as price reduce, price reduce, price reduce, price reduce, I go, okay, I'm not going to be trying to hit above 70 percent for a while until that balances out because people get nervous.

[00:16:58] Randal McLeird: Yeah, I agree. And I think you'll, you'll move [00:17:00] your properties or keep your investors happier with that. So. We have a lot of agents that listen, how can an agent work with an investor or wholesaler and what are some tactics, I guess, that they could use? When working with, and I know you're, are you the president of a ARIA?

[00:17:16] Tom Zeeb: I am. 

[00:17:17] Randal McLeird: So I'm sure you have a lot of, a lot of investors in your area. They can, how can they either work with an agent or how can agents reach out to investors? What are some tips that you have there? 

[00:17:26] Tom Zeeb: Yeah, that's a great question because it was that kind of, uh, Aren't investors and agents oil and water?

[00:17:31] Tom Zeeb: Don't they never mix? Sometimes there's difficulties mixing, but when you get it right, it could be a beautiful thing. I mean, the agents that I've done business with over the years get a lot of business because If my buyers are rehabbers, well, when they finish that property and is bright, shiny, beautiful, and ready to go on the open market to get top dollar, the only spot you're really going to get that property is by listing it with an agent.

[00:17:54] Tom Zeeb: So it behooves these agents to become close with rehabbers that they could resell their [00:18:00] properties for. I mean, think about it. If you, you buy a property from a homeowner or, you know, you list a property for a homeowner, you might get repeat business in, you know, 10, 15 years when they resell. You focus on an investor, you have the potential to be doing multiple deals.

[00:18:16] Tom Zeeb: So I think it's a great way to set it up. Now, what are investors after from agents? Well, we need some data. It might be access to the MLS might need you to run comps now. And the way I set it up is look, Hey, Mr. And Ms. Agent, I'm an investor. I'm not licensed. There's some data you can pull more easily from the MLS than I could on my own.

[00:18:36] Tom Zeeb: So it's public record data, but if you pull it for me, then I'm going to bring my listings to you. Or I'm going to give you the leads that I can't do anything with. Cause quite honestly, Randall, when I do my marketing, nine out of 10 leads want full price and no fancy terms that doesn't do me any good as an investor, but it's perfect for an agent.

[00:18:56] Tom Zeeb: So I say, look, you're going to get all those. Now, I think you got to say agents understand [00:19:00] some numbers game as well. If one out of every 20 leads turns into a listing, you're a happy camper, right? 

[00:19:06] Randal McLeird: Yeah, yeah. What's your conversion rate? So, leads out, yeah, like how much are you spending to get a deal is what it kind of boils down to.

[00:19:13] Tom Zeeb: Depends on the list. So, for example, I love out of state absentee owners, but I do about a 1 in 37, where when I get the probate, I'm more a 1 in 11, 1 in 12. But there's not as many of those, so it could take you long. So that's why I like to the striker rate, as you call it, is based on kind of what type of list am I after some are more motivated than others.

[00:19:36] Tom Zeeb: Internet leads. I fly up into around 1 and 63. So internet leads are not as high quality for me, which means I try to not tighten the belt, but tighten the filter on it. So that leads come through because otherwise I'm wasting a lot of time sorting, sifting, and separating through all those leads to get to the one good one.

[00:19:54] Randal McLeird: Yeah, that makes sense. Yeah. So the number one lead source for you right now, is it direct mail? Is [00:20:00] it calling you doing any cold callings you get a, I don't love cold calling. 

[00:20:04] Tom Zeeb: I do. We do a little bit of it. I don't personally, I have some students do it, particularly if they need that kind of baptism by fire to get, but it, but it, it tires you out.

[00:20:15] Tom Zeeb: So I'd rather have warm calling, like mix the calling in with the direct mail. So my number one sources are direct mail letters, both cards tied with deal machine. 

[00:20:24] Randal McLeird: Yeah. Oh, deal machine. Okay. So do you just give access to a bunch of people and you're like, Hey, I have a bunch of minions running around getting deal machine on their phone, sending leads that come back to you like the mailman or like, you know, or how do you set that up?

