Kangaroo Kronicles 35 – How to Get a Good Deal
Saturday, November 19, 2011 By Stu Silver ·0
Kangaroo Kronicles 35 – How to Get a Good Deal
By
“Uncle Zally” / Stu Silver
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SAM camp was this week, Wednesday, Thursday, Friday, and Sunday, 10 hours each day. The purpose of this training is to buy a mobile home park, or commercial property. First, we find deals, then we figure out what they’re worth, send in a contract, and negotiate. When the offer is accepted, we inspect the property within an inch of its life, finance it, and then manage it … and live happily ever after in Kash Flow Land.
There are three people from Australia in the camp, and you know when there are Ozzies in the crowd, the good times roll. Haven’t had this much fun training in a long long time – wish the whole world had their sense of humor and down to earth attitude.
At the end of the first day, however, there was a slight heaviness in the air because they heard three mobile home brokers, all experienced professionals, deceive them.
“There are no good deals in the market,” they claimed. Therefore, ipso facto, the only thing to do was … buy their over-priced shop worn listings. The class didn’t know was how the game was played from an insider’s point of view. Brokers get listings based upon how well they convince owners they will get them the highest possible price. They sign them up, and spend the next few months trying to convince gullible investors there are no good deals, so they better grab this one. If they can't find any gullible investors, and they can’t perform at their listing price, they then beg for an offer, any offer, from an experienced investor, beat the seller up, get the listing price down, and a “lucky” buyer gets a good deal.
So on the morning of day two, I empowered the class. I showed them how to identify a possible good deal, how to call and obtain info, and then how to write their own offers that suited their needs. I put each of them in a separate office, listened to their telephone inquiries, helped them organize, and then ran from office to office, like a bee, collecting offers, sending them out around the country. It was fulfilling for me to watch five shy, fearful investors become “good deal mechanics.”
Now, it’s easier to have a broker bring you deals and write your offers, then for you to go out into the marketplace and find them yourself and write your own offers. However, when you are able to find your own deals and write your own contracts, only then can you consistently get the prize – the good deal.
What is a good deal? A great property at a great price with great terms and financing. The excitement in the room at the end of the second day was palpable. This was now a group of five empowered good deal mechanics.
They learned the three basic laws of investing:
1- If you’re not making offers, you’re not making money.
2- You won’t TAKE a good deal, you have to MAKE a good deal
3- To get a really good deal, you have to make a lot of offers, and then they suddenly appear … like magic.
Oh, yes. There is a fourth tenet:
4- Many times, an offer will be rejected now, and then accepted months later, when the seller gets a reality check.
Yes, it’s a numbers game. If you are looking to buy an average, mediocre deal, then it’s much easier. Just call one or two brokers, make one or two offers on their listings close to their listing price, which is what they will convince you is the right thing to do, and presto chango, you will have bought yourself a mediocre deal. No sweat.
But in order to get a good deal, or a really great deal, you have to make a lot of offers to flush out the really motivated sellers. Most sellers will not identify themselves as “motivated beyond all get out” until you send them an offer – then they will reveal themselves.Let me give you a real life example of this: Aran made an offer on a mobile home park and the listing broker, who shall remain nameless, chided Aran for his “lousy low ball offer.” The broker then presented the “lousy low ball offer,” because the law says he must, and abracadabra, it was accepted! The broker came to closing and grabbed a $60,000 commission on that “lousy low ball offer.” And Aran now owns another good deal in Kash Flow Land.
Speaking of Kash Flow Land, I found myself 3 great mobile home park deals, and 4 great warehouse deals, while I was making calls for my nieces and nephews in the class. (Please don’t think your Uncle is selfish. I always give my nieces and nephews first shot at any deal I call on.)
I figured that would happen once I got to calling again, doing it for my nieces and nephews. It’s amazing how you spill medicine all over yourself while you are administering it to others.After we take the good deals and place them into our management programs, I decided I am going to do one more SAM Camp in the Spring of 2012. It’s too much fun to stop now.
I am going to restrict it to 5 people – because that’s all I can fit comfortably into my office, and I can barely run from office to office fast enough for all the deals five nieces and nephews can produce.
And I’m sorry, but I don’t think I am going to do anymore SAM Camps after this next one. There is a limit to how many nieces and nephews I can watch over and help.
You see, when Zally is your Uncle, I am your Uncle for life.
Cheers, mates!
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