The Hidden World of Investment Real Estate

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What if there was a whole hidden world of real estate investing that happens without real estate agents and without banks? In this episode, Jeff will be talking about the hidden world of investment real estate that most real estate investors don’t even realize is there, and why this hidden world is worth knowing, as well as how to access it and what some of the key ideas are behind that particular investment strategy.

Episode Transcript

What if there was a whole hidden world of real estate investing that happens without real estate agents that happens without banks? Well, there is. And you’ve heard me talk about parts of it on this podcast before, but I’ll tell you what. Recently, I was asked to give a presentation at a conference and I gave this brand new presentation. And when I got back from delivering that presentation, people said, Hey, that was a good presentation. You should make a video of that presentation and share it with people. And I said, That’s a great idea. So I did that. And then they said, You know what, you should share the audio from that presentation with your podcast, listeners. And that, my friends is what we’re going to do today. So let’s cue the theme song. We’ll jump right in.

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 are just looking for “motivated sellers” to make lowball offers to. You see, we are people-oriented deal makers, 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 the 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.

Thanks for joining me for another episode of Racking Up Rentals. Show Notes for this episode can be found at thoughtfulre.com/e176. Please do us a big favor by hitting the follow or subscribe button in your podcast app. It really helps fellow thoughtful real estate entrepreneurs to find this particular show. Thank you so much onward with today’s episode. And as I mentioned in the intro, today’s episode is a special episode, where I have taken the audio from a recent video, which was a video for a recent presentation I delivered live at a wealth without Wall Street conference. And in this video, and this audio, I’m going to be talking about the whole hidden world of investment real estate that most real estate investors don’t even realize is there, we’re gonna talk about why this hidden world is so, so worth knowing and understanding and knowing how to access and what some of the key ideas are behind that particular investment strategy. So I’m really excited to share this with you. So without further ado, let me give you the audio from that presentation.

Welcome. This is Jeff Stephens and I am from the Thoughtful Real Estate Entrepreneur. And today I’m excited to talk with you about the hidden world of investment real estate. So here’s what I do, as an investor myself and exactly also the same thing of what I teach and coach others to do in my coaching is buy properties off market with seller financing, using a relationship oriented approach to working with sellers. Now I call this the Direct Relationship Capital Method. And that is the underpinnings of what we’re going to talk about today.

If you were into real estate, chances are you want to build wealth, without needing to go to Wall Street wealth without stocks and mutual funds and equities and commodities and all that kind of stuff. index funds. Well, you can also pursue real estate though, without agents and you can pursue real estate without banks. Now you might be wondering, though, a couple things, and I hope you are because in your that would mean you are tracking closely with us here. You might be wondering a couple of things. The first one is, well, why do I need access to a hidden world? When there’s a whole world it’s totally not hidden in plain sight? Or you might be wondering a second question, which is, why would I want to avoid agents and bankers anyway? Well, let me just give it to you in a single word. And I would say the best word to sum this up is autonomy. I want personally control over my own destiny, and I’m guessing that you do too. I hope that you want that for yourself as well.

Now, if I can just be direct about it for a moment. The truth is this. I don’t really love the idea of gatekeepers telling me when and how I either can or cannot build my wealth in real estate. So who are the gatekeepers? What we’re talking about, well, there’s two. The first one is bankers. Now, let me just clarify, we’re not talking about the people who are bankers, bankers are just people like us, my brother’s my best friend, and he’s a banker. There’s nothing wrong with bankers, really what we’re complaining about here is the mortgage machine as a whole the system. And this is almost like, you know, that expression “the man.” It’s a demand as it relates to financing.

Here’s really effectively kind of what the mortgage machine and bankers say to us, you know, they say, in so many words, we will, we will be willing to grace you with the privilege of paying US interest, which by the way our business model relies on but we don’t want you to know that. If you meet our lending criteria, then you will be so fortunate as to allow you to be allowed to borrow money and pay US interest. But in other words, what they’re really saying is, they will loan us money when we fit in this thing. That’s a box when we fit in the box. And the box is defined as what our debt to income ratio is and what our credit score is. And if we have enough savings for reserves, and if we have enough savings that we scraped together for a down payment, but here’s the thing, and this is what really gets to me, when we are doing this, when we are trying hard to get ourselves into their box. When we’re focused on getting ourselves into the box, we’re not playing a wealth building game, we’re playing the make the bank happy game. We’re not even playing the game that we want to play. We’re certainly not buying real estate, we’re not even getting anywhere near building wealth in real estate, we’re so we’re playing the let’s make the bank happy game.

