Recently, my partner Peter Conti and I followed through on a dramatic press challenge. We had challenged the press, “Send us to any city with a group of three beginning real estate investors, and in three days time each of these investors would either own or control a minimum of $250,000 worth of real estate using none of their own money.” The challenge was accepted and we went down to San Diego, California to make good on our challenge.
During this 72 hour period Peter and I and these three beginning investors picked up over $1.5 million dollars worth of real estate with only $37 down. That's right, we picked up ten separate properties ranging in value from $90,000 to $500,000 and the most we put down to control any of the properties was $10. (The best part is that these ten properties are now worth well over $2.5 million!)
Since that time I've been asked many times how we did it, and how someone else could do the same thing. Taking what we learned on the original San Diego Challenge, I want to share with you how I would find and close a deal in any city in 72 hours or less-and how you can too!
Step One: Getting Your Leads Together Fast!
My first step would be to visit the local library and collect all the local paper's real estate for sale and for rent ads for the past 2-3 months. I would go through the for sale ads and create a phone number list of the for sale ads that satisfy two conditions. First, they must be for sale by owner ads (you don't want to be talking through agents if you need to close a nothing down deal fast.) Second, they would need to be at least 1-3 months old. Next I would list the phone numbers of all the properties for rent that are between 2-3 weeks old that look like they are NOT controlled by a property management company.
Step Two: Sorting Through the Leads
Step two would be to find a phone and start making calls. The biggest benefit of listing the numbers on a separate sheet of paper rather than calling out of the classified ad section itself is that the newspaper will only slow you down. All the information about the house doesn't matter until you find the right seller-a motivated seller. Then you spend time checking out the details of the house.
Since you have aged the classified ads you are calling time will screen out many of the NON-motivated sellers for you, leaving you with a more concentrated pool of motivated sellers to talk with.
How long would I spend on the phone calling property owners? Until I set up 4-6 quality appointments to meet with sellers. Your goal from your phone call is to find a seller with both a situation you can help solve and who has the motivation to sell. Once you find a seller like this set up a time to see the property and talk things over.
One of the biggest mistakes many investors make is to try to explain your offer over the phone. Don't do it! Instead, if the seller presses you for an offer tell him, “Look Mr. Seller, I don't know if we have a fit here or not. It might very well turn out not to be a fit. Before I know what I can offer you, or even if I can offer you anything, I need to know a lot more about the house and your situation. The next step is for you to invite me out to see the house and for us to sit down and talk things through.” Notice how you are being a reluctant buyer here. The other benefit you get from this approach is that you never have to try to explain your offer over the phone before you've met with the seller (which is always an uphill road to climb.)
Step Three: Meeting with the Owners Face to Face
The final step to get a deal closed in 72 hours would be for me to go out and meet with these 4-6 sellers. I would build rapport, listen and draw out their real needs, and find a win-win solution to meet their needs and make a profit for me as the investor. From these 4-6 appointments you would close the deal.
There you have the specific gameplan to find and close your next deal in 72 hours or less. Still seem impossible? We repeated that San Diego Challenge two months after the first Challenge. And with three different beginning students we picked up three more houses, worth approximately $750,000, with nothing down. These steps work. The only question is will you.