I believe there is one very magic ingredient that can help you to get the SELLER to work with you more often then not.
I was asked by someone: "how do you go about getting the SELLER finance SOME or ALL of the property?"
Well....there are NO certainties, but you sure can help the process along with something simple....EDUCATION. For YOU certainly, but in this case...THE SELLER may need some.
You need to be honest...Speaking to him as you would about anything to a "friend" of yours...you tell him what the qualifications are for a property to work for INVESTORS in this market.
NEVER say that you are a NEW INVESTOR.
Say that you are working with a group of OTHER Investors, and that sometimes YOU buy a property, or you pass it on to them. It makes it sound as if you are working from a Capital Base that is substantial, and filled with experience. These "OTHER" investors will be key in your teaching process.
You want them to believe that you are speaking from a position of Knowledge and Experience, and that the Information that you are about to give is not only Relevant to the property, but Accurate.
3rd person experience takes YOU out of the picture. (KEY).... You are speaking of what these "OTHER" investors are looking for. (those vultures) ya know ...the other guys.
By speaking as if YOU were an outsider to the process you take away some of the Defensiveness that would normally be present that inhibits the acceptance of NEW information. You are a NEW friend, just chatting about the market etc....
People like there houses....they don't want to believe that it may only be worth "X" today instead of yesterdays "Y"
Remember YOU are in charge here...NO ONE ELSE wants this guys house or he wouldn't be flexible, and you need to find out not only if he IS, but if you can MAKE HIM that way.
You need to explain the market to him.
Tell him about the need for LTV ratios that fit for HARD MONEY lending as a prerequisite for an INVESTOR purchase in THIS market.
The seller needs to Understand and Accept the idea that these are ratios that Investors are looking for to make a sale.
NOW you can change gears.
You need to KNOW already what the house is worth...comps.....AND figure out your MAX price BEFORE you get there.
You are coming to the table ARMED to the TEETH with information and an Offer that will make YOU money...not necessarily the seller happy.
The whole while that you are explaining The Market, LTV ratios, and what INVESTORS are paying for houses....you are keeping YOURSELF on HIS side as if you are only the messenger ...there looking at the house giving an Honest assessment of how this house "could" actually be sold given the current market cycle position.
THIS is "posturing" yourself as if it isn't necessarily YOU that will be buying HIS home.....it's one of those OTHER guys that you work with that have set THESE buying practices up....In other words....YOU ARE NOT TO BLAME.
It's those Professional Investors that you "work with" that have these Parameters and guidlines whereby a house becomes "buyable".
You are not ONLY building Rapport....you are being a friendly "teacher"....helping the Seller to understand why he NEEDS to consider the conditions that you have just layed out if HE desires to move the house.
THIS is EXACTLY where you want to bring the Seller. To a place of Understanding. A place where he drops his mental BLOCK that says "my house is worth more" Once they admit that the market IS INDEED as YOU say....you can then be creative and explain how you might make this work for BOTH of you.
Explain how you work with HML's that have LTV ratios of up to 60% for aquisition of funds. Then because you already worked up the Numbers before you came.......you will already KNOW what you have to work with.
Taking into account the Rents in the area you may find that you don't want a High interest HML loan above a certain amount. In that case explain that if the Seller can "carry" a certain amount for a year or so that HML funds could actually be aquired at a rate that would allow YOU and the INVESTORS to actually afford to rent the property out. "If we can do something like this...MR SELLER....we could make this happen quickly"
When you offer the price verbally....say something like...."Now that you understand the market a bit, I can tell you that an investor would pay...hmmm no more than X amount with the market the way it is...."
If it comes down to it ... you can ask the seller if he can carry a portion of the loan for a year with No payments or interest. If he says NO....add interest, but no payments. etc....until you get some agreement.
I think EDUCATION is the key to working with FSBO sellers. MOST have NO understanding of the market factors NOR the methods by which we aquire the funds to purchase these homes.
EDUCATION + RAPPORT = The best conditions for a purchase.
Prepare the Seller to accept your offer. It makes it easier to swallow.
TEACH THEM....AND THEY WILL SELL.....LOL
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
Don't let EXCUSES be the nails that keep you INSIDE the box.