eCourse for Flipping Short Sales Module 11 Checklist
Short Sale Help
Short Sale Deal Flow
Seven Streams Flipping Short Sales MethodTM Lesson #11 Checklist – Creating Short Sale Deal Flow ***This condensed version of the main lesson is for review purposes only. For an in-depth explanation of each of the items listed here, please refer to the main PDF file or the MP3 audio version.
This week we’re going to talk about: The types of professionals that regularly come into contact with people in distressed houses. People facing the very high possibility of a foreclosure that will severely damage their credit rating. In real estate it’s about location and having contacts
You will learn how to contact these professionals and work with them to steer these people in hardship through the complex short sale real estate transaction. You will be given the right tools to convince other professionals they should be working with you. When a short sale comes to them, they will turn to you.
Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow There are different categories of professionals you will work with. You will learn the correct order to bring them on board so that you immediately have deals to begin working on. Your business will be a primed pump from the start. This is called deal flow. Having your short sale business Contacts pipeline continuously filled with more deals. Every create business needs deal flow but not every business owner deal flow knows the most effective way to create deal flow especially in the short sale business.
This is how you create deal flow for short sales….. By the end of this week’s eClass, you’ll have the knowledge, tools, and skills that will have others bringing deals straight to you and they will perform much needed services. Specifically, you’ll have the following things in place… Who to contact to bring deals to you. How to find and make contact with them. Exactly what to say at each step. How to get them to say “yes” to bringing you deals. How to handle their objections.
Who to Contact and When - to Create Deal Flow There are plenty of deals to be done and more on the way. Others will bring them to you.
With billions of dollars in loans either in or headed to foreclosure, getting short sale deals is not difficult. If you’re good at completing short sales it’s going to be simple to find more deals than you can handle. In fact I recently learned of one loss mitigator that periodically calls trusted real estate investors when he has a potential short sale in that investor’s geographic region. What could possibly motivate a loss mitigator to ask for an investor’s help? It’s easy…. when the loss mitigator works with the right investor he knows he’ll receive a complete package to complete the short sale. Amazingly, the lenders are now seeking out short sale
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow opportunities! So who’s going to bring these deals to you. These are the people you want to contact: Real estate agents and brokers The people Mortgage brokers and agents you want on your Other investors team Attorneys and accountants Others
A Brief Look at Who You Are Seeking Out Some of the people you will learn about in this lesson can bring you deals immediately while others will fill the pipeline and bring deals over time. Real estate agents and brokers belong in the first group, those For immediate that can bring deals to you immediately. results Mortgage brokers and agents can’t necessarily bring you deal flow today. They are being contacted by people not yet ready to sell their home. People still hoping to restructure their loan to stay in the house. But mortgage agents and brokers will bring deals when many of these clients realize they have no refinance options. Other investors are doing the same thing or something similar as you. With the hundreds of thousands and soon to be millions of possible deals, there is no reason to think of these people as competitors. Instead, look for ways to work with them. Look for ways to work with them to complete more deals. Compliment what they are doing or find specific projects to work on with them. Cooperate instead of competing. A lot of people trying to complete short sales don’t understand how to negotiate or complete a deal. They have a lot of leads but © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow close few deals. For these investors, you can offer to give a small percentage of your net profit in exchange for referring leads to you that they’ll never complete a deal for anyway. You’ll have a much higher rate of success based on your knowledge from the Seven Streams Flipping Short Sales MethodTM. A small percentage of something is always better than 100% of nothing. They will give you deals. Having seven potential income streams makes it easy for you to create an equitable position in almost any short sale. In almost every case, other investors will get more from the seven streams version than if they had been able to pull off the deal themselves. A bigger pie to split. Attorneys and accountants. People often turn to these people when they are in financial trouble. Specifically, you are looking for: Real estate attorneys Bankruptcy attorneys And to some extent probate attorneys Any contact that deals with people having money trouble can be a source
Anyone that regularly has contact with people in financial trouble. This can include attorneys that set up corporations and limited liability companies for small business owners. Most small businesses fail within two years and they know who is about to fail now. Attorneys that handle probate often become involved with real estate deals. People inherit a property they don’t want to mange. They certainly won’t want to make mortgage payments if the house is up side down as so many are in today’s world. How to Find These People The first ones you want to contact are real estate agents and brokers. Pick up those free real estate listing booklets you see around town. Sometimes they are near the doorways of stores.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Sometimes they are with newspaper stands. Look for listings that are “contingent on 3rd party approval”. Look for agents that run these ads in the listing booklets. You can go to Realtor.com. Type in your city and state to find a long list of realtors in your area. There are many places you can find these people
Call a few local real estate offices and ask if anyone in the office specializes in short sales. Tell them you are a real estate investor. A cash buyer. Hunt out mortgage companies that are advertising to distressed homeowners. Mortgage brokers are doing loan modifications but not all of their clients qualify. Call companies offering to buy “ugly” and “no equity” houses. You’ll often find these on bandit signs stuck up in high traffic areas. Look in newspaper classified ads for the same thing. And for rehabbers. Whenever you talk to someone, especially those that can’t or won’t work with you, ask them for a referral to someone that might. Next is the Face-to-Face Meeting Once you have found someone that you want to work with, schedule a face-to-face meeting with them. Do it at their office, your home, or Starbucks but make it a face-to-face meeting. A face-to-face meeting: Gives you a much higher chance of becoming a memory in
the person’s mind than a telephone call does. It demonstrates a strong work ethic. It’s a higher commitment level. It begins building a relationship.
