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As real estate investors growing a portfolio, our perspective on the world is that we BUY properties. But really, it would be more accurate to say that Sellers SELL properties. Why? Because there’s no transaction unless the Seller would prefer to trade what they currently have (a property and situation) for something different that they would consider “better.” In this episode, Jeff explains that when we reorient our perspective to appreciate that properties aren’t actually bought, but rather sold, it helps us see that the game we are really playing in our acquisition efforts is the game of Seller Relations—the process of gaining empathy to facilitate a conversation in which the Seller can clarify exactly what they would be willing to trade their current property and situation for. When we successfully navigate Seller Relations, we get Sellers to say “yes” to our proposals.
Episode Transcript
In the last episode, we explored the question, is it true that quote everything is for sale at the right price? And if you have heard that episode, you know, we concluded that no, it’s not that everything’s for sale at the right price, it’s that everything is for sale. If you can offer the seller something that they would prefer to have more than their current situation. And in today’s episode, we want to talk about a related thought. Now, when you buy a rental property, or any kind of a property, are you buying a property? Or is the seller selling it to you? And this is another important and very closely related distinction that changes our mentality about what we’re really doing. And I want to explore this a little bit with you today. So let’s cue up the theme song, we’re gonna jump right into it. Welcome to racking up rentals, a show about how regular people, those of us without huge war chest of capital or insider connections, can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans, nor are we posting WE BUY HOUSES signs, we’re just looking for quote, motivated sellers to make lowball offers to. You see, we are people oriented dealmakers, we sit down directly with sellers to work out Win Win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I’m Jeff from a thoughtful real estate entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media, this show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio. Hey, thanks so much for joining me for another episode of racking up rentals. Show Notes for this episode can be found at thoughtful our e.com/ie 153 Please do us a big favor by hitting the subscribe or the Follow button or whatever it looks like in your podcast app. Because this shows available on all the major podcast platforms, it really helps send a message back to that platform you use that people like you are listening to the show. And that helps other thoughtful real estate entrepreneurs to find the show and helps us grow. Thank you so much honored with today’s episode. So in the last episode, as you recall, we discussed this idea, this question the statement that sometimes you hear out in the world of real estate investing? Well, everything’s for sale at the right price. And we dissected that a little bit. And ultimately, I did my very best to persuade you that no, that’s not really true. It’s not too far off. But it’s not really true. And it’s a better way of framing it is that everything is for sale. If you can offer the seller, something that they would prefer to have more than their current situation. And in this conversation, we discussed the idea of trading, right, somebody is basically trading their current situation for a future situation. And today, we’re going to take that same idea and go just a little bit further. And we’re going to think of it as converting. So what is trading versus converting? Well, it’s really pretty similar, right? I mean, if I’ve got a bike, and you’ve got, you know, I don’t know a set of golf clubs, and I trade you my bike for your golf clubs. Now you have what I had, and I had what you have. But converting is more of like one side of the equation. And just thinking about it from that perspective, in my case, that I’m thinking that I just converted my bike in the golf clubs. And you are thinking that you just converted your golf clubs into a bike. So the ideas of trading and converting are similar, but converting is a little bit more the perspective of one particular party. And we talked about in that last episode that people trade, what they have, for what they want, this is what we do all the time, you got 10 bucks in your pocket, and you trade that 10 bucks for a hamburger. And then later you have, you know, an hour of time that you trade for a shorter, less shaggy looking lawn, then that’s you trading what you have for what you want. Or again, you could think of it as converting your $10 into a burger, because eating the $10 bill wouldn’t be that satisfying, or converting your hour into shorter grass. So as a buyer of real estate, you’re always trading what you have cash, maybe credit maybe time effort for what you want to have instead, which might be this property, the cash flow of this property, the equity of this property, the value add opportunity of this property where you can force appreciation, etc. But we’re gonna think about it today from the perspective of converting so as a buyer, you’re always Converting what you have into what you want, right? So you trade for something, but you convert into something else. So here is kind of the thesis of today’s episode that pairs so well, with last week’s episode, there is no transaction in real estate, unless the seller would prefer something different. There is no transaction that happens in real estate unless the seller knows of something that they would like to convert their current situation into. Instead, it doesn’t make any difference really what we want, or if we want anything at all, if the seller wouldn’t trade their situation for something else, if they wouldn’t be willing to convert what they had into something different. There’s actually nothing to buy, right? So I kind of point this out. Because we think of what we do as I buy real estate, I certainly what I think about, I literally say those words out loud, or in my head or to somebody else every day, you know, I am a buyer of real estate. That’s how we think of it in this. And it’s absolutely true, of course. But really, if we want to think about it the other way, it’s, I am on the receiving end of a seller selling properties. It’s not that I’m buying properties, it’s that they are selling properties. And it’s not even that they are selling properties. It’s that I am the vehicle that allows them to convert the property that have or the situation or that property into something they want, instead. So it doesn’t matter what we want. If the seller wouldn’t rather convert what they have into something different. There’s nothing for us to buy. So here’s the good news, though. The good news is, most sellers would be happy to convert their current situation into something different. Most sellers would but the bad news, on the other hand, is that they are not always super clear on exactly what that is. Right? They might not even have even more than a general idea, let alone a very specific idea. And this is what prompts them to say something like Well, everything is for sale at the right price. If the seller says to you everything is for sale at the right price, what they’re really saying is, I don’t know exactly what I would convert this property situation into. But if the number was big enough, I’m sure I could figure