WARNING! Only Offering Sellers CASH for Their Property May Be Detrimental to Your Financial Future!Posted on January 4, 2014 by
A few weeks ago I attended a weekend training put on by, who I believe is the most creative and knowledgeable real estate investor and teacher in this country. The training was put on by Peter Fortunato. Peter spent two days with his class explaining how dozens and dozens of deals he had helped structure without the need for institutional financing or credit. It truly amazed me how he never completed any of the deals he spoke about in the same way twice. Each and every one of the deals was structured in a way to achieve a specific objective. In other words, each deal was structured to come up with exactly what his or the seller’s goal was at that time.
Some deals were designed to minimize taxes, some were designed to maximize cash-flow, while others were designed to overcome some type of problem the sellers were facing and thought they had no solution to their problem until they talked to Peter. Peter, who is considered the master of “Doing Things on Purpose” would create deal structures that solved the problem at hand. His work has amazed me for years and when I take one of his classes I become even more amazed how anyone could create the deal structures he does.
In this class I realized what Peter was trying to teach us. He was telling all of us that every deal you will ever come across will always be different and each of those deals will take a different solution than the last deal to solve the seller’s reason why they are selling their house. Over the course of the weekend he showed us why giving ALL CASH to the sellers wasn’t always the best answer for every seller’s problem. From my own personal experience I have also found that every seller doesn’t want ALL CASH. I have found some sellers need debt relief and others may want to sell because they are tired of dealing with a problem property. I have bought houses from sellers who were trying to avoid as much tax consequences as is legally allowable. I know every seller has a different reason for selling their property and when you as an investor figure out what the sellers really want will always be a better solution than just throwing cash at every seller. In my own experience CASH was not the main objective of the sellers I have dealt with over the past 35 years.
The problem as I see it, we have all been taught that the only way to pay for a house today is to go to a bank, get a loan and pay the seller all of the money they are entitled to from the sale of their property. We are taught that every seller only wants CASH and will not take anything else. If you truly believe that, think again!
I guess the moral of this story I am explaining to you is, “if a seller doesn’t want what you first offer them, make another different offer, if they say no again make another different offer until the seller accepts what you are offering”.
I can’t over emphasize the fact that you ALWAYS need to actually talk to the sellers to find out why they are selling and what it is they actually need. If you can’t talk to the sellers and discover why the seller is selling, you stand little chance of giving the seller what they really want and need to solve the problem they are facing in their lives.
I have learned that there are dozens of ways you can make an offer to buy any sellers house. There is not just one way. One sized offer doesn’t fit all deals.
Remember, solve the seller’s reason for selling their property and you will always have a better chance of buying the sellers house. This will always be better for both you and the seller by giving the seller what they want and you create wealth and your financial freedom.