My FSBO script for lease option prop? - Posted by Parag Shah

import · February 24, 2003, 10:09pm

Posted by Jim FL on February 26, 2003 at 21:45:55:

rm,
Sure, I’ll respond.

You asked:
“Do you have a system in place to track exactly where your calls are coming from?”

REPLY: Yes, when calls come in, I have a sheet that we complete with info, and on that, one of the questions is, “How did they find us?”.
This info is kept, and every 30 days or so, I now take all of that and put it together.
I date the calls as well, so I can not only determine which marketing methods brought in the most leads, but what seems to be the most effective on certain days of the week, days of the month etc.
I also keep track of when new marketing materials have been place out.
This way, should I see a spike in calls, or a lull, I can see what effect if any a new marketing blitz has had.

You then asked:
“The reason I ask is that I have found that the Pareto Principle absolutely holds true in marketing- 80% of your results are derived from 20% of your efforts.”

REPLY:
I do not agree, and this is because I’ve marketed long enough, that I’ve already determined what works best for me, and when. So, I naturally focus on this, and would venture to guess that most of my marketing DOES get leads, and that the method I use most, gets the most time devoted to it, because it works the best.

You then asked:
“Because you seem so focused on the type of situation you’re looking for, I’m wondering if you tracked your results a little more closely, if you’d suddenly discover that you could re-arrange your marketing mix so you’re attracting more of the type of deals you want.”

REPLY:
I am not really focused on any particular type of deal, other than wanting to make sure I buy with a lot of equity.
I do some targeted marketing, but most of mine is admittedly a shotgun approach, such as signs, flyers, ads in papers, menus etc.
I try to get my message in front of everyone, not just those in certain situations.
If someone NEEDS to sell their house, it is not hard to find me.

You said/asked:
"Some of the things I was thinking you might look at are:

-exactly where are your calls coming from?"

REPLY:
I do that, and my leads come from all forms of my marketing, there is not one single thing I do that fails to bring in leads.
There are of course those methods, like bandit signs, which bring in more leads than the other methods combined.
But, I try to do as much marketing as possible, because this helps get me recognition and allows my message to be one the sellers will call because they have seen it around a while, and all over the place.

You then asked:
“-exactly where are your “perfect” or “ideal” prospects coming from?”

REPLY:
The best deals come from truly motivated sellers, and they call when ever they are READY to sell NOW, and see my message.
Most often that is from signs, but mailers, flyers, and business cards run second, a far distant second, with my vehicle signs and clothing items taking third.
The ads are fourth, with leads coming in steady, but slow.

You then asked:
“-do you have a method that’s generating deals that you might have done 5 years ago, but don’t want to bother with now?”

REPLY:
No, there really is not a method that brings in deals I would have done 5 years ago, but not now exclusively.
Those types of deals come in all the time.
As for knowing who to sell the deals to, if there is a deal to be had, I’ll keep it.
Skinny deals are not something I’ll flip to another investor.
The only people I know now who would take them are newbies, and honestly, I prefer to not pass a skinny deal on to a newbie who might not be able to handle it.

You asked/said:
“-what plan do you have in place to refer those deals to someone else, so you make money without even having to meet with the sellers?”

REPLY:
If a deal comes up that I don’t want, and has plenty of profit, then I just call local investors I know and assign it to them.
I network with people all the time, so finding someone to flip deals to is not a problem.

HTH,
Jim FL

import · February 24, 2003, 10:09pm

My FSBO script for lease option prop? - Posted by Parag Shah

Posted by Parag Shah on February 24, 2003 at 23:09:44:

I have been told me to call FSBO and For Rent ads to find lease option properties. I was wondering if you guys could critique my script for FSBOs and For Rent calls.

Here is how it goes.

Hi my name is Parag. I am calling about your ad from the For Sale By Owner publication and I was wondering if you would consider selling your house on a lease purchase.

A few of them said what is a lease purchase or what do I mean by a lease purchase? I said “it is a lease agreement with an option to purchase”

Before that I was trying to say the benefits that you dont have to pay realtors commission costs and I guarantee in writing that you will get your monthly payments. And you dont have to pay closing costs.

