How To Make Knockout Offers!
I am talking about knocking out your competition, getting them out of the conversation, removing them from being in competition with this motivated seller, right. So this is what I want to show you of how I did this for over 14 years right there in Phoenix, Arizona, as is probably one of the most competitive real estate markets out there. I think all of you would agree. I now live in Miami. And so this is also one of the most competitive markets, but the way I construct my offers is very intentional, right? So for all of you who have not heard me say this, I am going to continue telling you these things.
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There are three main pillars to your success, right in all of what you do in real estate, right. First is your commitment level you need to be 100%. And absolutely committed to winning to is your intentions. What are your intentions, your words need to line up with your actions, make sure everything you are doing has intent behind it. And number three, is take action take massive action all the time. I for all my students who are watching people know that I’m all about taking imperfect action. Imperfect Action will lead to results. Now here’s the thing, results may not always mean you get the deal you make your first check are you get the deal and make a check. It means that you’re making progress, you’re not just sitting on the sidelines getting ready to get ready. That is predominantly the issue in our space as someone who has been educating now for the better part of almost 10 years. What I see all the time is people that get ready to get ready. So when they’re ready, they can be ready getting ready. That doesn’t work, right, you need to get in to the pool, you need to jump into the deep end, you need to get on the field, you need to put your helmet on, put your shoulder pads on and get going. Right. So what I’m going to try to do for all of you is make sure you are committed, make sure you have intention and make sure your action is directed in the right way. So here we are, we’re gonna talk about constructing a knockout offer. Now, the key to this is actually making the offer everybody not verbally saying where you might be at if you are around, you know, a certain number will that work that’s not an offer, I quite literally mean put pen to paper, either hand, deliver it to them, DocuSign it to them, make sure they are receiving it. Right that is a real offer. Now, again, after 14 years of doing this in almost 2000 deals, I have tried every single way to get the edge on my competition. I’ve tried to do everything I possibly can. And this is always been one of the best ways to remove the clutter to remove your competition. So out of curiosity, those that are watching live right now on this training, who here is a new ish investor, maybe not a newbie, maybe done a couple of deals, but new ish, right? We’d love to see who out there is a new ish investor. And the reason why I’m saying that is the predominant marketplace in all markets tends to be newer investors, the seasoned veterans like myself and others, they’re there, they’re still there, they just tend to be a little bit more quiet, right? We’re not quite as much in to all the Facebook groups and making loud noises, we’re just buying we’re plucking the deals down as we know how to write. So for some of you, you’re trying to figure out how to even get your first deal and that’s totally fine for others on here. Since there was only a handful of newish people, for others on here, you’re trying to find it, find a way to remove your competition. So you can start doing 10 or 20 deals a month every month in a consistent fashion right? So if you’re that person this this training speaks to you as well right. So, now while understanding how to negotiate and understanding how to persuade and understanding how to, you know, get a seller down from an ear, ear, irrational number right, which is, in large part our issue right now, when you all agree in large part sellers want too high of a number. Right the market has been on fire for over a decade. Employment is incredibly good. There’s nothing else on the market. So sellers realize that it’s not, it shouldn’t be shocking to all of you. That you, me, and everyone here on this training is dealing with sellers who want numbers that are not rational, right? They’re just making it up. They’re just trying to see if they can get some, some number or maybe it’s rational. If they put 5060 $70,000 into their own rehab, maybe then it would be a reasonable number. But right now they can’t. And when you or I, or anyone asked them, hey, why don’t you do the remodel? They usually will say, Well, I’m really not that interested in selling. Or they will say, I don’t have the money.