[00:20:37] Tom Zeeb: Yeah. Mailman are great. Bird dogs like that. If you have any sort of bird dog teams, it's perfect for that. Otherwise, my students, I don't have them send me the leads. I let them work on them themselves. I'm big on, I just philosophically, I'd rather, I'd rather teach you how to fish rather than just throw fish at you because then you can actually go off on your own really fine.

[00:20:56] Tom Zeeb: So I, I'm like, Hey, set up your deal machine, set up [00:21:00] your direct mail and show them exactly what to do. Give them all the materials and the messaging that connects the letters, the postcards. Yeah. Customize them out their name, their phone number, get it out there. And now let's deal with what comes back.

[00:21:10] Tom Zeeb: Cause once they're trained how to do it, they're good as gold. They're good forever. I don't want them needing me over time. 

[00:21:16] Randal McLeird: Yeah. Let's talk specifics on marketing then. Cause I like, you know, copywriting and, and knowing what to, what type of piece to send. You mentioned that you're doing some, some probate.

[00:21:28] Randal McLeird: So is that typically a letter and, and a number 10 envelope? You know, handwritten like, what are you doing? Like, what's some of the nitty gritty tactics that you got that that work? 

[00:21:39] Tom Zeeb: That was a yes and no. And I kind of, is it a letter? Yes, it is a letter because probate, you know, I mean, somebody died. So it's a little more gentle to put it in a letter than splash it out on a postcard.

[00:21:52] Tom Zeeb: It just feels better. No, it's not a number 10 envelope. And if people aren't aware of what that is, you know, everyone knows what it is. You just may not know the name, [00:22:00] just that standard rectangular envelope. No, that's kind of boring and blends in. So I encourage people to go get a different size and shape envelope.

[00:22:08] Tom Zeeb: Usually. More square, so it looked like an invitation or a condolence card or a wedding announcement or graduation, whatever. So that way it stands out a little bit and did not have it be plain white. Get that in a color and then. With handwriting, I said, that was the kind of maybe handwriting will stand out.

[00:22:28] Tom Zeeb: It does help to get your letter open. I just don't think you necessarily need to be handwriting them yourself. There are enough. There are enough really good handwriting fonts so you can just still malemerge it. And run it through your printer. And if you take a handwriting font on blue ink, it looks pretty darn good.

[00:22:45] Randal McLeird: Yeah. Yeah. Good call. I like that response because, um, Uh, number 10 looks like a bill, like if you're sending that out, you know, it's the standard bill size. And so the, the negative connotation already associated with getting that letter [00:23:00] as a, as a recipient, you're like, Oh yeah, what is this? So, all right.

[00:23:03] Randal McLeird: So that's some good advice there too. So, and so are you doing this, do you have a mail house or do you do this at your house? And you're just like, okay, I'm going to send out, because I'm, you're, you're not dumping like. Hundreds of thousands of mailers at a time, speaking of the mailman, there he is. Yeah, there 

[00:23:19] Tom Zeeb: he is.

[00:23:21] Tom Zeeb: Any deals, man? No, with the, it's, I mean, in the very early days, I would address everything, stamp everything on the lobes, right? But. No, I do it all through mail shops now. I want it easy. I want it done. It's easy to repeat. Just, you know, design what goes on in the postcard. Upload the list. Pop in my credit card number.

[00:23:45] Tom Zeeb: Click send. It's done. It's much better that way. 

[00:23:48] Randal McLeird: Yeah, if you're not using a mail house, if you're trying to do a lot of direct mail and you're not using a mail house, like you should reconsider. There's a number of them around the country that you can get a super low rate. [00:24:00] Or for sending out a lot of postcards.

[00:24:01] Randal McLeird: So, all right, let's talk a little bit about just negotiating in general. I know that that's a big thing for you. And so when you're going out and you're having these conversations with, with sellers, are you the one that's having the conversation still? Do you have a team that is talking to the sellers?

[00:24:16] Randal McLeird: Like how, how does that look before we dive into this? 

[00:24:19] Tom Zeeb: Yeah, combination. So it kind of depends how the leader came in. I want to, I want to get on the phone and actually negotiate with someone once they've kind of passed the initial test to see how they, you know, are they at least. Did they have an outboard chance of becoming a positive deal?

