Ah, lease options… I just love that strategy. And I want to share the love with you. 🙂
So, I created a 1-page document that has all the steps needed to do a lease option deal. It’s actually uncomplicated. (You’re welcome.) My whole point with the doc is that investors tend to overcomplicate lease options, making them seem overwhelming. They’re not!
So, in my last email, I talked about Step 1: marketing to find motivated sellers. Super important.
Let’s move on to the next step…
Step 2: Talk with sellers.
Now that you’ve found a seller, you’ve got to talk with them.
2 important notes right off the top:
- I don’t have any scripts. It doesn’t feel natural to me.
- It takes time and practice to get good at this. You’re not going to be good at it overnight.
The best way to talk to sellers is by asking questions. Here’s some help: Go to YouTube and search for “Joe McCall Claude Diamond Cold Call.” The video is a few years old, but it’s still relevant today. We ask a bunch of questions and show you how to stay in control of the conversation.
By setting up the agenda upfront and being the reluctant buyer. We’re not chasing the sellers, we’re making them chase us.
Know this: It’s very rare to get a motivated seller on the first call who says, “Yes, I love you. You called me at the right time. I want to do this deal now! Thank you so much.”
So, one year recently, I did 58 deals — of those 58 deals, only 4 of them said yes on the first call. So, don’t get discouraged. Get used to hearing no. With consistent marketing and following up, you will get deals.
Stop trying to do something different… and start being consistent.
Your goal is to talk to 5 sellers a day — and you just ask questions, like these:
- Tell me about the house. Is it still available?
- Are you the owner?
- What are you going to do if you can’t sell your house? Are you going to rent it out? Or list it with a realtor?
- Why don’t you continue renting it? (If it’s a rental.)
- Why do you want to sell it?
- What’s your situation? Why do you want to sell it, sounds like a nice house?
- Why don’t you hire a property manager to manage it for you if you’re going to be out of town and you’re worried about being a long distance landlord? (If it’s a rental.)
- Do you have a nice house in a nice neighborhood?
- Is that a good price for this market? How did you come up with that price?
- Does the house need repairs? Is it in good shape?
Notice how some of those questions will likely get a “no” response from the seller. I actually want a “no.” Because I’ve just given them lots of things to think about that they hadn’t even considered before…
Since we usually don’t get a “yes” to a deal on the first call… when I send a follow-up offer letter or email, they’ll have had time to think about everything and might be more motivated.
So, by asking the right questions, it shows the seller that:
- You’re not desperate for the deal — you’re not a motivated buyer who’s trying to sell them and convince them and chase them. It gives you more power and control in the conversation. It’s about positioning.
- You’re not taking advantage of them, even though you’re buying the house on a steep discount. I tell sellers that they should list it with a realtor, if they want the full asking price — but, in exchange for price, I can give them speed and convenience. And with a lease option, they don’t have to worry about vacancies or maintenance and repairs.
So, when I’m “selling” the lease option, I sell it as a question. If they’re open to the idea of a lease option, I don’t spend 30 minutes on the phone explaining it.
“What if I could lease your property from you and take care of the maintenance and repairs, pay the rent on the first of the month so you don’t have to worry about vacancies anymore and then buy the house? You don’t have to pay any commissions. What would you want to do then?”
Then I shut up.
I ask a lot of questions and listen.
Be the reluctant buyer. You want them to sell you on their house.
If they start bringing objections up, I say, “Well, this may not be a good fit for you and that’s totally fine.” And I pull away… that’s the exact opposite of what they’re expecting.
I’m just gathering information from my questions. And then I tell them I’m going to send an offer that they can take a look at.
See, not complicated, right?!
Step 1: Find motivated sellers by doing marketing.
Step 2: Talk to them, know they’re likely not yet motivated, ask questions, send an offer no matter what.
Consistency is so important. Talk to 5 sellers a day.
Ok, more to come… the next step is sending the seller an offer in a lease option credibility kit. Man, I love this stuff!