REAL ESTATE HYPNOSIS: Diagnosing the Three Biggest Lies of Real Estate Investing
hyp·no·sis (hp-nss) n. pl. hyp·no·ses (-sz) 1. An artificially induced altered state of consciousness. Real Estate Hypnosis is the artificial induction of believing the “rules” of real estate don’t change – that well established principles of real estate must be followed or you risk failure. Real Estate Hypnosis is an industry wide belief that success can only come by doing what other successful investors have done in the past. In other words, Real Estate Hypnosis is teaching all investors to do the same thing. It’s setting forth artificial guidelines that must be followed and therefore, we as investors lose the very essence of what makes investing in real estate so great. Creativity!
Throughout the course of history, the people that are remembered, are the people that did things differently. They diagnosed the hypnosis society was imposing upon them and did things their way, despite the potential backlash.
Do you often wonder why you haven’t done a real estate deal. Do you want more deals? Are you frustrated because there is so much competition? How would you like to find deals other investors don’t know about? If you answered “yes” to any of these questions, you have to get rid of your Real Estate Hypnosis and start doing things differently.
Let’s start from the beginning. Have you heard other investors tell these “Lies”? 1) “You make money when you buy”; 2) “You need money to make money”; 3) It’s all in the numbers. Let’s dismantle these Lies.
Lie #1: “You make money when you buy” – I can’t tell you how often I hear this outdated cliché. When I first started investing, every “guru” I heard was teaching techniques on how to get the seller down on his price. “Beat the Seller Up”, “Low Ball the Seller” and/or “Make the Seller give you their price first”. They even teach the “Offer Formula”. You know the one where they tell you to offer the seller 65% of the ARV (after repair value) minus the repairs. I hate this formula and I hated “beating up” the sellers on their asking price. Frankly, the reason most of you aren’t doing more deals is because you are following this archaic formula.
Truth #1: “Price is irrelevant” –What if I told you that you could offer MORE than asking price and still be massively profitable. Most people look at price and the single most important item when deciding to buy or sell a home. I could care less about the price. I want the seller focused on the price, so that I can focus on what I want. Terms!
Lie #2: “You need money to make money” – This is the most powerful hypnotic lie for most investors. For most investors this is the biggest barrier they need to break down. This is the single most powerful belief preventing your success. I know. I believed it for a very long time myself. I thought, if I don’t have money to invest, how am I going to buy a house or rental property. However, I am living proof that you don’t need money to make money. I had no money when I first started. When I say no money, I mean no money. In fact, my very first deal I didn’t have the $4,000 in closing costs needed to close the deal. I took out a cash advance credit card loan to pay for it. Yet today, I am a well established millionaire. You can be too. You just have to disregard the belief that you need money to invest.
Truth #2: “The money is the easy part” – I say “If the deal is good enough, the money will find you.” It’s true. There is so much money out there. Just because you don’t have money, doesn’t mean the guy next you doesn’t either. In fact, most of my students are amazed at how quickly the money comes to them when they send it out. You see, if you are analyzing your deals the right way. If you are writing your offers the right way and the deal works, the money is the easy part. I know that may be hard for some of you to believe, but I want you to really work on believing that that money will find you, once you have a good deal.
Lie #3: “It’s all in the numbers” – Don’t misread this! The numbers are very important. If your numbers are off, you can turn a good deal into a bad deal very quickly. The reason this is a real estate lie, is because “experts” teach you to: a) Find Leads; b) analyze the numbers; and c) write your offers. Again, these 3 steps are important steps, however they are missing the biggest piece. The communication piece. How are we negotiating. How are we overcoming the seller’s objections. How are we getting them to a “yes” state. The numbers are important. Yet, if you are focusing on the numbers, it’s the reasons you are not doing more deals.
Truth #3: “Communication is the key to success” – Every word you use. Every phrase you speak has an impact. That impact can be negative or positive. The words you use, the way you dress, how you hold your body language and the tone of your voice, will determine how many deals you do. You see, seller’s want you to be the expert. They want you to be their problem solver. They called you to help them. To be the expert, you have to act like an expert. This may be challenging for someone who is new to the business or may not have a lot of experience. You need to know how to write contracts that deflect objections, the conscious filters, and develop rapport with a seller. If you do these things, you will be a master communicator and master communicators are the investors doing the most deals.
*Join ICOR & Chris McClatchey for an in-person workshop, Saturday, August 21st , “Deal Structuring & Creative Financing: The Post- Pandemic Investor Toolbox. Register HERE.