[00:24:39] Tom Zeeb: Fine. I want to talk to them because talking to me builds rapport. Like there's rapport being built between you and me right now. There's rapport being built between both of us and your listeners purely from the fact that you're spending time listening to somebody. So that's an important part of the process.

[00:24:54] Tom Zeeb: So yeah, I want to have the secretary that answers the phone, [00:25:00] get some basic questions as a screen, but I don't want the report built with her. I want it built with me. So I, it's the same thing if you're using a call center or something else to answer your calls. I don't want a lot of rapport built with them.

[00:25:11] Tom Zeeb: I want them to be more of a gatekeeper. But once it pops through to me, I've got to spend the time talking to somebody because that conversion is going to happen in the conversation.

[00:25:24] Randal McLeird: For, for your flow, when do they actually get through the gatekeeper to you? Like, what is your trigger that it's like, Oh, I'm interested. Or is it, Hey, they gave me a price or what is, what's the trigger? 

[00:25:36] Tom Zeeb: That they've, that I've seen some movement that shows some degree of motivation and flexibility. So, you know, maybe they've been asked primarily how much you asked me for the property?

[00:25:47] Tom Zeeb: How long have you been trying to sell it? What do you think it's worth? And if there's movement on those numbers and the answers to those questions, I start to get a sense of this person's got a little bit of a soft, they got a [00:26:00] soft bottom. I can, I can, I can move this further down by applying some good negotiations codes.

[00:26:05] Randal McLeird: Yeah. Yeah. It's not just a, give me my number type of person, right? If 

[00:26:11] Tom Zeeb: I asked you, how much are you asking for the property? 300, 000. Okay. What do you think it's worth? 300, 000. You know, if I offered you all cash and close in 10 days, how much would you take for the Robert 300, 000 plus you can do? Yeah. Well, does that sound like somebody you need to have a long conversation with?

[00:26:27] Randal McLeird: Yeah. If I 

[00:26:28] Tom Zeeb: say, if I say, Hey, how much you asking 300, 000? What do you think it's worth? Ooh, I don't know. Maybe it's worth might be worth 250. I don't know. Okay, well, you know, if I were to offer you, I guess I would do 330, 335. I don't really know. Yeah. Now, again, whether or not that's a deal yet, we don't know, but the fact that we've dropped 70, 000 from just having a conversation tells me this person's worth spending my time on.

[00:26:54] Randal McLeird: So on a purely nitty gritty tactics, how to sort [00:27:00] of logistics, are you. Getting a transcript for that conversation. Are you listening to the recording or are you just looking at whatever is in your CRM that your secretary typed in? Like what's ahead of you? The answer to 

[00:27:12] Tom Zeeb: the phone is, is, is give me the brief questions either by email or CRM.

[00:27:17] Tom Zeeb: And I don't know if I'm looking at that. So I'm looking at it in a summary, basically. Now I know how I'm going to approach it when I call back and really engage the person. Yeah. 

[00:27:27] Randal McLeird: I just didn't know if you were. Sorry, go ahead 

[00:27:30] Tom Zeeb: in the conversation or in the negotiation. 

[00:27:32] Randal McLeird: Yeah, I just didn't know if you would listen to the conversation to get their tone and see how they responded to those things because that's even diving a little bit deeper, you know, but yeah, 

[00:27:42] Tom Zeeb: I don't mostly out of out of time.

[00:27:45] Tom Zeeb: I mean, rather than just I'm going to call it as long as the. So as long as I look at that executive summary go, there might be something here I call. I'm going to generally be re asking the same questions anyway, and start to move around. So I'll get the sense of their tone in the moment when I'm on the phone [00:28:00] with 

[00:28:00] Randal McLeird: them.

[00:28:00] Randal McLeird: Yeah. That's huge. And so, okay, let's talk about when you're on the phone and what are some of the negotiation tactics that you use in order to drive that price to where you need it to be. Before you get to that, actually, are you researching the property prior to you having this conversation? Or is it like, Hey, I know that the ARV is 200 and I have to be minimum a hundred thousand purchase.

[00:28:25] Randal McLeird: Where are you in the process? 

[00:28:26] Tom Zeeb: If I have the address, I'll take a quick peek and a real quick look at comps. If I'm not familiar with the, with the area, I don't want to spend too much time on it because if, if I spend 20, 25 minutes, half hour researching the property and then I call them and within 30 seconds, that conversation is dead.

