One of the scariest aspects of the business to new real estate investors is when they get that first call generated from their marketing. It can also be scary to experienced investors because marketing is typically their single biggest expense.
When your marketing starts generating leads, or incoming phone calls, you need to know what to do professionally, and competently, without fear or apprehension.
It is critical to convert those incoming calls to appointments because that is the root of your business. How many leads is my marketing generating? And secondly, how effective am I in converting those leads to appointments?
Here are three guiding principles to remember when the phone rings so you can ultimately buy more houses.
No. 1 – Your role as an investor is to listen
Remember: they called you.
It’s their call. It’s about them. It’s their house and their situation.
It is not about you and how great an investor you are. Or how many houses you have bought in that neighborhood, or how much you know about real estate.
It is their time. It’s their call. So listen. Recap or review what they are telling you. This will make sure you are listening and understanding. Plus, it will allow that sellers to develop a rapport with you.
As they walk through their story or situation, repeat it back to them during the call like this: “OK, I understand you have inherited the house of your aunt who lived on the south side of town. She has passed away and the house is now vacant. And you are responsible for taking care of the house and selling it. OK; that makes sense.”
That is an example of repeating back to them what you have heard and helping them understand that you understand what their situation is.
No. 2 – A priority is to build rapport
You have a few minutes to build rapport on the phone, with these complete strangers, so they will invite you, a complete stranger, to their home.
That’s a big mountain to climb.
You have to understand the importance of this call and the importance of building rapport in this limited amount of time.
Ultimately, you want them to be so comfortable with you, and feel you have listened to them and you understand them, that they will invite you to their house.
No. 3 – Get invited to the house
You cannot help them until you can get to the house, see the property and understand them and their situation.Remember, you cannot buy that house until you get to the house, so you can make the offer and ultimately purchase it.
You have to get to the point where you ask for the appointment. “Well, when would be a good time or day for me to come by?”
Then be quiet and listen again.
You’ve got to connect with them. And, you have to connect over the phone.
This is something unique about our business as real estate investors.
People cannot come into our offices or our retail stores and say, “Hey, I have a house to sell; can I sit down across from you at a table and tell you about me and my house?”
It’s a great challenge.
When you answer that phone for that incoming lead, make sure there is a smile on your face and answer that phone and keep that smile on your face as you talk to them.
What not to do when you are on the call – and why
No. 1 – Do not ask about loan amounts
This could be pretty controversial because many investors won’t agree. I don’t ask about loan amounts. I don’t ask if they have a mortgage or how much they owe on the house. I don’t do that at risk of over-qualifying that lead or at the risk of talking myself out of going to that house because, “Oh darn, they’ve got a mortgage and they owe too much and I could never pay them that much.”
No. 2 – You risk that seller answering that question
The sellers could convince themselves by saying to themselves, “Oh darn, I can tell by the voice on the other end my loan is too high. This is never going to work.”
No. 3 – The information is private
Finally, this is private information. I am not going to ask strangers over the phone how much they owe on their house. For these reasons I am not going to ask about a loan amount.
I am going to go to the house of every lead I can get to because:
- Let’s say they owe too much. I could assign that house to some investor willing to pay more than I would. What they are willing to pay might satisfy the loan balance.
- I might refer that lead to another investor who purchases houses subject to the existing loans. Their model is very different and they can purchase homes subject to when the mortgage balance is higher than what the average investor would pay.
- It could also be a short-sale referral. If they owe more than the house is worth, I have a Realtor who will work with them to perform a short sale.
And finally, from personal experience, as crazy as it sounds, there are many, many sellers who owe more than the house is worth or owe more than you as an investor are willing to pay. They have money they will bring to the closing table to close the gap.
If they owe $80,000 and you offer $70,000 many individuals are comfortable bringing $10,000 to the closing table to pay off the balance of the mortgage you cannot. They understand the house. They understand what they owe, and they understand they are not going to get it.
And, they are fully prepared to close that numerical gap and ultimately sell the house to you.