You can use meetup.com to find local real estate meetings. Take the time to meet the presenter and those asking questions. These © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow are hard working professionals. Something similar is REIT or Real Estate Investors Association. Easy Tip: What you want to do here is use the people multiplier. Get in front of as many people as possible that know as many people as possible. Simply type REIA [your location] into Google and you should find local meetings. Another way is to go to open houses on Sundays. You can easily meet 7 or 8 real estate agents there.
Your “Assignment” for Stage #1 Start trying several of the ways you’ve learned to begin meeting real estate professionals in your town or region. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.or/e-classes2
What to Say and Do at the Meeting What you’re after in the beginning is to build a network of people needing your short sale or loan modification services. Only after you establish your network is it worth direct marketing your services to homeowners facing foreclosure. The Chance Meeting –v- An Appointment Sunday open houses and the real estate investment meetings are great places to meet someone and shake their hand. But you aren’t likely to do any serious business at those places. The end goal of these meetings is to set up a future appointment © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow for a one–on-one meeting. You want to sit down for a cup of coffee or meal to discuss possible future business relationships. If you can’t accomplish setting up an appointment, at least build rapport so that a future face-to-face can be scheduled. Your Script to Getting the First Meeting Appointment Here is the exact script that I suggest you use to set up the faceto-face appointment. “I’d like to set up a 30 – 45 minute meeting with you to discuss what I can do to help you make money with short sales.” When others have a short sale negotiator
Since you’re seeking out people familiar with the short sale process, you’re likely to run into people that are already using a short sale negotiator. Some back office operation that collects a fee but rarely closes a deal. They don’t actively pursue putting a complete package together. Instead, they collect whatever information the seller can quickly and easily provide and send off a package to the lender that falls well short of what the lender needs to make a decision. Certainly, they don’t make the effort to document all of the short comings of the house and neighborhood. There won’t be any equity in the deal to motivate them to complete the deal. At best it will languish in a stack of paperwork until the lender forecloses or caves in to a poorly designed short sale if a buyer will hang around that long.
You will increase the number of profitable short sale they close
When your prospective team member says they are already working with a short sale negotiator, here is your response: “I’d like to meet with you to discuss how we can work together to increase the number of short sales we can complete.” Your emphasis is on increasing the number that you will complete for the team. Getting the Most From the First Meeting
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Come prepared with a brochure or printout of some kind. Something you can leave with the other person. Basically a summary of what you think you can do to help the other person’s business. It’s about benefits for them. A short introduction of yourself and the mission of your
business. What the business relationship with others might look
like. Emphasize the benefits to your prospective team
member. Include the benefits that all will receive – buyers, sellers,
the lender, your self. I’ve included a sample of a service summary as a separate file. You can use it as a beginning to write your own. The First Few Minutes of the Meeting During the opening moments of the meeting you’ll gage how social the person is. A highly social person will want to get to know quite a bit about you during the introduction. A work focused person will want to get right down to business. Most people will fall in between. Once you get down to business, your opening line should be something like: “What I’m going to show you today is a different way to do short sales. Not the typical way most people are doing them. And it’s been highly successful compared to the way others are doing it.” The best way to control a conversation is by asking questions. Questions steer the conversation onto the topics that you want to discuss. After the brief opening statement above, follow up with a question: “What do you like most about short sales?” © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Assuming the person is knowledgeable about short sales, you can expect one of three answers: 1. The money 2. The abundance of deals that can be done 3. Or a combination of both of the above – the money and abundance This one will be a star on your team
The bright ones will give you answer 3. Both the money and abundance of deals to be done. Keep your ear peeled for these people in particular. Next, you follow through with another question. The answer to this question will give you the information you need to carefully structure the conversation to your advantage. “What do you dislike the most about short sales?”
