Property deal sourcing and packaging can get complex. It doesn’t need to be that way. This week Mark boils deal closing down into 5 simple and easy to remember things to do. Do these well and you will make more money from your property sourcing efforts. You'll learn:
Get the free resource that accompanies this segment. [thrive_2step id='3341'] 5 Steps to Closing More Deals Cheatsheet [/thrive_2step]
11:38 - Facebook Group Q&A
13:00 - The Magical Figure
17:10 - Sourcing With Mark
18:36 - Build Rapport
20:04 - Listen
21:06 - Identify win-win solution
24:32 - Follow up
33:15 - In The Lab With Brad
36:48 - Make a List
37:35 - Create a Brief
39:30 - Find a VA/Freelancer
42:03 - Hire Someone
Too much to do and not enough time? Why not join the army of small business owners growing their businesses faster by outsourcing low value time consuming tasks and freeing up their time to concentrate on high income generating tasks. Find out all you need to know about getting started in outsourcing in this weeks ‘In The Lab with Brad’. You'll learn:
Get the free resource that accompanies this segment. [thrive_2step id='3342'] 39 Tasks You Can Outsource to Grow Your Property Business [/thrive_2step]
To follow is the transcript of the Facebook Q&A, Sourcing With Mark and In The Lab With Brad.
“What do investors prefer for R2R, ready made HMO’s or ones that would potentially make great ones?”
Mark: This session’s question was asked by Gaz Thompson and it was ‘What do investors prefer for rent-to-rent deals? Is it ready-made HMOs i.e. those already licensed or is it ones that would potentially make good HMOs?’ The short answer Gareth, is it’s whatever cash flow is well enough for an investor to be interested in the deal.
So generally, as for our sourcing site when we’re sourcing for our clients, one of the big things with the rent-to-rent deal is cash flow. You have no long-term benefit in terms of capital appreciation like you would have in a lease option. Obviously, you’ve got no ability to refinance that property if you were to purchase it, so with the rent-to-rent deal, the primary goal is to get as good a cash flow as possible. We work generally on the basis of a minimum cash flow of £500 net cash flow so after all costs, bills, etc. net cash flow of £500 per calendar month and obviously when it comes to getting those property deals, you have to work it out.
The Magical Figure
So existing HMOs, your difficulty will be negotiating with that landlord in order to be able to get their rental acceptance figures so the guaranteed rent figure you offer that landlord, you need to get that low enough. Then you also need to be able to, with a relatively minimal cost of refurbishment, uplift that rent to the maximum rental rate person per week in the area. That is the difference; that is where you’re going to want to get your net cash flow in place. Obviously, you’re going to have to factor in, if you’re going to include bills, which is something we always do and if you’re going to include council tax if you’re going for the professional sharers market. If you’re going for students you don’t have to factor in council tax, so obviously it will very much depend on the strategy that you’re sourcing for but once you get all those figures down, £500 is that magical figure.
Now, if you’re going to do it with the property that isn’t a current existing HMO then you’re going to have to remember the different sort of legislation changes. So you’re going to have to factor in, is the property in an article 4 for that area? If it meets the criteria for an HMO i.e. three stories, more than four or five households depending on your local area, local councils, always check. If the properties make a great HMO the chances are, that the rent that you’re going to guarantee that landlord is going to be pretty much the figure that they’re asking for because you’re going to uplift that rent. In some cases, you might even be able to offer £25/£50 a month more in order to be able to secure that property and have a very happy landlord client but also then uplift that property for that minimum £500 a month. So, in answer to the question, there’s no real preference for an investor. Obviously, it will very much depend on your own individual clients in terms of what they buy. If you’re looking to source as a general deal and to package and sell, investors are more bothered about the cash flow. So just make sure that the investors are ready for managing that property as a multi-let. Make sure that they’ve got a bit of experience managing a multi-let but make sure that the cash flow is realistic and then when you present that deal, you will sell those deals all day long. So I think that probably about covers that question.
Brad: Very well, indeed. That was a great answer, really good.
Mark: Thank you, Brad.
Brad: Gaz, thank you. Thank you very much for the question. If you’ve got a question that you want to get answered by Mark…
Mark: Or Brad.
Brad: Yes or me, yes, I know quite a lot about virtual assistants, outsourcing business systems, all that kind of stuff and Internet marketing.
Brad: All of that, so get along to goliathfbgroup.com which will link you straight through to the Facebook groups. It’s totally free. Loads of other property sourcers, property pros in there, talking about various different strategies, methods, techniques, etc. so much to learn in there. It’s actually really picking up quite a pace in there, isn’t it now, Mark? So it’s really quite exciting actually.
Mark: It is.
Brad: Really good stuff. So get along goliathfbgroup.com.
Mark: Hi, everyone. Welcome to this week’s sourcing with Mark and this week’s topic is – “Five Simple Things To Remember In Order To Close More Deals And Make More Money.” The reason I brought this into play is because we’re going to be sourcing deals via many different ways, we have our 20 Ways To Source Property Deals and obviously there are a lot more than 20 ways and there’s a lot of people doing this now. The market place in terms of property sourcing is crowded. There are a lot of sourcers out there, a lot of individuals doing this. There are a lot of companies doing this, but there’s still loads of deals out there to be heard by people that are doing things properly.