But here’s the thing you got to remember: mortgage loans are just tools, they’re not the means. They’re not the end itself; they’re the means to an end. Our goal is not to get mortgage loans, our goal is to build wealth in real estate, mortgage loans are tools, they’re there to work for us. But when we put so much energy into making the bank happy, it’s like the tool is controlling us rather than us controlling the tool or to use a different common analogy or metaphor, it feels like the tail wagging the dog, but I want you to be the dog in the mortgage loan. And the bankers who provide it, they’re the tail you should be wagging them rather than the other way around.

So who’s the other type of gatekeeper? Well, it’s real estate agents. And again, same disclaimer, real estate agents are just people and people are good, I have a real estate license. So I technically am a real estate agent. So we’re not complaining about the human beings, we’re complaining about the machine, the machine have listed properties now. Agents when we work through them, they act as gatekeepers, because we really only have access to the properties that are listed on the market. And in order to even have access to those properties, sure, we can see them on the internet. But if we want to have any real access to making offers on them and whatnot, we have to play the game kind of according to the listing protocol, the real estate agent, system, we have to play the game according to their protocols, right? We have to, we have to go see things in a certain way a certain time. And then we have to submit an offer in a certain format. And we have to be pre-approved with the lender if we want to have any chance of our offer being given serious consideration. And there’s just all these hoops we have to jump through that other people have defined. But here’s the worst part, at least as I see it. The worst part is this: the system is designed deliberately to keep us away from the seller. We’re deliberately being kept away from having any chance to understand the person with whom we’re having a high stakes negotiation. So we’re kept away from the person with whom we are trying hard to craft a win-win deal.

Let me ask you this. If you were a tailor, and you were in the business of hemming people’s pants, is it more likely you’re going to be able to tailor the perfect pair of pants for somebody if you never see that person and instead you call somebody who calls somebody else who then calls the client and says what’s the measurement we need on this inseam or this cuff? And then they call the person back who calls the person back who calls you back? Are you going to be able to tailor the pants perfectly if you have two intermediaries between you and the customer? No, you’re not; you’re going to be a lot better off tailoring, you’re going to have a much better likelihood of having the perfect tailored pair of pants if you can actually see that customer, that client in person, you can kneel down in front of them with your own tape measure, and your own scissors and your own safety pins and all of that, and you can actually measure them yourself.

Or let me give you a slightly different analogy. Think of a brain surgeon who is going to do surgery on a patient. That brain surgeon needs a lot of dexterity in their hands. If there are multiple layers between their hands and the patient’s brain, that makes things a lot harder. Can you imagine a brain surgeon wearing a pair of ski gloves, where there’s a big layer between them and their patient? No, it wouldn’t go well, it wouldn’t go well at all, because they wouldn’t be missing all of their dexterity.

We need to be able to reach the people with whom we are trying to do precise work of tailoring to perform surgery on to come up with the best possible outcome. We need to be able to see them and talk to them. So we understand exactly what we’re dealing with. So in a nutshell, if you are trying to build a portfolio of investment, real estate by buying listed properties with bank loans, which is the normal sort of way of doing things, if you’re trying to build a portfolio of investment, real estate doing things the normal way, the truth is you will only end up buying properties when the bankers give you permission to do so because they’re giving you permission to borrow their money. You will only buy those properties when the market has more supply than it has demand. And so there’s something available for you to buy. And you will only buy what the agents are willing and able to negotiate for you. Right and willing and able are two different things.

Have you ever had a conversation with an agent where you say, Well, I’d like to offer $250,000 for this $350,000 property? And they say no, I’m not willing to do that. Or the ability to negotiate, right? Maybe the seller is just a tough nut to crack. And the agent just doesn’t have the potential skill to navigate that particular type of seller in that situation. So you will only buy when the market lets you and when the bankers let you and you will only buy what the agents are willing and able to negotiate for you. Because you’ve delegated that task of negotiation to them. For me, this is not what I want to be doing personally No, thank you. Instead, I will take control over my own destiny. And I hope you will and if you will keep watching.