WHat I have been encountering is that people prefer to get it sold right away or cashout right a way. I am in a hot market right now. It is a sellers market and I am wondering if i can find motivated sellers in this market.

I have been told by a mortgate sales manager in this market you are not going to find anybody that would be willing to lease option there property whereas in a buyers market you can.

Could my script be better? Is the FSBO and For Rent a good target for lease option properties?

I must say I do get a better response rate from my FSBO calls than my cold calls as a realtor. I mean when I have had some people call me back when I have made 10 to 15 calls. Whereas I make about hundreds to close to a thousand cold calls as a realtor and for all the messages I left on the answering machine, I have not had one person call me back.

Any help would be appreciated.

Parag

import · February 25, 2003, 6:37am

Oh my… - Posted by Steve (Atl)

Posted by Steve (Atl) on February 25, 2003 at 07:37:34:

You are in trouble from your first question. To be honest, that is as far as I got. The average Joe is not going to understand these terminologies on lease option, lease with an option to purchase, etc, etc, etc and no amount of explanation over the phone is going to suffice to them. You need to get them to do all of the talking. It is your job to sit back and listen. Do me afavor, do a search on Joe Kaiser. I know here recently he submitted an excellent post on how to communicate with the seller. That is exactly what you need to do. Establish a line of communication. If you are reading from a script, that will be exactly how it will sound. You need to communicate; better yet, you need to listen. If you are talking, then you are not listening.

Gdod Luck

import · February 25, 2003, 1:07am

An uphill battle…(LONG) - Posted by Jim FL

Posted by Jim FL on February 25, 2003 at 02:07:49:

Parag,
With your methodolgy and the script, in my opinion, you are creating an uphill battle for yourself.

Let me tell you first, that cold calls are something I HATE!
I do not make them any more and have not for years.
I do contact FSBO’s and FRBO’s, but thru the mail.
If they are motivated, or want to know more, they call me.
Then I’ve not wasted time talking to sellers who are probably not motivated, my chances are better.

I prefer to market so that sellers call me.
If you do a search here in the archives, as well as read the articles here, there are TONS of ways to make your phone ring.

Now, with that said, no matter whether a seller has called me, or I call them, the script you use in my opinion is a set up toward failure.
You are too blunt, and don’t gather nearly enough information, or get to know the seller well enough to even make an appointment, let alone an offer.
Don’t take that as harsh, we all learned as we went, and perhaps sharing some of that here will help save you some time and aggravation.
Anyway,
My mission when talking to a seller is to determine whether they are motivated or not?
In order to do that, I need to listen to them, figure out what makes them tick, and get to know them.
A relationship needs to be developed.
This cannot be done effectively over the phone in my opinion, at least, not very often resulting in a deal.
Face to face is where the action is.
So, your job on the phone is to gather info, and determine if there is a good chance the seller is motivated and perhaps why?

I’ll lay out a simple short sample phone call here for you, if you don’t mind.
Keep in mind here, the seller is calling me, but you can use some of this in your cold calls.

Ring
Me: We Buy Homes, how can I help you?

Seller: Yes, I saw your advertisement, saying you buy houses? I want to sell my house. How does this work?

Me: Well, in a nut shell, I buy houses, it really is that simple. Why don’t you tell me about your house, and I’ll gather some information from you if you have a few moments. I will not waste your time, so after we do that, I will determine whether or not it looks like there is something we can do for you. If it does, we can schedule an appointment to inspect your house and talk a little. Does that sound good?

Seller: Sure, what do you want to know?

Me: Well, first, let me introduce myself, my name is Jim. What is yours?

Seller: Sally.

Me: Sally, nice to meet you. Can you tell me about your house, you know, bedrooms, bathroom, describe what you see when you look around.

Seller: Sure, it is a 3 bedroom, 2 bath, brick 1 story 1500 sq/ft house. We have a deck, a 2 car garage, a shed, and landscaping, as well as custom decorating in the great room.

>>>>>>>Here we just ask questions about the house, things we’d like to know, and things to just keep the seller talking, and getting comfortable talking with us.<<<<<<<<<

After the seller describes the house, I will then say something like this:
Me:It sure sounds like a nice house, if you don’t mind me asking, why are you selling?