Now, well, most new investors really focus on offer price offer price, I need to get them super low, I need to get them lower than that I got to negotiate on price. What I’ll tell you is that’s mostly not the right way to negotiate. And here’s what I want to do to you. For you guys. I want you to give away something if you stay to the very end, I’m going to give away a free hour training with me specifically. I think next week, I think we found a calendar time, if you stay to the end, I’m going to give away a free hour training on how I negotiate with the seller. And my four step strategy, negotiate with the seller. So I’m going to give that away to those that take action on this call. Say I only like to help action takers, I’ve told I’ve coached 1000s of people. And I only want to coach action takers. So if you are an action taker, you genuinely are, let me know, raise your hand say what’s up, just let me know you’re an action taker. Because here’s what I’m going to do. I’m going to teach you how to construct this offer. But it does no good for those that don’t take action. So if you’re an action taker, let me know. Okay, so this training is going to be maybe another 15 minutes or so. And then for those that take action, I’m going to give you another hour training on how I’ve used my four step strategy to negotiate with sellers. Cool. So when making an offer newbies typically just go price, price, price price price, while yes, you know, sellers want to make as much money as possible, you want to buy it for as little as possible. So it tends to be the the focus, I guess you could say, it’s not always what the seller values, the seller of values, getting the deal done. The seller values maybe moving the seller values finding another place to live the seller values. Something else besides money now, yes, everyone’s involved in the transaction for money. I’m not denying that but more often than not, there’s a value that you need to align yourself with. That you’re not doing if you’re just focusing on the number number number number and trying to negotiate against the number. Okay. So here’s what I have found in the Phoenix market. Most people struggle with who here is getting into wholesaling because it is well known that wholesaling you don’t need any of your cash, you don’t need any of your own credit, and you can do deals make money and flourish who here is knowing that that’s why they’re getting into wholesaling. Right? Who here isn’t fixing flipping because they think they need their own cash and credit. Okay, me me. Yes, yes. Got it. So what I’ll tell you is I’ve done almost 600 rehab flips, rehab flips, bought it, remodel, it sold it. And roughly 85 to 90% of those rehab flips, I didn’t use a single dollar of my own. In 2021, I bought 14 rental properties. 14. I bought them, I remodeled them, I rented them I refinanced it’s called the burr method. Out of all 14 I didn’t use one of my own dollars. I bring that and I highlight that here on this training for you guys. Because the most important thing I can help you mentally understand is you never need your own cash or your own credit ever. So while I love wholesaling and I’m currently wholesaling anywhere from 10 to 20 deals a month across the nation.
And I’ve done roughly 600 rehab flips and even last year alone I bought 14 rentals even though I’m doing all this none of it needed my own money or my own credit. So I want you to reframe that in your head. While I love wholesaling you absolutely can become a fixin flipper right now today if you have no money, no credit, you absolutely can go buy rentals if you have no money and no credit if anyone tells you otherwise. They are incorrect because I’m literally doing it right now. Real Time. Okay, so we need to fix what you think is reality. Right? So let’s start there. So one way that I’ve been able to understand this is I realized, okay, if a if a seller is talking to three or four or five investors, they’re in Arizona and Phoenix, I’m one of them. Everyone’s trying to figure out how we can get that seller to sign. How do we make my offer without overpaying the offer they accept. Now, some shady individuals out there, they will intentionally make an offer price that is way higher than they ever intend on doing. And then try to back the seller down to a reasonable number or back out of the deal. I hate those type of people. That is not the business model. Right. But that’s what they do. And they give us a bad name for doing it. So I would never suggest you do that. But I need to figure out I have three competitors. In this example. I’m one with three other investors in Phoenix, Arizona, I need to figure out how to get my offer accepted and get all the other competition out of the way. Well, most wholesalers have learned somewhere along the line that you don’t have to, you know, or a better way to say is you can open up escrow with a $10 earnest money deposit, or $50 earnest money deposit or $100 earnest money deposit. While it’s technically completely true, you absolutely can. That actually is what makes the contract in escrow legally binding is an exchange of cash, essentially. But if I have three other individuals that I’m going up against in Phoenix, and let’s just say all of them put down their offer number, and maybe they offer $5,000 more than me, and they put $100 earnest money deposit down. And I come in and offer $5,000 less, but I put $1,000 earnest money deposit down whose offer looks stronger? Who looks more serious? What happens if my competitors offer $10,000? More than me? And by the way, not in every scenario, I would know this, I’m just using this as an example because we all know the competition is going to keep upping their price, right? Because there’s competition. But what if they’re $10,000 more than me, but I give them a $5,000 earnest money deposit, and they’re giving $100 Whose offer looks more serious. You got to remember, some of the philosophy I need you to truly buy into commit to and have intention behind is this this idea that price isn’t always what the seller is looking for. It is not. It is the value that you are providing. And for most sellers, they want to make sure that the transaction goes smoothly, and it actually closes. Right They want to feel secure in the transaction. Well, who is making that seller feel more secure the three other individuals who gave $100 earnest money deposit or the person that gave a 3000 or 5000 or maybe even a $10,000 earnest money deposit? Now before all of you freak out and say Justin, I got into this wholesaling business because I didn’t need any of my own cash and I don’t have that kind of money and only you could do that Justin or only, you know, the, you know, veterans or rich people can do that. absolutely incorrect. What did I just tell you about all real estate investing, wholesaling, fixing, flipping, buying and holding short term rentals , you name it, what did I just tell you? You do not need your own money. Do you guys believe that? Let me know you guys actually believe that? Or do you just think I’m just up here wasting my breath?