Let me tell you about our approach to buying properties without banks and without agents. So let’s just start by acknowledging the hidden world of real estate without bankers. There’s lots of elements. There’s lots of different ways to do that. Right. Now, you’ve probably heard of hard money loans. Well, that’s not a bank. I mean, it’s sort of a professional lender, but it’s not a bank, you could buy a property with a hard money loan. Sure. Partners. You could buy property with partners, you could get your money from partners instead of bankers, that’s an option. You could just save up cash or come up with cash in some other way and buy properties just with cash. So it’s not that that doesn’t exist already a hidden world of real estate without bankers. But those are the ways you already know. Okay, let’s put a quick pin in that we’ll come back to it in just a second.

Let’s do the same thing for the hidden world of real estate without agents. Well, you already know there’s some ways to buy real estate without agents, right? You’ve seen for sale by owner houses, you’ve probably seen their signs. You’ve probably seen the listings on the internet, Zillow and things like that Craigslist. You’ve certainly seen people post WE BUY HOUSES signs, that’s another way to buy real estate without agents. That’s no secret auctions, properties that have gone to foreclosure and things like that. That’s no secret. Those are ways to buy real estate, without agents.

But when we look at these things together, we actually see that there is a nice little overlap if we get rid of all those and there’s a little sweet spot in the sweet spot in the overlap of the hidden world of real estate without bankers and the hidden world of real estate without agents is what I would call relationship based off market negotiation with seller financing. This is the perfect blend of the two things. And what’s really cool is that this isn’t just a coincidental overlap between ways to buy real estate without bankers and ways to buy Real Estate without agents, that there’s actually a real synergy when you are talking to sellers, without an agent, about seller financing without a bank, these things feed off of each other. And that sweet spot is an amazing place to be in a whole strategy unto itself.

So when we do things this way, this approach, it’s not limited by bankers and what they are willing to loan to us based on our debt to income and our credit and our savings and all of that. It’s not limited by agents and what they can find us are, what they have access to what they know how to negotiate what they’re willing to negotiate. It’s not limited by any of that stuff.

And here’s another thing, that’s a huge factor, at least for me, at least for the people in my community. And I’m guessing if you’re watching this video right now, too, you might be one of us. This approach also just feels right, and that counts for a lot, because now we get the chance to work directly with the seller, we get the chance to put our best efforts into creating a true win-win scenario, we get the chance to build a relationship and know who the other person is. And in so many ways, this strategy not only works better, but it just feels better, feels more authentic to a lot of us who consider ourselves relationship oriented. So you’re not limited by any of these things, it feels better. And there’s just no restrictions. There’s no rules imposed by other party, there’s no ceiling, that you don’t have control of the only ceiling that’s there at all, is your own skills, your own talents, your own strengths, your own willingness to learn the process for getting in front of the right people and having that conversation in the right way and negotiating a deal. That works well for both of you. And you can be endlessly working on that and improving. And so there’s no ceiling, it’s only the only ceiling is how much you want to master those skills using your talents and strengths.

So as a note here, what is the arena where we play this sport, because I would say this is a sport, I picked up that term from my coach, Greg Pinneo. This is absolutely a sport that we are playing. So where is the arena, located where we play this sport, the place that we actually go, where these skills, these talents and these strengths show up in our acquisition efforts? Well, it’s this place right here. It’s the living rooms of regular people, because we know that regular people own great pieces of real estate that we would like to buy. And so our art happens in this space right here. Our performance of this sport happens in this space, right here in the living rooms of regular people being face to face relational and having real conversations with them.

So here’s what I want you to know. So far, before we get into the details of how we really do this, when you’ve put yourself in a position where you can buy anything that you want to, as long as your skills are able to negotiate. Then if you have put yourself in that position, you have created control over your own destiny. And that’s what I want. I hope that’s what you want. I think if you’ve gotten this far in the video, that’s what you want to you want control over your own destiny, you don’t want your destiny to be dictated by when and how much the banks say you can borrow money, and what the agents can find and negotiate and are willing to negotiate for you. I want you to have control of your own destiny.