[00:28:44] Tom Zeeb: I just lost a half hour of my life that I'll never get back. I'd rather have a conversation with them first. And then if it's still a live one and it's still looking good, now I'll bother to put the time in the comps and put the effort into doing a little bit 

[00:28:57] Randal McLeird: more work. Yeah. I just think it's important to know that [00:29:00] for if you're listening and you spend a ton of time researching, you are going to be wasting a lot of your time, right?

[00:29:06] Randal McLeird: Just get on, pick up the phone and call and, and, and then you'll find out a lot more. Uh, okay. So now you're on the phone with him and you don't know the ARV. You don't know anything really about the property, but you're just trying to know the person, right? So tell me some of the things that you do, some of the conversation.

[00:29:23] Randal McLeird: Uh, starters or, or whatever it is, how, how does that phone call go so that you're getting to the information you need? The 

[00:29:29] Tom Zeeb: main thing I'm after is, are they flexible? Are they motivated and are they flexible on the price? So I'm, I'm starting to test for that almost immediately. I'll build a rapport at the beginning by asking you some basic questions.

[00:29:41] Tom Zeeb: Hey, you know, tell me about the property. Am I bedrooms or am I baths? That's a real soft question. No one's going to be offended by that. Uh, you know, then, hey, so why are you selling it? And maybe they open up a little bit about the situation and you can keep kind of peeling off another layer of the onion and going deeper.

[00:29:56] Tom Zeeb: Maybe the person gets a kind of avoids the pain of that and [00:30:00] jumps over to more numerics or talk more about the situation, you know, the, the condition of the property. Okay, fine. But eventually I'm going to start asking some specific things. So when I ask them for asking questions. No matter what they say, I flinch.

[00:30:16] Tom Zeeb: So on the phone, I'll make some noise on the phone. So Randall, say a number. 

[00:30:21] Randal McLeird: Uh, 200, 000. 

[00:30:23] Tom Zeeb: Woo. 200, 000. Woo. 

[00:30:25] Randal McLeird: Yeah. 

[00:30:26] Tom Zeeb: I kind of, I act visibly or audibly disturbed by, by the, by that number. And that initially sets them, it sets their mind going, Oh, wow. Did I do something wrong? He doesn't like my number. Must not be right.

[00:30:38] Tom Zeeb: That must not be good. So I'm already putting some downward pressure on the price. Then I'm going to aim for what I want versus what they said, so let's say I, you know, I have an inkling of an idea of what I think it's worth. We tend to meet in the middle, right? That's just a standard thing. People meet in the middle.

[00:30:57] Tom Zeeb: So what I want to do is engineer where [00:31:00] the middle is so that the middle is exactly where I need it to be. That technique is called bracketing. So if if I ask them how much and they say 300, 000, well, let's say I need it at 250. So they're 50, 000 high. So to make 250, 000 my target, the middle, I have to go the same distance lower.

[00:31:19] Tom Zeeb: So if they're 50, 000 high, I've got to go 50, 000 lower. So if they say 300, 000, I've got to start at 200, 000 to move towards the middle where everything seems to feel fair. Except that, wait a minute, you know, that just feels like spitball. And they say 300, you say 200. So I would never offer 200, 000.

[00:31:38] Tom Zeeb: Instead, I use another technique called specific numbers. And I would offer something like 203, 579. Because now they stop and go, Oh, what, you know, what's, what's going on there? Like, how does that number sound to you? 203, 579. 

[00:31:55] Randal McLeird: Sounds a little low. Sounds a little low. I don't know. It's weird. How'd you come [00:32:00] up with that number?

[00:32:00] Tom Zeeb: It's weird. How'd you come up with that number? Like you carry this. It also means he didn't just throw a number out there. It sounds like he actually thought about this number. He scientifically calculated that number. He must be doing some sort of math and some sort of spreadsheet where I honestly, I just threw the number out there because I like, On even specific numbers because it, but it makes people think that they're scientifically calculated and that's important when it comes down to it.

[00:32:23] Tom Zeeb: It's funny. I was, I was doing a deal through an agent and a lot of times I have agents tell me, they're like, oh, don't do any of that silly negotiation stuff that that doesn't work. Agents don't like that kind of thing. I said, it does work and we are going to do it. So if you want to work with me, then you have to.