Have you guys heard of OPM? Other People’s Money? Do you think these developers that build skyscrapers in downtown San Francisco, New York and Chicago and Miami, do you think they just happen to have 10s and hundreds of millions of dollars of their own capital to develop these skyscrapers? Do you think that’s how that works? Because you’re incorrect. You need to buy into the philosophy
that you always want to be using other people’s money. And that includes earnest money deposits. So before you guys get all like Justin, I don’t have it or, you know, I only have 1000 How’s that going to help me? Well, first of all, it’s 1000 More than the competition in the example I’m giving you, okay? But I’ll tell you, there is a resource out there that you can use right now, to go get business credit and personal credit. And it’s a line of credit. If a line of credit would help you in business and personally, let me know. throw your hand up, say yes say hell yes, absolutely. I need business credit. I need personal credit, because there is a resource out there Are the I use my students use that offers lines of credit to businesses and people. And by the way, and I’m going to give this to you for absolutely free, right? I told you there’s nothing so I’m just going to give you the resource. Because the way I structure my offer, is I go much heavier on the earnest money deposit than all of my competition. So if you can use a line of credit, personally or a line of credit for your business, say yes to Hell Yes. Say I’m in I need that. Let me know because I’m gonna give it to you. I’m going to give you that resource. But here’s the deal. That only helps you if you’re gonna take action. Do you remember the three pillars? Right si Ay ay ay saw someone make that common commitment intention in action, si ay ay, let’s go commit to being successful have intention behind what you say and what you do and take massive action. So I’m only going to deal with action takers, period and the story.
If you’re not an action taker, then I’m not going to work with you, go get your line of credit, go get your business line of credit, and set up a completely complimentary call, with my guys over at prime Corporate Services, go to https://www.primecorporateservices.com/tsof some of you may already have booked a call, maybe you’ve seen me talk about this before. But I’m not willing to give away my time for absolutely free. For those who aren’t willing to take action to better their business, I’m just not willing to do it. But if you want to beat your competition, and you believe in other people’s money, you really believe in that philosophy, you understand that the big developers in downtown Miami, downtown San Francisco, Chicago, New York, they don’t use their own money, they borrow other people’s money, they use credit, they get a line of credit, if you believe that, then you are gonna go get a line of credit for yourself and a business line of credit at prime corporate services.com forward slash PSLF. If you want to win, start looking for other people’s money, the very best way to do it, where I do it when my students do it, is to get a business line of credit and get a personal line of credit. Even if you get a line of credit for 1000 2000 3000, which isn’t life changing. It’s not meant to pay your bills or to buy a home. It’s meant to help you make these offers that I’ve labeled knockout offers so that you when you go against two or three other investors and you have a $3,000 earnest money deposit, and they all have $50 you get the deal because you look more serious, the perception of that is more serious, you’re gonna have to stroke a $3,000 check to title to open up escrow, guess where you’re getting it from your business line of credit.