So let’s get into the nitty gritty a little bit here. And let’s talk about the direct relationship capital method. First of all, let’s just start with the big picture, like what is the direct relationship capital method? Well, here’s my definition, I made up the term direct relationship capital method. So I guess I get to define it as well. The DRC method isn’t it’s simply an approach to buy real estate that emphasizes forming and nurturing genuine relationships directly with sellers. If we look at each of these three words, we see a few important things. we see the word Direct, which means you can have relationships but there are indirect as well. For instance, if you had a relationship with a realtor, that’s still a relationship, you might be very relationship oriented with the realtor, but you’re not having a direct relationship with the seller.

Capital is another thing, the direct relationship capital method treats relationship as an actual valuable currency, that helps us get deals done. If you think about it, there’s five currencies that we work with in the world. The first one is money, which we think about all the time as a currency. But time is a currency, right? You could pour time into something, if you had less money, you might pour more time into something, energy and effort is another, the third currency, right? Maybe you are willing to do the work to reroof the house. And that is the currency of energy and effort. There’s the currency of expertise, or knowledge. So you know how to roof the house, and you’re willing to do the work and you’re willing to put the time in, if you are willing to do those things you don’t need as much of the first currency, which is money. And the fifth currency is relationship.

So we have money, time, energy, effort, expertise, and relationship and every deal, every deal. Take some combination of all five of those to get it done. Yet, as buyers of real estate, what are we typically sitting around kind of fretting about, oh, I don’t have enough money? Well, if you don’t have enough money, you can compensate for not having enough money by having more of the other currencies, like I just said, in my roofing example. You don’t have an you don’t have $10,000 for the roof, but you have $2,000 for the material, you have the currency of time that you’re willing to put into it, you have the currency of effort and strength and energy that you’re willing to do. And you have the expertise and the experience to know how it’s done. So you use more of those currencies and less of the of the financial currency?

Well, if we think of deals in the same way, relationship is a valuable currency. That also helps us get done on a very tactical level relationship might be the difference between a 20% down payment on a property and a 10% down payment on a property. So the direct relationship capital method is based on what I call the “YESSES” framework. It’s the “YESSES” framework for getting off market sellers to accept your proposals. Let’s take a look at the “YESSES” framework. It is big surprise, an acronym.

Y, it stands for you, you have to start by understanding what you are trying to accomplish and what your own strategy is going to be. Once you know what you’re trying to accomplish, then you can go to the second step. E is for engage thoughtfully; now you get to reach out to the sellers who you have identified who are appropriate for the strategy that you want to employ for the types of properties that you want to buy. So now you’re reaching out to people, we’re using this engage thoughtfully step. Once you’ve engaged thoughtfully and you’re now in communication with them, you have to solve the person and you have to solve the person before you can solve the deal. We’re going to come back to this in just a minute and I’ll explain more fully. But you understand who you’re working with. Then you see how the deal might come together and what the mechanics of that deal might look like. Then you empathetically propose; empathetic proposal means you make what other people would call an offer, but you are presenting this offer in the context of what the seller wants. And then lastly, you sharpen and agree, which is you get the feedback from the seller on your proposal, you fine tune it. And you get to a point where everybody feels good saying yes and proceeding.

So let’s focus on three key highlights. From the “YESSES” framework things I want to make sure you don’t miss. The way that we meet a seller has got a huge impact on the way the negotiation will go. All right, let’s think about this for a second. In literal terms, what this means is, if we were to meet the same seller in say three different ways, in three different parallel universes, those three different ways would indeed have an impact on how that negotiation goes later.

So in one world, you meet the seller because you walk up to their house where they live and just knock on the door, and they open the door and you just start talking to them. That’s going to result in one type of dynamic. And that type of dynamic is going to have an impact on the way that negotiation will go.

In the second parallel universe, you posted a bandit sign on the side of the road and they called you back; same exact seller, same property, that’s going to create a very different type of dynamic and that will impact how the negotiation goes.

In the third parallel universe, you send them a letter introducing yourself and saying, Hey, if you’d ever consider selling this property, would you please give me a call and they call you that too is going to create a very different type of dynamic, and it’s going to impact the way the negotiation will go.