Then shut up and listen, because this is where you will hear motivation or not.

Now if the seller responds like this:
Seller: “Well, we are just thinking about selling, and wondering what you will give us for the house, we are thinking of maybe building a new house.”
They are probably not motivated, so make nice and get off the phone.

However, if the seller responds like this:
Seller: Well, we are both laid off, and the house payments are killing us, we only have a few months worth of payments left in savings and we need to get out of this house fast.
or
We are being transferred and need out in one week.
or
We are getting a divorce and neither one of us can afford this house alone, we just want to sell it.
We just bought it five years ago, so we don’t want to make any money on it, we just want out from under our mortgage payments.

You get the point hopefully.

After this, I usually tell them that I’ll need to gather a little more information and then set about doing that.

Me: Well, we certainly might be interested in buying your house. I’ll need a little more information to see which of our programs you would most likely qualify for.
Is there a loan on the house now?

Seller: Yes, we owe about $80k.

Me: Okay, what are the monthly payments?

Seller: $650/month

Me: Does that include taxes and insurance?

Seller: Yes

Me: Are the payments current?

Seller: Yes.

Me: Are there any other loans against the house or leins that you know of?

Seller: No

Me: Well, as I said, we definitely might be interested.
Let me tell you a little about how we work.
We basically buy our houses one of two ways, either all CASH for a SEVERE discount or with terms.
(Using the word SEVERE prepares the seller for the rest.)
Now, there is a reason we must buy at a discount, we use our own cash to buy properties, and we must get a good return to stay in business. (Sellers usually say, “Yes, I understand that”, which means they understand already we are investors and in business to make a profit.)
Based on what you’ve told me about your house, what I know of the market in that area, and what you owe on the house, I don’t think you would qualify for our cash programs, you owe more than we could offer you.
However, we might be able to take over your payments, cover all taxes, insurance, maintenance, repairs, basically everything to do with the house. This would get you a price high enough to cover the entire mortgage balance and no closing costs to you.
You could move on with no more hassles.
Does that sounds like something that might work for you?

Seller: Wow, it sure does, we are dying with this house and these payments, if you could take them over, we could move out in a week.

Me: I certainly hope that we can Sally. Before I can make you an offer however, either myself, or one of our associates will have to come out and inspect the house and talk to you and gather some more information and verify it.
But if all looks good and your house qualifies, we can get this taken care of in just a few days time.
When would be a good time Sally to come out and meet with you and your husband and inspect the house?

Seller: RIGHT NOW, we are both home.

Me: Great, let me confirm the address, it is, 123 gonnabeJimshouse ave, investortown, La. 55555

Seller: Yes, that is it.

Me: And your phone number, in case I get lost?

Seller: 555-1234

Me: Okay sally, I have one other appointment and a business matter to attend to, I can come over in say, 1 hour? Does that work?

Seller: Yes, we’ll be here.

Me: Wonderful. Sally, if you have them filed at your house, if you can gather the most recent statement from your mortgage, and perhaps any papers you kept from when you bought the house, that would help us save some time in gathering information.

Seller: Oh, I have all that right here on my kitchen table.

Me: Great, Sally, it was nice talking with you, and I’ll see you in an hour.

See, by guiding the conversation a little, without throwing out terms like LEASE OPTION and LEASE PURCHASE, and just stating how the programs work, “We can take over your payments”, you can then set up a meeting to explain the details.

When you meet with sellers, relax, talk to them.
Don’t be rushed, or be afraid to let the meeting go for hours if need be.
Listen to them talk, get to know them.
Look around the house as you tour it and inspect.
Take mental notes of what interests they have, and bring them up.
If they have trophy bass fish on the wall, comment on how nice they are and ask about when they caught them.
Listen, be humble, yet confident.
You are there to provide a service to the sellers, they NEED to sell their house, you DO NOT need to buy it.
Stay unattached to the outcome.
Once the sellers get to know you, realize you are confident and have a solution to their problem, a deal will follow.