it out. Right? That’s really kind of what they’re saying. But they don’t know precisely what that is, it’d be pretty rare to find a seller who would say, you know, oh, yes, I would like to convert this property I have into, you know, a $24,265 new boat, paying down $8,261 worth of credit card debt. And I want to take a vacation at $3,140. That would be extraordinarily clear vision on the on the part of the seller, and most cases, that they’re not really quite that clear. Now, here’s something that makes it even more challenging and a little bit obscure. It’s the concept of money. Because the seller is not trading or converting their property directly into that boat, for instance, or directly into a vacation home that they want to own. They’re converting that property in that situation into money. And then they will convert the money into the thing that they want, right? So there’s really two steps of conversion, and that those two steps of conversion even make this whole thing more obscure, because here’s the thing, at the end of the day, while everybody talks about money, nobody wants money. Money is paper with green ink on it, right? I know I’ve said that before. Nobody wants money, what they want is what the money can do for them. And what the money can do for them is it can buy them things, it can make them feel certain ways. And nobody wants green ink and paper what they want is what it can get them. Right. So here you’re talking to a seller, and you’re thinking yourself, well, there’s no transaction unless the seller would prefer to be able to convert what they have into something else. But the seller isn’t entirely clear on what that something else is. And even if they were all they can do is really convert their property and situation into money, and then figure out what they want to convert the money into. So you might be thinking, wow, this is really philosophical. This is really kind of theoretical. Why does this matter? Well, here’s what really prompted me to create this episode for you and to think this stuff through and to philosophize with you here for a little bit. Because I don’t think it’s just philosophical. As the title of this episode indicates, properties are not bought by investors, they are sold by sellers. And if that is the case, if that is the case, then what that means is that we really need to be focusing a whole lot more on the seller who wants to sell their property and understanding them and what they might want to convert their current situation into, then we would be focused on what we want, and the property itself, because it’s actually not really about the property itself. It’s about the seller and what they would want to convert their situation into. But as buyers were very focused on us and what we want, we’re very focused on the property itself. And it’s not about the property, it’s about the seller converting what they have into what they want. And that means we need to develop the skill of having incredible empathy for that seller. I mean, let’s talk about empathy. Just for a second, we’ve talked about a lot on the show. But let me just remind you, empathy doesn’t mean sympathy. Empathy doesn’t mean having a bleeding heart for the seller and saying, Oh, how can I give them exactly what they dream of just for the sake of being a good person? Empathy means understanding what things look like, from their perspective. Empathy means stepping into their shoes, and saying, if I wanted to convert my property into this other thing, how would I feel about that? How daunting would that seemed it would, it’s impossible and it seemed easy, what would be important to me, etc, we need to be able to see from their perspective, their vision of what they want to convert their current property or property situation into. And that can be challenging, because as I’ve mentioned here, in this episode, they can’t always articulate it superduper? Well, it sure would be nice if every seller you met had a 100% crystal clear version and vision in their mind of exactly what they would rather have than this current property. But that’s not the reality. So the game that we play is really a game of connecting with sellers, asking good questions in an empathetic manner, to help them get clarity on exactly what it is that they would convert their current situation into. And to be able to understand it from their perspective, right. Because if they’re not that clear, they just know there’s sort of something, we can help them get really clear on what that something is. And by getting them really clear, we now understand exactly what we’re trying to accomplish, in our proposal, to buy their piece of real estate. So this is really an important point, because it’s all about empathy. And we call this process in the thoughtful real estate entrepreneur lingo. lexicon language seller relations, this is the art of facilitating a conversation that has this empathetic element to it, even when the seller doesn’t have perfect clarity about what they want. Seller relations is about the art of having in facilitating that conversation, to get them even more clear on what exactly they would convert what they have into so that we know exactly how to make a proposal that they would say yes to and at the end of the day, my friends, that’s what it’s really all about. I want you to make proposals that other people sellers, will say yes to, we do a lot of good in the thoughtful real estate entrepreneur, community along our path. But we don’t set out to just say like, we’re not just like a nonprofit who wakes up every day and says, How can I go, you know, help more sellers get what they want. We say, I want to buy properties, and I want to get wins for myself. And I know that in order to do that, I have to give sellers what they really want. And I have to facilitate this, this process for them so that they say yes to what I put in front of them. And that’s what the artists seller relations is all about. Seller relations is the core of what we teach in the deals workshop, developing that skill set setting up the conversation with our marketing so that we have the right kind of conversation with the right kind of people and our seller relations skills can kick in and we can facilitate that off market direct one on one face to face conversation that is going to get them what they want so that they can say yes to our proposal so that we can buy their property but first we have to remember that properties aren’t bought. They are sold by their sellers. That wraps up another episode of her racking up rentals Thank you for listening very much. Again, show notes can be found at thoughtful rt e.com/e 153. Please do us a big favor by hitting that subscribe or follow button in your podcast app and taking a second to rate and review the show. Did you know that we have a Facebook group for us thoughtful real estate entrepreneurs too? It’s true. It’s called rental portfolio wealth builders. We’d love to have you join us over there. You can just go to group dot thoughtful r e.com. And the magic of the internet will take you right to that page. If you liked this episode, please take a screenshot of it and post it to Instagram. That’d be awesome. tag us on Instagram we are at thoughtful real estate. I’ll see you in the next episode. Until then this is Jeff from the thoughtful real estate entrepreneur signing off. Thanks for listening to racking up rentals where we build long term wealth by being a win win deal makers. Remember solve the person to unlock the deal and solve the financing to unlock the profits.
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