So what does this really mean? Well, what it really means is that we have to be thoughtful about choosing the way we meet our sellers, so that it facilitates the type of conversation and the type of negotiation we want to have. And I will tell you that when I want to buy a property relationship driven with seller financing, I am not going to choose to post a bandit sign and wait for somebody to call me back, that’s not going to create the type of dynamic that’s going to most likely lead to that conversation, I’m also highly unlikely to just walk up to their house where they live knock on the door, and start trying to talk to them. Those ways might generate leads, but they’re not going to generate leads that are set off on the right foot, the way that I want them to be set off on the right foot. So the way we meet a seller has a huge impact on the way that negotiation will go. So we need to choose thoughtfully and I’ll tell you in a moment what we do.

Secondly, we have to solve the person before we can solve the deal. Now what do we tend to do in real estate investing, we just we find properties, we start looking at properties, we start analyzing properties and running numbers and calculating this and that and looking at ARV, and all that kind of stuff. And the person who is the seller is at best, an afterthought, the person is just much more like the gatekeeper, we have to go through to buy the property.

But in our approach, we realize that in this off market, relationship based way of negotiating, we actually have to understand the person we’re dealing with before we can see all the possibilities of the deal itself. So I’m much more concerned at the beginning with understanding who am I talking to here? Who is this person? What is their perspective on everything? What is their perspective on their property? What is their perspective on themselves? What is their perspective on where we are economically and in a market cycle? What is this person’s perspective politically? What is this person’s point or stage in life? Is this one property that they own that I’m talking about buying? Or is this one of 75 properties that they own that I’m talking about? Do they drive a car from 1986? Do they drive a Lamborghini from last year? Did they vote red? Did they vote blue? Do they think that the market is crashing and they’re trying to get out? Do they think that who the market is going up still at this point? And what’s their frame of mind? Are they coming at it as do they think that they are God’s gift to real estate investing? Or do they act sheepish and sort of seem like they’re unconfident in themselves? We need to understand who we’re working with before we can have any sense of how the deal might come together. Because if we jump in and just start saying, Well, you know, I guess I would offer this down payment and the price could be this and we’ll completely miss all of the possibilities.

Let me just give you a real simple example. You might come into this thinking I’m going to offer 15% down because that’s kind of what I want; that’s how the numbers work when I create my cash flow pro forma, and I’m going to offer 5% interest and this and that amortized payments. And if you had spent more time talking to an understanding the seller, you might have understood that their greatest concern is the deferral of capital gains tax. And they would actually prefer to have 5% down instead of 15%. They would prefer to not receive principal each month; they feel like their alternatives are to take their money and go down to the bank and get a CD at one and a half percent. So now you’ve offered them 5%, when they probably would have been happy as a clam with 3%. You’ve proposed three times the down payment that you needed to, and that is actually a turnoff to them because they don’t want that much down. And we would have missed all of the opportunity that the deal had, because we didn’t take the time to understand the person.

And thirdly, we can’t make a proposal until we have solved both the person and the deal. I did just sort of touch on that; we in real estate tend to be so driven to put an offer in front of somebody really quickly. But in our approach, we realize we can’t. Well, I don’t want you to make an offer at all. I want you to make a proposal and we’ll talk about the difference of those in just a moment. But we can’t make a proposal and do a good job at it until we have both understood the person and solved the person that we’re talking to; the puzzle that is the person. We’ve solved the puzzle that is the deal, we can’t do a good job putting our best proposal forward until we have done both of those things. And so that means we actually have to resist the temptation to put something out there too early until we really know everything that we are working with.

So here are the steps. There’s six core steps that we go through in the DEALS workshop that correlate perfectly with the “YESSES” framework for how we do what we do. And I just want to walk you through these. The first step is we identify, and we’ll go back and talk more about each of these in just a second, we first identify the right people to reach out to then secondly, we reach out to them. Then thirdly, we build rapport with those who call us back. Fourth, we solve the person; fifth we solve the deal. And then sixth, we propose.