And yes, there are motivated sellers in EVERY market.
That malarky about “Hot markets” and how “No one will entertain a creative seminar offer” is just that, malarky.
My BEST years of investing were in a VERY HOT market.
My houses sold FAST and for TOP dollar.
I still had oodles of sellers calling, thanks to aggressive marketing!

So, whatcha waitin for, get the word out that you buy houses, and let the sellers call you.

Good luck, and sorry if this was too long,
Jim FL

import · February 25, 2003, 9:44pm

One more question - Posted by rm

Posted by rm on February 25, 2003 at 22:44:28:

What’s your conversion rate? (Conversations/appointments?)

Do you only do subject to’s?

import · February 25, 2003, 9:42pm

Re: An uphill battle…(LONG) - Posted by rm

Posted by rm on February 25, 2003 at 22:42:42:

If you don’t mind my asking, what methods have been most effective for you in making the phone ring?

Thanks.

import · February 25, 2003, 6:00pm

Re: An uphill battle…(LONG) - Posted by Parag

Posted by Parag on February 25, 2003 at 19:00:54:

Jim:
I am sure you are right and everything. But I heard from Bronchick’s course about cold calling being one of the best lead generators.

My company which I work as a realtor which is Prudential, says that the phone is the best prospecting tool.

But it is nice and convenient to have sellers call you.

Parag

import · February 25, 2003, 10:58am

One futher question… - Posted by cre8ivegrl

Posted by cre8ivegrl on February 25, 2003 at 11:58:00:

Now that you have a motivate seller, the property and have explained that you take over payments, do you proceed with a lease option or do you take over the payments subject to? Or both depending on the situation? Can you give some examples please?

Thanks!
Shelley

import · February 25, 2003, 5:54am

Re: An uphill battle…(LONG) - Posted by dkeith

Posted by dkeith on February 25, 2003 at 06:54:19:

For every newbie on CRE,
gracias’ JimFL

that was incredibly insightful to listen to an obvious seasoned REI veteran go through a call.

That’s the current dilemma I’m sure most newbies are facing the actual process. We’ve been taught well by CRE and when we get a glimpse of the teaching in action it’s a nice shot of medicine after tons of failed contacts and calls.

import · February 26, 2003, 12:49am

That’s two more ?'s - Posted by Jim FL

Posted by Jim FL on February 26, 2003 at 01:49:11:

rm,
Conversion rate?
Hmmm…that depends on the call volume I suppose.
Today I talked to only four sellers, and will be meeting three of them tomorrow.
However, last week I talked to about 15 sellers, and only met with two.
Not all calls are ones where I want to even see the house or meet with the sellers.
I am cherry picking deals a little more now, because I have a rather specific plan in place.
Taking on certain types of deals is just not in that plan.
I am now only buying properties with substantial equity in them, no matter the terms.

And do I “ONLY” to subject to deals?
Nope.
I do seem to get more of them than any other, but this is due in large part to the calls I get, as well as the fact that I am very comfortable with that method, so it flows well for me.

I don’t consider myself a specialist with any particular method for buying properties.
I try to evaluate every sellers situation and determine a solution.
If I can find one that allows me to make a decent profit, then I have a deal.
No pressure, because I don’t NEED to buy any house, and neither do you.

HTH,
Jim FL

import · February 26, 2003, 12:44am

Re: An uphill battle…(LONG) - Posted by Jim FL

Posted by Jim FL on February 26, 2003 at 01:44:41:

rm,
I don’t have time to type up a complete list for you.
I market aggressively, in your face style.

Here are a few things I do.

Signs
Signs on cars, mine, my wife’s and those of a few friends and associates.
A trailer with signs on it that gets towed around on weekends.
Business cards, and business card magnets.
Ads in local weekly papers.
Ads in local eaterie menus.
Word of mouth.
Clothing items
Flyers, placed all over town, and passed out.
Door to door flyers or door hangers.
Malings to FSBO’s , FRBO’s, Vacants, eviction filings once in a while.
Builders get mailings periodically telling them how we may be able to assist them by purchasing the old homes of clients who want to buy their new homes, oer perhaps lease optioning the builders homes that are slower moving.
Banner ads at the local sports complexes.