This how you guide the meeting forward
Use the answer to structure your next response. I can’t give the exact words because I don’t know exactly how the other person will respond. But your goal with the next response is to assure them that working with you will let them keep the part that they like while discarding the part they dislike. “If I can preserve what you like – the abundance and the ability to make money, while eliminating the hassles of (insert their dislikes here) taking too long and loosing your buyer, would that interest you in learning more and maybe trying a deal between us?” You should get a “yes” or at least a continued interest to hear more. If you get a “yes” simply follow through with: “Where’s the first file?” Most likely, they’ll want to hear more about your process. This is your script: “Here’s how I work. When you present a file to me, I will immediately make a cash offer to buy the house. I also will
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow immediately begin negotiations with the lender on that file for you. You won’t have to handle the negotiations. You do your work as a real estate broker and I’ll do the rest to close the short sale.” “You are assured of earning the listing commission on the sale.” “Because you brought me the deal and have an interest in how it’s going, I’ll give you a weekly phone call or email to let you know the current status.” “Here’s all I need from you. What you Find listings that are short sales want Put them on the market from them Take extremely detailed photos of the property and if
needed the neighborhood And I need you to resell the house for me”
“That’s where you earn a second listing commission.” “Here’s what I’ll do to close the short sale deal: The benefits they get from you
Gather all of the necessary paperwork. This begins by
providing the seller with a checklist of what’s needed from them. I’ll stay in contact with the seller to get the paperwork
to me in a timely manner. I’ll enter into negotiations with the lender as soon as I
have all the paperwork. I will schedule the closing as long as you can find a buyer
that will show up prepared to close the deal.” That should keep them very interested in doing business with you. They might be a little skeptical still because you haven’t established your credibility but you have established that you know what you are doing. © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow How to Work with Accountants and Attorneys For attorneys and accountants, all they need to do is hand your card to their client when it becomes clear that is the best advice they have to give. They don’t need to answer any questions about short sales other than to refer those clients to you. In exchange for the reference, you will give the attorneys and accountants a cut of the profit you make. You need to decide how big of a cut to give them for the referral. It can be a flat fee or a percentage of your net profit. If you net Your “Assignment” for Stage #2 Write your service summary brochure to be handed out to other real estate professionals that you meet with. Use the sample that has been included to get you started. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.or/e-classes2 $35,000 after all of your expenses a 1.5% referral fee will put $525 in the pocket of the attorney or accountant. Not a bad piece of change for handing out the business card of a trusted associate.