So let’s talk about what each of these steps really means. First, we have to identify who is the person who is actually a good candidate for seller financing, and which are the types of properties and then the locations that we would actually want to buy. So we have to first identify who we will even reach out to, and then we can get a list that we can market to. So who is a good candidate for seller financing? Well, let me give you a couple clues. Some of the best candidates for seller financing are absentee owners, meaning they don’t live at the property, meaning it’s probably a rental who have owned those properties for quite a while, let’s just say 10 or more years, the longer the better. Why is that person a good candidate for seller financing? Well, in a in a couple words, capital gains tax. If they are to sell this property, they will be facing a steep capital gains tax bill, because they’re non owner occupants, and they’ve owned it for a long time. And that means they’ve probably seen a tremendous amount of growth in the value of the property and appreciation. If they sell the property, they’re gonna have a big capital gains tax bill. Well, most people in real estate know about a 1031 exchange as a way to trade this property for another one to defer capital gains. But guess what, not everybody wants to do that. And when you’ve reached the age of 70, sometimes you say, You know what, this real estate thing has been fantastic, but I’m ready to be done and I want to be doing something else; I don’t really want to just trade this responsibility for another one, I want to get out of the business of owning properties. That person is a perfect candidate for seller financing. So if we know how to pull a list of people who likely fit those attributes, now we have a list we can mark it to.

And that leads us to reaching out, we then decide how we’re going to contact our list. And again, keeping in mind that the way we reach out to somebody and meet them has a huge impact on the way that conversation is going to go, we want to decide the right manner that we’re going to reach out to them, that’s going to establish the right kind of relationship. And in our case, what we do is we send a nice, thoughtful letter to the people on that list. Picture your normal WE BUY HOUSES letter that you’ve probably seen before. Now picture exactly the opposite of that. We’re not talking about buying their property quickly, closing fast and buying it as is and paying closing costs and none of that stuff at all. We’re simply saying, Hi, my name is Jeff, I have a couple of rental properties, I see you have this one, I’m looking actively to buy another one. If you would ever consider selling this property, would you give me a call, it’d be awesome to talk with you about it myself. A nice, simple, thoughtful letter formatted in a way that feels like it came from a regular person. And now we send the letters. And then when we send the letters, some of those people call back right, some of them call back right away. Some of them never call back. Some of them call back a month later. Some of them call back, I’m not kidding you, five years later, but our phone rings from our letters, we receive these calls. And our job is to begin establishing the relationship. But then our job is to get off the phone as quickly as we reasonably can without being weird about it, to upgrade our conversation from talking on the phone to a face to face meeting.

And this is where we can begin to solve the person which is our next step. We’re going to go to our meeting with this seller. We’re going to ask questions and we’re going to listen to their answers and we’re going to ask follow up questions but we’re going to seek to understand our audience, their perspectives, their attitudes. We’re going to observe what we see from them because we’re trying to understand who we are having this negotiation with. We’re going to be listening for their one big thing. Every seller has Multiple considerations that they’re thinking through their processing as they navigate the decisions they want to make about selling their property. But on that list of considerations, there’s always one that’s at the top of the list. There’s always one that is the most important thing. And we call that the one big thing. And if we don’t know the sellers’ one big thing that’s like not knowing the sellers itch, and our chances of being able to scratch that itch with the proposal we give them is not very good, because we don’t even know exactly what the itch is.

And then secondly, we need to be listening for the seller financing clues. Because if we know what to listen for, sellers will practically tell us that seller financing would be a good solution for them, right? If we hear sellers saying things like, well, I’d like to sell this rental property, but the taxes would kill me. Or I’d like to sell this rental property but I really like the income and it’s an important part of how I buy my groceries each month when we know what clues to listen for. We hear that the sellers actually tell us this stuff all the time. So that later when we propose seller financing to them, we can do so responsibly based on what they told us their concerns were, once we’ve solved the person, we can focus on solving the deal. This is where we get to use our math skills. So we kind of get to the normal, quote, normal real estate side of things where we’re analyzing the deal. And we’re creating our cash flow projections and calculating ARVs. And trying to figure out what we’re ultimately going to propose to them. Or as people would say, in normal real estate, we’re trying to decide what our offer will be. But we’re trying to figure out what the deal structure is that would give the seller what they need, and also works for us. Were effectively figuring out like, what are the seller financing terms that makes sense for them and makes sense for us. And we’re preparing to make a proposal to that seller.