And those are just a few of the things I have in place now.
I’ve done Billboards, radio, and some slide show type television ads in the local cable stations.

My favorite method by far is the signs though, they by far give you the most bang for your buck.

Take care and good luck,
Jim FL

import · February 26, 2003, 12:31am

Okay… - Posted by Jim FL

Posted by Jim FL on February 26, 2003 at 01:31:16:

Parag,
Okay, I’m not sure what to say.

You said, “My company which I work as a realtor which is Prudential, says that the phone is the best prospecting tool.”

Well, if your goal is to be another prudential and get listings with cold calls, then follow their program, that is what they do, right?

But heck, what do I know, I’m just an investor who buys houses…I thought that is what you wanted to do.

No offense, but this is exactly why I don’t work with agents often.

“But my broker said you cannot buy a house on an agreement for deed without letting the seller run a credit check on you, it is against the law!”

I heard this last week, the sellers STILL have not sold their house, and the listing expires in a few days.
I wonder if they will call me?

Maybe some other agent will cold call them and get it relisted.

Get my point.

If you have a goal to accomplish something, seek out those who are doing as you want to, and follow them.
They might just be on to something.

Take care,
Jim FL

import · February 26, 2003, 12:24am

Re: One futher question… - Posted by Jim FL

Posted by Jim FL on February 26, 2003 at 01:24:37:

Shelley,
The example I gave was one geared toward a lease option, because that is what the original poster was trying to pitch with their system of cold calling.

I prefer to buy subject to, and will now only buy with a lease option under a couple of different circumstances.
Things like:

The deals is just too good numbers wise to pass up, and the seller will only entertain a lease option offer.
The deal is good, but perhaps an upper end home, and I’d rather not be bound to it forever. Since I write my lease options up with sellers for 12 month terms with 4-6 automatic renewals at my discretion, I am only bound to the house for 12 months at a time.
It is a deal where I don’t think there is much room for profit, but I have a buyer in hand who I can assign it to.
I of course diclose up front to the sellers that this is the plan.

HTH,
Jim FL

import · February 26, 2003, 5:28am

If you don’t mind my asking… - Posted by rm

Posted by rm on February 26, 2003 at 06:28:10:

And if you don’t mind taking a moment to respond…

Do you have a system in place to track exactly where your calls are coming from?

The reason I ask is that I have found that the Pareto Principle absolutely holds true in marketing- 80% of your results are derived from 20% of your efforts.

Because you seem so focused on the type of situation you’re looking for, I’m wondering if you tracked your results a little more closely, if you’d suddenly discover that you could re-arrange your marketing mix so you’re attracting more of the type of deals you want.

Some of the things I was thinking you might look at are:

-exactly where are your calls coming from?

-exactly where are your “perfect” or “ideal” prospects coming from?

-do you have a method that’s generating deals that you might have done 5 years ago, but don’t want to bother with now?

-what plan do you have in place to refer those deals to someone else, so you make money without even having to meet with the sellers?

Just some ideas. If you’re too busy to respond, that’s okay.

Good marketing, and good investing.

import · February 26, 2003, 5:39am

Re: Okay… - Posted by Parag

Posted by Parag on February 26, 2003 at 06:39:45:

I am not saying that you are wrong. I am thinking a FSBO is probably not a true cold call? Because FSBOs are looking to sell their house?

I think you are right about calling the ads is less efficient than having people call you. But I have seen Bill Bronchick say in his course about cold calling being like a great lead generator. I remember reading on another web site, Lori Samson mentioning she does cold calling or calling certain people.

I will say calling up ads or people directly is not what a lot of newbies would feel comfortable with and it would cause them to get discouraged quickly.

Today, I am planning on putting an ad in the Pennysaver. This week, I have taken more action than I did in my entire lifetime in terms of the lease option business.

Jim, do you remember reading about the method of aging the ads. To see if a particular comes more frequently? Do you send letters out to those?

I am not saying you are wrong at all. But I am just telling you what I read and heard. Hey, I am starting to know investors who dont make calls at all.

Parag