[00:32:39] Tom Zeeb: Because I find myself, I can't, I'm not the one saying it. If I'm working through an agent, I'm kind of pulling the strings and the agent is saying the things. And I, I, I, I put an offer out, you know, ending in my classic 579 and the agent goes, how'd you come up with that? I mean, she basically flinched herself.

[00:32:56] Tom Zeeb: How am I going to explain that to them? Why would the seller take that? [00:33:00] I mean, that's just, I'll tell him you're in the numerology. I said, Oh, no, no, no, no. Don't, don't tell him I'm in the numerology because I had looked up who the actual owner was. I said, they're going to think I'm flaky. No offense to anyone else, but it just, it didn't fit the personality types.

[00:33:14] Tom Zeeb: I said, no, no, tell him I'm, uh, I'm obsessive compulsive and that I'm really exact with my numbers in my math because I want to see what the response is. And I said, look, I'm not asking you to do anything wrong, but I am asking you to do this and put the number across just like I stated because I want to see what happens.

[00:33:31] Tom Zeeb: And sure enough, they had that kind of what the hell is that? Well, that's a weird number. And then the price dropped see, it works. You just have to do. So those 3, I use almost everything. I start by flinching at their number. I bracket to create a distance, so I can pull them down to the middle. Which is engineering where I want to be.

[00:33:52] Tom Zeeb: And then I throw out a specific number to really get them to think that I've put some time and effort into it. 

[00:33:57] Randal McLeird: Yeah. Yeah. Anchoring at the lower, uh, uh, [00:34:00] yeah, exactly. And then, and then building your case as to why or letting them sell themselves on, um, on lower, which, which way do you typically go? Do they, do they say the number or do you get to a point where it's like, Hey guys, let's just make this deal happen at two 50.

[00:34:18] Tom Zeeb: I will still try to, you get down. If you get to an impasse at some point, let's say we're not quite at two 50. Yeah. Let's say I'm at two 60. I've got them up to two 40. We're still not there yet. I could offer to split the difference. Except it's not usually very wise, because if I offer to split the difference and they say yes, then I won.

[00:34:39] Tom Zeeb: And I, I, one of the negotiation principles that I like to live by is always let the other side feel like they won. Yeah. I want 'em to feel like they're the winner. I, I know I'm gonna win. And so it's fine either way, but I say, so I, I instead, I would try to get, convince them to ask me to meet them in the middle, to, to ask me to split the difference and go to that two 50.

[00:34:58] Tom Zeeb: So that's usually a, a [00:35:00] conversation. Something like, you know. Gosh, Randall, you're, you're at 240. I'm at, I'm at 260. We've come so far. Uh, is there anything we can do? We're so close. Be ashamed that I've come this far, not be able to do a deal together. 

[00:35:15] Randal McLeird: Yep. 

[00:35:16] Tom Zeeb: And then you go, Oh, well, um, I guess I'll meet you in the middle.

[00:35:19] Tom Zeeb: Uh, I'll say the middle. Oh, you mean like two 50? And then I flinch again, cause these are all stackable. I go off to 50. I might be able to do that, but I need to check with my people. Let me check with the senior. People on my team, the senior people in my office, and we make sure everyone's cool with that.

[00:35:37] Tom Zeeb: So I'm alluring to a higher authority, even though I don't have the right, the buck stops. I don't want anyone to know that I want them to feel more comfortable. And it keeps me I'm in the client facing position. So I get to be the good guy. And I can make the higher authority of the bad guy. 

[00:35:53] Randal McLeird: Yeah. Yeah.

[00:35:54] Randal McLeird: Okay. So when, uh, do you have [00:36:00] Any data that shows like what you've been able to negotiate down. I guess that's a really strange, like, it's not something that I've ever tracked, but I was going to say, 

[00:36:08] Tom Zeeb: I'm not that exact of a tracker. 

[00:36:10] Randal McLeird: I get great drops 

[00:36:13] Tom Zeeb: all the time. I mean, it's not uncommon to. Like, even taking the same kind of scenario, if someone's asking 300, I'll finish at 225 or 235.