And then that’s the last step. This is what we do we propose our plan to the seller, we do this in person, we deliver the proposal, we don’t send the we don’t send an offer. We deliver a proposal, what is the difference between a an offer and a proposal. An offer is really all about us. A proposal is really all about them. An offer says, Here’s what works for me, here’s what I’m willing to do. You can a take it, believe it or see counter it. But a proposal has a totally different type of energy. A proposal says, you shared with me what you’re trying to accomplish. I listened closely. And I’ve been trying my best to come up with a plan that I think gives you what you’re trying to do, helps you get where you’re trying to go in life. Here’s what I’ve come up with. Let me share with you what that proposal is and why I think these elements of the proposal, this price, these terms make sense to get you where you’re trying to go in life. So at that point, the seller is then not going to likely say no or yes, but they’re likely going to have some feedback, right?

So in the normal world of real estate, we’re going to, we’re going to get counters Well, in the world of relational negotiation, we don’t tend to get counters, we tend to get feedback because we’re asking the seller for the feedback, actually, we’re presenting them our best proposal, we’re saying this is my best shot at the moment to come up with a plan that works for you and what you told me you want to accomplish. And I want to get your feedback that what feels good here, what where did I hit the target? What seems like a miss, is there anything here that feels like it should be different and then ultimately, once they have provided that feedback, if you have revised the deal at all, now you get to write the deal up in a purchase agreement format.

So let me just recap where we have been here talking about the hidden world of investment, real estate. I love to see investors like you learn the art of buying properties off market with seller financing, using a relationship oriented approach to working with sellers. Why? Because when you master that process, which is totally possible. By the way, you can absolutely master that. When you master that you get autonomy. You get to have control over your own destiny. That’s what I want. I assume that that’s what you want, if you’re watching this video, as well. And like I said, for many of us, not only do you get more autonomy and you have more success, scaling your rental portfolio because you don’t have the gatekeepers of bankers and real estate agents. It simply feels better. When we’re out talking to people in this way and sitting in those living rooms. It feels more genuine. It feels more authentic, it feels more relational. It feels like we’re actually treating somebody well and helping them and we’re going to build wealth ourselves using a win-win manner. And we’re going to do it right here in the living rooms of the regular people. We can buy properties from who we can help by buying their properties in a way that makes sense for them and makes sense for us. This, my friends is exactly what we do in the DEALS workshop. It’s what we teach and coach: this process that helps our clients put off market seller financing deals in contract. That’s the whole point of the DEALS workshop. And this methodology is precisely what I have done to grow my own portfolio and be a full time real estate entrepreneur now for 10 years.

If you want hands on detailed step by step, tactical, actionable guidance, and mentoring and training on all of these steps, because there is a lot to know, it’s absolutely masterful, but you need to have the right training, then check out thedealsworkshop.com. When you get there, there’s a little video on this homepage and just be sure to click on this button that says apply to join DEALS. That will lead you through a few more pages that tell you lots more about the workshop, how it works, the philosophy, the methodology, the spirit of it, and you can see if it feels like a fit for you.

Okay, there you have it, everybody. I hope you enjoyed the hidden world of investment real estate, I hope it gave you some new thoughts and ideas. And most of all, I hope you leave this episode feeling maybe excited to dig in and learn more about these different things that we do without involving Realtors, without involving bankers and all the incredible growth that we can have as entrepreneurs and moving towards financial independence as a result of it.

So that is it for today’s episode of racking up rental. Again, show notes can be found at thoughtfulre.com/e176. Please do us a favor and yourself by hitting the follow or subscribe button in that podcast app of yours and take a second to rate and review the show; that helps us so much and I’m so grateful when I see every single one of them. Did you know that we have a Facebook group for thoughtful real estate entrepreneurs as well. It’s called Rental Portfolio Wealth Builders and we’d love to have you join us over there; just go to group.thoughtfulre.com and the magic of the internet will redirect you right to that page in Facebook and you can join us. If you liked this episode, and I hope you did, please take a screenshot and post that screenshot to Instagram and you can tag us; we are @thoughtfulrealestate. So I’ll see you in the next episode. Until then, this is Jeff from Thoughtful Real Estate Entrepreneur signing off.

Thanks for listening to Racking Up Rentals where we build long term wealth by being win-win dealmakers. Remember: solve the person to unlock the deal and solve the financing to unlock the profits.

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