Establishing Your Credibility Obviously it’s more difficult to establish your credibility before you have closed a short sale deal. The way to go about it is to It’s about establish yourself as part of the Seven Streams Flipping Short top training Sales Team. You just happen to be a new member of the team. and a detailed process
Explain how you’ve taken top-notch training with the specific goal to get them closed in the shortest time possible. And do them honestly and ethically to bring happy people to the closing
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow table. Describe it this way: “I have a process in place to make sure the details get handled and nothing falls through the cracks. I use checklists and procedures, not random calls to the lender asking them what the next move is. When they receive my package of information they will order the BPO and make a decision.” When a Broker Already Has a Short Sale Negotiator Don’t be You will come across brokers already in the business that are shy currently using a back office short sale negotiator. The best way because to start this conversation is with:
they are using “How is that working for you? Are they willing to make you an someone instant offer to buy the house?” else
They aren’t going to immediately admit to how bad the back office operation is. Regardless of how they answer, you can assume results of their operation are much less satisfactory than what you are offering. The back office is not making an instant offer on the house. In fact, the broker or another broker must find a buyer for the short sale. And then they hope the back office can pull off getting a “yes” from the lender. The other guys are the ones that are failing
In most cases, those back offices are taking on an avalanche of short sale cases. Way more than they can possibly manage or even hope to close. They make a few feeble attempts to gather the necessary paperwork and a few feeble attempts to get the lender to make a decision. Nothing happens and they just move on to the next opportunity. There’s nothing there to motivate them to follow through. On the other hand, you have control over the property. You have lots of skin in the game. You are fully motivated to complete every deal and collect a handsome paycheck.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow More About Using Your Presentation to Show Credibility Besides the simple handout you gave them at the beginning of the Show your meeting, the only other material to cover with a broker or anyone detailed else is your short sale package. This can be done on a laptop or short sale keep it very simple with a printed color copy. package
Open with the statement: They’ll be surprised at the detail
“Have you ever seen a short sale package like mine? This is my typical package. I don’t just submit what the lender asks for, I submit everything any lender has ever asked for and even more” “I keep a detailed master checklist of everything a lender has asked for. It doesn’t happen often but if I come across a unique request I add it to my checklist.” “No package ever gets turned in until my package is complete.” “When they see it, the short sale is immediately pre-qualified. They order their own BPO shortly after the package is received. And I help them manage that BPO to get it done right the first time.” “When I ask if you have ever seen a short sale package like mine before, I can assure you the loss mitigators never have either.” “The short sale decision always boils down to having all the information to make the sale. I give them everything they need plus more.”
How many Short Sales Have You Done? Here’s This is another opportunity to talk about the team concept. Try where to answer this question before they even ask it. Hopefully the team towards the end of your short sale package overview. concept helps
At some point you say: “You might be wondering how many short sales have been completed using this detailed short sale package. I’m part of a
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow team that has used this type of package to close literally over a thousand short sales. It’s highly effective now but still the team continues to find small ways to make it even better.” There you go, you’ve briefly walked your prospective associate all the way through your short sale process. All that’s left to do is close the deal. Your “Assignment” for Stage #3 Use the steps outlined here to strengthen your credibility. Prepare a copy of the short sale package that you will use to booster your credibility. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.or/e-classes2
Closing the Meeting By Getting a Commitment By this point you have established yourself as a short sale expert. It’s Time to Ask for Their Commitment One way to state it is: “When can I expect the first short sale from you?” Here’s another way that I prefer because it implies you’ll deliver instant solutions to their problems and it can produce instant business for you. “How many short sales do you currently have that you want handled correctly?” Always, Always Follow Up This how Once you get their commitment to work with you, it’s time to you keep prove you are as diligent as you’ve claimed. the deals flowing You do this with weekly and monthly contacts.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow If you get a short sale from them right away, of course you’re going to go to work on it immediately. It’s extremely important to follow up with that weekly status phone call or email you promised. Do it. Follow up weekly even if they don’t give you a short sale immediately. Talk to them, leave a voice message, or send an email reminding them you are there to help. “Hi Bill, I’m just calling to briefly follow up on the meeting we had last week to go over my short sale process. I simply wanted to remind you that I’m here to help you with any short sale listings you have. Remember I’ll take on the part that you dislike and get them done much faster than anyone has in the past. Talk to you soon” Nurture the Working Relationship Regularly A monthly face-to-face meeting with each of your associates does a lot to solidify your working relationship. On the first Tuesday of each month, send out an email or telephone call asking when a convenient day and time is to get together for a cup of coffee or to have lunch. “Hi Joe, I’m going to be over near your office several times next week. Is there a convenient time that we can get together for a cup of coffee?” Make it convenient for them. On their schedule At their location
Use this opportunity to drop off more business cards and brochures for them to hand out to short sale clients. This works just as well for mortgage brokers, real estate agents, and © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow attorneys. Whomever you are working with. Your “Assignment” for Stage #4 Order your business cards. Write your brochure using the sample provided as a template. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.or/e-classes2
Richard Geller Publisher, Seven Streams Flipping Short Sales MethodTM
P.S. Be sure to review all of the materials that are included with this week’s curriculum package. You should have received three other files: 1. eCourse for Flipping Short Sales Module 11 – Creating Short Sale Deal Flow 2. eCourse for Flipping Short Sales Module 11 – Sample Short Sale Service Summary 3. eCourse for Flipping Short Sales Module 11 – Sample Brochure
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Short Sale Deal Flow
Seven Streams Flipping Short Sales MethodTM Lesson #11 Checklist – Creating Short Sale Deal Flow ***This condensed version of the main lesson is for review purposes only. For an in-depth explanation of each of the items listed here, please refer to the main PDF file or the MP3 audio version.