[00:36:23] Tom Zeeb: It's not uncommon to take a, uh, a 600, 000 initial ask and wind up, you know, nailing that for 454. 75. It's usually, there's, there's enough of, of these, of these spreads in there. And sometimes, look, my biggest spread I've ever created was, uh, 65, 188 from just, you know, the basic negotiation skills, but that was, yeah, I was an older woman.

[00:36:46] Tom Zeeb: She was basically preparing to die, making sure she was taking care of her estate and getting everything off the plate so she didn't create a headache for her family, and she didn't have a mortgage on the property so the property was a mess wasn't in good shape. It had a tenant that wasn't [00:37:00] paying. She was just worried about getting rid of getting rid of it at all.

[00:37:04] Tom Zeeb: I said, I'll happily take that off your plate and made an initial offer. And man, I mean, we didn't even come up for it. Very much. Yeah. And I went, wow. So it created this massive spread. So yeah. The, they're not a consistent be it can't be consistent 'cause No, for sure. No two beings are consistent. Right?

[00:37:19] Tom Zeeb: Yeah. No two deals are the same. So, um, but I, I use the same techniques consistently and that always opens it up, so I know I'm getting the best price that I'm at there. True. Bottom line. 

[00:37:30] Randal McLeird: So then let's take it to the other side. You're selling to a guy like me, you just, uh, I'm, I'm the rehabber flipper. What kind of tactics are you using on me to get the highest price possible?

[00:37:41] Tom Zeeb: Yeah, I know that you are a professional in the business and you're every bit into the numbers as I am. So one of the main things I'm going to do is back up everything I say. Because if you try coming at me saying, oh, I don't think the, uh, the after repair value is really that [00:38:00] I'm going to have my comps really solid and ready to go to say, no, I, it is if you say, oh, the repair estimate isn't going to be, it's not that low.

[00:38:09] Tom Zeeb: I'm going to say, yes, it is. It'd be very detailed about it. So also I'll be pretty clinical on the buyer side because my main thing is I'm putting it out there. Where it works for the buyer where they want to buy at. And I know how much I have it for, which I do not reveal to them at first. So I choose a buyer.

[00:38:25] Tom Zeeb: And then when they signed the contract, they found out everything, but it's only the one that I actually choose the only person that I actually choose. But I want to make sure generally that I'm backing up everything that I say with facts, with the power of the printed word as much as possible. So that's, that's realtor comps from the MLS.

[00:38:44] Tom Zeeb: And that's a lot of photos of the property with a, with, with an estimate that matches and makes sense for what that repair is going to be. 

[00:38:50] Randal McLeird: Yeah, that makes sense. So do you have, have you, have you noticed just in general, then on, on your wholesales recently, have you had to discount some of your prices because [00:39:00] the market is different than 21, 22, 23, uh, what's the story?

[00:39:05] Tom Zeeb: Yeah, there's been a little soft, obviously softness. And so there's been buyer nervousness about what's their outsell price going to be. And I will still pack that with the solid comps as I can get. But when you're trying to keep your comps within the last few months and everything's slowed down and every month that goes by, there's less and less in that mix.

[00:39:26] Tom Zeeb: That's difficult. So sometimes, yeah, I've got to pull the number down and I'm okay to tighten my belt, if that makes sense. I'm also okay. If I need to, to go back to the seller and say, we need to renegotiate this. 

[00:39:38] Randal McLeird: Yeah. How does that, how does that conversation go? 

[00:39:40] Tom Zeeb: Well, usually at the beginning, it goes over like a lead balloon.

[00:39:44] Tom Zeeb: Nobody likes that. Hey, mom, you told me this was the price. And I said, I know. And and I'm stuck right now, because all of my people have looked at it again. I kind of blame my higher authority. All the, all the investors on my team are looking at it, but man, the market's solving. I don't know if you've read the newspaper at all.

[00:39:59] Tom Zeeb: And I can pull [00:40:00] out those clips about everything softening and the sky is falling. I said, so we're kind of caught in that right now. Here's what I think I can move it forward. So here's what I need you to come down to, and then we renegotiate it. It's an awkward, horrible conversation usually doesn't go down on the first try.

[00:40:17] Tom Zeeb: Usually they need a day or two to blow off some steam, but they, they seem to want to stick with me because it's better than switching horses midstream. 