It’s not your money, you don’t need it. I’ve already told you use other people’s money, even if you have to book a call out towards the middle or end of this month. Who cares? Guys? Who cares? Start making progress. You’re not in this business for 30 days, you’re in this business for 30 years, right? These guys are going to help you get business lines of credit. These guys are going to help you structure knockout offers, you should never be using your own money. Who agrees? If I have a million dollars in cash right now, why would I be using my own money when I can go borrow it for four or 5%. So when you get a business line of credit, and you can put $1,000 earnest money deposit down to 2000 or 3000. Guys I have done in this is extreme, I get that I’ve done a $10,000 non refundable earnest money deposit, because I knew I had competition on the deal. And I knew the deal was a great deal.
I’m not telling you, you guys need to do that. That is excessive. I understand that. But what I’m telling you is take this business seriously, commit, have intention and take action. Make sure your action has intention behind it. Your intention is to get deals done right. Your intention is to get more sellers to agree to your offer. That is your intention. Well, if you have that intention, go take the proper action and go get money with a business line of credit or a personal line of credit. Who cares when they can book your call. I don’t care if it’s mid April and April May book the call. You’re not in this business for 30 days. You’re in it for 30 years, guys, don’t be short sighted. Make sure you book so again, the way you beat your competition is make your offer irresistible. Make it look so good to the seller that they have to take yours over your competition. And the best way I know how to do that is to make sure that earnest money deposit makes your offer look serious. They’re not wavering like okay $50 earnest money deposit. That seems weird All right, because that’s what’s going through their head. Like that’s not enough money. Make it 1000 Make it 2000 3000 5000 10,000 20,000. I literally just heard from Prime the company that I’m telling you to go get business lines of credit from the reason why? Well, I should say this, I talked to him letting them know, Hey, I’m going to do this free training, I’m going to mention you guys, because I want these people to get business lines of credit so they can make better offers. And he said, Good idea, because we just had one of your students get $150,000 line of credit $150,000 line of credit. And by the way, just so we’re all clear, you do not need great credit to get this. You can’t have no credit. No credit is the worst amount of credit you can get. Bad Credit is better than no credit. But you don’t need a 700 credit score to get a business line of credit. They may not give you much, they might only give you 1000 bucks, maybe 2000, maybe 3000. But what did I just tell you, if all your competition is making $50 or $100, or $200, earnest money deposits and you do 1000? Who looks more serious. So here’s this that’s the training, make your earnest money deposit speak for your offer. And the better the deal, the more you should put in earnest money deposit. Again, I told you I did a $10,000 non refundable, earnest money deposit that is very extreme, I understand that. But the reality is I have the cash, I have so many different lenders constantly offering me business loans, I literally just got one for $750,000. Now, that’s their little marketing, like you’re guaranteed for $750,000. Even if I got 100 grand out of that, right other people’s money. So don’t be short, sighted, go get other people’s money. It’s everywhere. In this scenario, you do not need great credit you do not just get on a complimentary call with them and talk about it.
Talk about where you’re at what you can qualify for, they will literally just walk you through that process. And then when I call them next week, to say, hey, who who registered for your call those people. I’m going to give you an hour of training based around my four step strategy to negotiate with homeowners. All right, y’all. That was your knockout offer. Training, earnest money deposit is way more important than you realize, because you’re going against people like me that have the capital to do it. So don’t be the person that offers $25 or $50 or $100 earnest money deposit, be the person offers 1000 3000 5000 10,000 20,000 irrelevant, like, get the deal. Because the only way to get a deal is by making offers. So if you’re gonna make offers, make it so they can be accepted. Make it so the seller will accept your offer. That’s why you’re in the game commit. have intention. Take action. I’ll see you guys on the free training. Again, prime corporate services.com forward slash gsls Book your call. And I’ll see you guys on the training regarding how to best negotiate with sellers my four step strategy. Have a great weekend guys. Peace