This week we’re going to talk about: The types of professionals that regularly come into contact with people in distressed houses. People facing the very high possibility of a foreclosure that will severely damage their credit rating. In real estate it’s about location and having contacts
You will learn how to contact these professionals and work with them to steer these people in hardship through the complex short sale real estate transaction. You will be given the right tools to convince other professionals they should be working with you. When a short sale comes to them, they will turn to you.
Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow There are different categories of professionals you will work with. You will learn the correct order to bring them on board so that you immediately have deals to begin working on. Your business will be a primed pump from the start. This is called deal flow. Having your short sale business Contacts pipeline continuously filled with more deals. Every create business needs deal flow but not every business owner deal flow knows the most effective way to create deal flow especially in the short sale business.
This is how you create deal flow for short sales….. By the end of this week’s eClass, you’ll have the knowledge, tools, and skills that will have others bringing deals straight to you and they will perform much needed services. Specifically, you’ll have the following things in place… Who to contact to bring deals to you. How to find and make contact with them. Exactly what to say at each step. How to get them to say “yes” to bringing you deals. How to handle their objections.
Who to Contact and When - to Create Deal Flow There are plenty of deals to be done and more on the way. Others will bring them to you.
With billions of dollars in loans either in or headed to foreclosure, getting short sale deals is not difficult. If you’re good at completing short sales it’s going to be simple to find more deals than you can handle. In fact I recently learned of one loss mitigator that periodically calls trusted real estate investors when he has a potential short sale in that investor’s geographic region. What could possibly motivate a loss mitigator to ask for an investor’s help? It’s easy…. when the loss mitigator works with the right investor he knows he’ll receive a complete package to complete the short sale. Amazingly, the lenders are now seeking out short sale
© 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
2
Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow opportunities! So who’s going to bring these deals to you. These are the people you want to contact: Real estate agents and brokers The people Mortgage brokers and agents you want on your Other investors team Attorneys and accountants Others
A Brief Look at Who You Are Seeking Out Some of the people you will learn about in this lesson can bring you deals immediately while others will fill the pipeline and bring deals over time. Real estate agents and brokers belong in the first group, those For immediate that can bring deals to you immediately. results Mortgage brokers and agents can’t necessarily bring you deal flow today. They are being contacted by people not yet ready to sell their home. People still hoping to restructure their loan to stay in the house. But mortgage agents and brokers will bring deals when many of these clients realize they have no refinance options. Other investors are doing the same thing or something similar as you. With the hundreds of thousands and soon to be millions of possible deals, there is no reason to think of these people as competitors. Instead, look for ways to work with them. Look for ways to work with them to complete more deals. Compliment what they are doing or find specific projects to work on with them. Cooperate instead of competing. A lot of people trying to complete short sales don’t understand how to negotiate or complete a deal. They have a lot of leads but © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow close few deals. For these investors, you can offer to give a small percentage of your net profit in exchange for referring leads to you that they’ll never complete a deal for anyway. You’ll have a much higher rate of success based on your knowledge from the Seven Streams Flipping Short Sales MethodTM. A small percentage of something is always better than 100% of nothing. They will give you deals. Having seven potential income streams makes it easy for you to create an equitable position in almost any short sale. In almost every case, other investors will get more from the seven streams version than if they had been able to pull off the deal themselves. A bigger pie to split. Attorneys and accountants. People often turn to these people when they are in financial trouble. Specifically, you are looking for: Real estate attorneys Bankruptcy attorneys And to some extent probate attorneys Any contact that deals with people having money trouble can be a source
Anyone that regularly has contact with people in financial trouble. This can include attorneys that set up corporations and limited liability companies for small business owners. Most small businesses fail within two years and they know who is about to fail now. Attorneys that handle probate often become involved with real estate deals. People inherit a property they don’t want to mange. They certainly won’t want to make mortgage payments if the house is up side down as so many are in today’s world. How to Find These People The first ones you want to contact are real estate agents and brokers. Pick up those free real estate listing booklets you see around town. Sometimes they are near the doorways of stores.