[00:40:26] Randal McLeird: Yeah. Yeah. It is tough. I mean, we had those conversations quite a bit. When you had to be, but our spreads, you know, in the, in the run up were five to 10, maybe 15, you know, give or take.

[00:40:38] Randal McLeird: So anything that gets the deal done and the seller on their way gets them a, a sale, even if you're, you're having to squeeze your, like you said, tighten your belt a little bit. 

[00:40:49] Tom Zeeb: I, again, I'll do it if I have to, but you know, meanwhile. The same technique I'm using with the buyers that kind of power the printed word, making sure they see what the facts are.

[00:40:57] Tom Zeeb: All I have to do is go to the MLS and print [00:41:00] out price, reduce price, reduce price, reduce price, reduce, and increasing days on market. And people go guys, look, the market's not what it used to be. These people are still trying to get the price from a couple of years ago. They're hung up on it. I understand, but they're not going to get it.

[00:41:14] Tom Zeeb: So we, we need to come in kind of at what it should be or a few percent below so that we can actually get some interest and get this thing moved. 

[00:41:22] Randal McLeird: You have, uh, what is it? Trax and Rhea? So, how many, how many members is that? Is that a, is it large Rhea? Small Rhea? You guys try to keep it tight? What's, what's the story?

[00:41:31] Randal McLeird: What does that look like? 

[00:41:32] Tom Zeeb: Large ish, we're, uh, probably 450, 460 members nationwide. The primary groups, groups that have in person meetings are in Washington, DC, and then Tappan, Sarasota, Florida. But we also, we also cater to, to a large online community nationwide. 

[00:41:49] Randal McLeird: Got it. Okay. So the sentiment among investors right now, what are you guys saying?

[00:41:54] Randal McLeird: I'm trying to make sure people stay 

[00:41:56] Tom Zeeb: excited. Anyone that's been in the business is, [00:42:00] is at least on their first deal. So that's it. They start to move up to intermediate advanced. There's an excitement because good days are coming, but things get more difficult in the general market. People need investors more than ever.

[00:42:11] Tom Zeeb: Interestingly, though, beginners that haven't done anything yet. They just seem to want to like, Oh, it's not the right time. Like, well, wait a minute. Last, last year, it wasn't the right time because the market was hot. Now it's not the right time because the market's not. Gosh, when is it going to be the right time?

[00:42:24] Tom Zeeb: So, you know, people say that and I go that, that's, that's not the case. It's getting easier for investors. What's coming forward. And I'm happy about that. 

[00:42:32] Randal McLeird: Yeah. Yeah. I started buying in 08, 09 and it was, I mean, incredible, like I had incredible time to buy. Um, but also super scary for a lot of people because they didn't know what was happening.

[00:42:45] Randal McLeird: And I was so green. I didn't know. What I didn't know, I was just like, no, I'm just going to go buy a house. It works for me right now in this moment. So, uh, I'm going to make it work. And that, and that's the result 

[00:42:55] Tom Zeeb: were, 

[00:42:57] Randal McLeird: yeah, they're great. 

[00:42:57] Tom Zeeb: Yeah. 

[00:42:58] Randal McLeird: A bunch of 20, [00:43:00] 000 houses. They worked out well. Yeah. Wrote a lot of notes back 

[00:43:03] Tom Zeeb: there.

[00:43:03] Tom Zeeb: If you could go back, you'd buy three times as many for sure. So those days are here again now. So people ought to be doing three times as many as they thought they could do to do it and make it happen. Cause I think there's very happy days ahead, particularly on the investment side. 

[00:43:17] Randal McLeird: Yeah, I agree. Yeah.

[00:43:19] Randal McLeird: Tom and I think we leave it at that. That's a great, uh, great segue. I appreciate you jumping on, sharing your knowledge. I'm going to leave a link to all your contact information in the show notes. And, uh, and yeah, man, it's, it's good catching up here and what you're working on and what you're doing. Cool.

[00:43:36] Randal McLeird: Thank you. Awesome. Don't take care. Did you know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional. If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now.

[00:43:51] Randal McLeird: We'll catch you on the next episode. 

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Randal McLeaird

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Tom Zeeb

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