© 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Sometimes they are with newspaper stands. Look for listings that are “contingent on 3rd party approval”. Look for agents that run these ads in the listing booklets. You can go to Realtor.com. Type in your city and state to find a long list of realtors in your area. There are many places you can find these people
Call a few local real estate offices and ask if anyone in the office specializes in short sales. Tell them you are a real estate investor. A cash buyer. Hunt out mortgage companies that are advertising to distressed homeowners. Mortgage brokers are doing loan modifications but not all of their clients qualify. Call companies offering to buy “ugly” and “no equity” houses. You’ll often find these on bandit signs stuck up in high traffic areas. Look in newspaper classified ads for the same thing. And for rehabbers. Whenever you talk to someone, especially those that can’t or won’t work with you, ask them for a referral to someone that might. Next is the Face-to-Face Meeting Once you have found someone that you want to work with, schedule a face-to-face meeting with them. Do it at their office, your home, or Starbucks but make it a face-to-face meeting. A face-to-face meeting: Gives you a much higher chance of becoming a memory in
the person’s mind than a telephone call does. It demonstrates a strong work ethic. It’s a higher commitment level. It begins building a relationship.
You can use meetup.com to find local real estate meetings. Take the time to meet the presenter and those asking questions. These © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
5
Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow are hard working professionals. Something similar is REIT or Real Estate Investors Association. Easy Tip: What you want to do here is use the people multiplier. Get in front of as many people as possible that know as many people as possible. Simply type REIA [your location] into Google and you should find local meetings. Another way is to go to open houses on Sundays. You can easily meet 7 or 8 real estate agents there.
Your “Assignment” for Stage #1 Start trying several of the ways you’ve learned to begin meeting real estate professionals in your town or region. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.or/e-classes2
What to Say and Do at the Meeting What you’re after in the beginning is to build a network of people needing your short sale or loan modification services. Only after you establish your network is it worth direct marketing your services to homeowners facing foreclosure. The Chance Meeting –v- An Appointment Sunday open houses and the real estate investment meetings are great places to meet someone and shake their hand. But you aren’t likely to do any serious business at those places. The end goal of these meetings is to set up a future appointment © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
6
Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow for a one–on-one meeting. You want to sit down for a cup of coffee or meal to discuss possible future business relationships. If you can’t accomplish setting up an appointment, at least build rapport so that a future face-to-face can be scheduled. Your Script to Getting the First Meeting Appointment Here is the exact script that I suggest you use to set up the faceto-face appointment. “I’d like to set up a 30 – 45 minute meeting with you to discuss what I can do to help you make money with short sales.” When others have a short sale negotiator
Since you’re seeking out people familiar with the short sale process, you’re likely to run into people that are already using a short sale negotiator. Some back office operation that collects a fee but rarely closes a deal. They don’t actively pursue putting a complete package together. Instead, they collect whatever information the seller can quickly and easily provide and send off a package to the lender that falls well short of what the lender needs to make a decision. Certainly, they don’t make the effort to document all of the short comings of the house and neighborhood. There won’t be any equity in the deal to motivate them to complete the deal. At best it will languish in a stack of paperwork until the lender forecloses or caves in to a poorly designed short sale if a buyer will hang around that long.
You will increase the number of profitable short sale they close
When your prospective team member says they are already working with a short sale negotiator, here is your response: “I’d like to meet with you to discuss how we can work together to increase the number of short sales we can complete.” Your emphasis is on increasing the number that you will complete for the team. Getting the Most From the First Meeting
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Come prepared with a brochure or printout of some kind. Something you can leave with the other person. Basically a summary of what you think you can do to help the other person’s business. It’s about benefits for them. A short introduction of yourself and the mission of your
business. What the business relationship with others might look
like. Emphasize the benefits to your prospective team
member. Include the benefits that all will receive – buyers, sellers,
the lender, your self. I’ve included a sample of a service summary as a separate file. You can use it as a beginning to write your own. The First Few Minutes of the Meeting During the opening moments of the meeting you’ll gage how social the person is. A highly social person will want to get to know quite a bit about you during the introduction. A work focused person will want to get right down to business. Most people will fall in between. Once you get down to business, your opening line should be something like: “What I’m going to show you today is a different way to do short sales. Not the typical way most people are doing them. And it’s been highly successful compared to the way others are doing it.” The best way to control a conversation is by asking questions. Questions steer the conversation onto the topics that you want to discuss. After the brief opening statement above, follow up with a question: “What do you like most about short sales?” © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Assuming the person is knowledgeable about short sales, you can expect one of three answers: 1. The money 2. The abundance of deals that can be done 3. Or a combination of both of the above – the money and abundance This one will be a star on your team
The bright ones will give you answer 3. Both the money and abundance of deals to be done. Keep your ear peeled for these people in particular. Next, you follow through with another question. The answer to this question will give you the information you need to carefully structure the conversation to your advantage. “What do you dislike the most about short sales?”
This how you guide the meeting forward
Use the answer to structure your next response. I can’t give the exact words because I don’t know exactly how the other person will respond. But your goal with the next response is to assure them that working with you will let them keep the part that they like while discarding the part they dislike. “If I can preserve what you like – the abundance and the ability to make money, while eliminating the hassles of (insert their dislikes here) taking too long and loosing your buyer, would that interest you in learning more and maybe trying a deal between us?” You should get a “yes” or at least a continued interest to hear more. If you get a “yes” simply follow through with: “Where’s the first file?” Most likely, they’ll want to hear more about your process. This is your script: “Here’s how I work. When you present a file to me, I will immediately make a cash offer to buy the house. I also will
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow immediately begin negotiations with the lender on that file for you. You won’t have to handle the negotiations. You do your work as a real estate broker and I’ll do the rest to close the short sale.” “You are assured of earning the listing commission on the sale.” “Because you brought me the deal and have an interest in how it’s going, I’ll give you a weekly phone call or email to let you know the current status.” “Here’s all I need from you. What you Find listings that are short sales want Put them on the market from them Take extremely detailed photos of the property and if
needed the neighborhood And I need you to resell the house for me”
“That’s where you earn a second listing commission.” “Here’s what I’ll do to close the short sale deal: The benefits they get from you
Gather all of the necessary paperwork. This begins by
providing the seller with a checklist of what’s needed from them. I’ll stay in contact with the seller to get the paperwork
to me in a timely manner. I’ll enter into negotiations with the lender as soon as I
have all the paperwork. I will schedule the closing as long as you can find a buyer
that will show up prepared to close the deal.” That should keep them very interested in doing business with you. They might be a little skeptical still because you haven’t established your credibility but you have established that you know what you are doing. © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow How to Work with Accountants and Attorneys For attorneys and accountants, all they need to do is hand your card to their client when it becomes clear that is the best advice they have to give. They don’t need to answer any questions about short sales other than to refer those clients to you. In exchange for the reference, you will give the attorneys and accountants a cut of the profit you make. You need to decide how big of a cut to give them for the referral. It can be a flat fee or a percentage of your net profit. If you net Your “Assignment” for Stage #2 Write your service summary brochure to be handed out to other real estate professionals that you meet with. Use the sample that has been included to get you started. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.or/e-classes2 $35,000 after all of your expenses a 1.5% referral fee will put $525 in the pocket of the attorney or accountant. Not a bad piece of change for handing out the business card of a trusted associate.
Establishing Your Credibility Obviously it’s more difficult to establish your credibility before you have closed a short sale deal. The way to go about it is to It’s about establish yourself as part of the Seven Streams Flipping Short top training Sales Team. You just happen to be a new member of the team. and a detailed process
Explain how you’ve taken top-notch training with the specific goal to get them closed in the shortest time possible. And do them honestly and ethically to bring happy people to the closing
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow table. Describe it this way: “I have a process in place to make sure the details get handled and nothing falls through the cracks. I use checklists and procedures, not random calls to the lender asking them what the next move is. When they receive my package of information they will order the BPO and make a decision.” When a Broker Already Has a Short Sale Negotiator Don’t be You will come across brokers already in the business that are shy currently using a back office short sale negotiator. The best way because to start this conversation is with:
they are using “How is that working for you? Are they willing to make you an someone instant offer to buy the house?” else
They aren’t going to immediately admit to how bad the back office operation is. Regardless of how they answer, you can assume results of their operation are much less satisfactory than what you are offering. The back office is not making an instant offer on the house. In fact, the broker or another broker must find a buyer for the short sale. And then they hope the back office can pull off getting a “yes” from the lender. The other guys are the ones that are failing
In most cases, those back offices are taking on an avalanche of short sale cases. Way more than they can possibly manage or even hope to close. They make a few feeble attempts to gather the necessary paperwork and a few feeble attempts to get the lender to make a decision. Nothing happens and they just move on to the next opportunity. There’s nothing there to motivate them to follow through. On the other hand, you have control over the property. You have lots of skin in the game. You are fully motivated to complete every deal and collect a handsome paycheck.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow More About Using Your Presentation to Show Credibility Besides the simple handout you gave them at the beginning of the Show your meeting, the only other material to cover with a broker or anyone detailed else is your short sale package. This can be done on a laptop or short sale keep it very simple with a printed color copy. package
Open with the statement: They’ll be surprised at the detail
“Have you ever seen a short sale package like mine? This is my typical package. I don’t just submit what the lender asks for, I submit everything any lender has ever asked for and even more” “I keep a detailed master checklist of everything a lender has asked for. It doesn’t happen often but if I come across a unique request I add it to my checklist.” “No package ever gets turned in until my package is complete.” “When they see it, the short sale is immediately pre-qualified. They order their own BPO shortly after the package is received. And I help them manage that BPO to get it done right the first time.” “When I ask if you have ever seen a short sale package like mine before, I can assure you the loss mitigators never have either.” “The short sale decision always boils down to having all the information to make the sale. I give them everything they need plus more.”
How many Short Sales Have You Done? Here’s This is another opportunity to talk about the team concept. Try where to answer this question before they even ask it. Hopefully the team towards the end of your short sale package overview. concept helps
At some point you say: “You might be wondering how many short sales have been completed using this detailed short sale package. I’m part of a
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow team that has used this type of package to close literally over a thousand short sales. It’s highly effective now but still the team continues to find small ways to make it even better.” There you go, you’ve briefly walked your prospective associate all the way through your short sale process. All that’s left to do is close the deal. Your “Assignment” for Stage #3 Use the steps outlined here to strengthen your credibility. Prepare a copy of the short sale package that you will use to booster your credibility. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.or/e-classes2
Closing the Meeting By Getting a Commitment By this point you have established yourself as a short sale expert. It’s Time to Ask for Their Commitment One way to state it is: “When can I expect the first short sale from you?” Here’s another way that I prefer because it implies you’ll deliver instant solutions to their problems and it can produce instant business for you. “How many short sales do you currently have that you want handled correctly?” Always, Always Follow Up This how Once you get their commitment to work with you, it’s time to you keep prove you are as diligent as you’ve claimed. the deals flowing You do this with weekly and monthly contacts.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow If you get a short sale from them right away, of course you’re going to go to work on it immediately. It’s extremely important to follow up with that weekly status phone call or email you promised. Do it. Follow up weekly even if they don’t give you a short sale immediately. Talk to them, leave a voice message, or send an email reminding them you are there to help. “Hi Bill, I’m just calling to briefly follow up on the meeting we had last week to go over my short sale process. I simply wanted to remind you that I’m here to help you with any short sale listings you have. Remember I’ll take on the part that you dislike and get them done much faster than anyone has in the past. Talk to you soon” Nurture the Working Relationship Regularly A monthly face-to-face meeting with each of your associates does a lot to solidify your working relationship. On the first Tuesday of each month, send out an email or telephone call asking when a convenient day and time is to get together for a cup of coffee or to have lunch. “Hi Joe, I’m going to be over near your office several times next week. Is there a convenient time that we can get together for a cup of coffee?” Make it convenient for them. On their schedule At their location
Use this opportunity to drop off more business cards and brochures for them to hand out to short sale clients. This works just as well for mortgage brokers, real estate agents, and © 2009 SevenStreamsFlipping.org. All rights reserved. www.sevenstreamsflipping.org
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow attorneys. Whomever you are working with. Your “Assignment” for Stage #4 Order your business cards. Write your brochure using the sample provided as a template. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.or/e-classes2
Richard Geller Publisher, Seven Streams Flipping Short Sales MethodTM
P.S. Be sure to review all of the materials that are included with this week’s curriculum package. You should have received three other files: 1. eCourse for Flipping Short Sales Module 11 – Creating Short Sale Deal Flow 2. eCourse for Flipping Short Sales Module 11 – Sample Short Sale Service Summary 3. eCourse for Flipping Short Sales Module 11 – Sample Brochure
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