In previous episodes we’ve gone through how to set your business up properly. We’re going to be going through several other things that will get you sourcing better deals, stronger deals, more lucrative deals. Once we’re sourcing these leads, the important part is converting our leads into deals. So we find the leads, the seller, the landlord response, the agent comes back with a positive response suddenly, we’ve got to negotiate that deal. These five simple things are hopefully going to help you close more deals and then obviously in closing more deals naturally, you will make more money.
So the first thing to do, the number one to remember is rapport building and that means build rapport from that very first conversation. One of the mistakes that newbie sourcers make and newbie investors make is they just go straight for the jugular. They hard hit with a solution, they go straight in with the purpose of getting a deal out of that situation and it just doesn’t work.
You’re going to have to build the rapport. What I alluded to earlier in terms of how many people are doing this, what you want to do is make sure that you’re going to become friendly with that person. You’re going to try and get on a level with them, a familiar level so that they then know, like and trust you and then they’re going to listen to what you’ve got to say. People buy from people they like. Everyone in the sales industry would have heard that. It applies exactly the same to property. If you go in and present yourself in a nice way, you get on the level with them, you find familiar topics, interest topics, that means the rest of that call is going to be much simpler. Most importantly, you’ve just differentiated yourself from the majority of people that are phoning these sellers landlords and just basically going straight for the jugular. So build that rapport.
Open those two ears and listen to that seller landlord’s needs. So, we’re going to be asking questions, we’re going to be finding out what their pain points are. Ideally, what’s the solution they’re looking for and really dig deep into what they want, what are their circumstances, and the only way to do that is literally to ask the right questions and then let them speak.
Don’t go in with any preconceived notions. Just literally let them speak and it’s amazing, once you’ve built that rapport and you’re asking the right questions. So what you will get is that they will tell you a lot of information that will help you close the deal in effect, when it comes to the end of that conversation or again in future conversations and obviously that brings us on to point three.
So point one - build the rapport, point two - you listen to what their needs are and then point three is to identify the win-win solution for their needs. Now, the solution has to be win-win of course. If we just give them everything that they want and it doesn’t meet the criteria for us as an investor or as a sourcer, then there’s no deal to be had. This is because you’re never going to package and sell that deal or you’re not going to retain that property for your own portfolio because it might be operating at a loss. They will try and get a win for them and not look for you to gain as much of a win so, don’t be bullied, don’t be led down the garden path.
You need to identify their needs not their wants. So it’s a big difference, needs not wants. Once you’ve identified that, look for that win-win situation. That win-win solution is only going to be identified if you’ve done steps one and two correctly which is the rapport build and the listen.
Now, once you’ve identified the win-win solution, what we’re going to need to do is offer that seller landlord the proposed solution. We’re going to put that offer to them and the way that we’re going to put that offer to them is by relating that offer to the needs that we found out in the earlier part of the conversation, or previous conversations. In doing that, what we’re doing is answering all of their concerns, we’re giving them the answer to all of their worries and that means that they’re going to be more comfortable with the deal in order to get that through.
So when you’re making that offer, don’t get into a negotiating battle. When I say don’t get into a negotiating battle, in my opinion, don’t go in 50% below market value and then start incrementing up in little bits because it doesn’t really work. It can maybe get you a deal every now and then. Is that ethical? Potentially not. But it also takes you time and you’re going to have to be going backwards and forwards, backwards and forwards. You’re going to be offering another £1000, another £1000, another £500, another £250 and by the time you do all of this, if you factor in how much it’s cost you in time, it really isn’t a good deal anymore.
You’ve pretty much swallowed your sourcing fee in the time you’ve gone backwards and forwards. So if you make your offer, present the offer that suits you or your investor clients and then obviously make that the best offer that you can make. There’s no going backwards and forwards. There’s no negotiating. You minimize the time wasted and obviously that seller landlord will know that that is your best offer and what that means is that they don’t think you’re going to go up. If you’d gone up in a little increment, they’ll think you’re going to go up a bit more and you’ll just get into a battle or they’ll hold out. Whereas, if you’re very clear, the same works with the state agents, one offer; one offer only, that’s the best possible price. You can’t go any higher. If you could go lower that’s great but the point is you’re not wasting time and then obviously you put that offer to them. You will get more deals. You will close more deals.
Point five is follow up. I go on about follow up a lot. I talk about follow up in my training, in the Facebook group. I talk about follow up to my one-to-one students. It is so important. Most offers that you present initially will be rejected. You will get a lot of no’s, but the point with no’s is it it’s not a no; it’s just a not now. So, what we’re going to do is we’re going to follow up that process in accordance with the strategy that we’re sourcing for, but also when they do say no, ask why.
Make sure they’re explaining it to you, there might be a point. It might not just be the figure, there might be something that they didn’t understand when you were presenting the deal in terms of the structure, the process, if it’s a creative deal, the rent to rents, and the lease options, how they’re formed, that might have just been misunderstood. When they say no, just say, ‘okay, can you just explain to me what is it that you’re not sort of comfortable with? Can you let me know?’ If they say it’s the number, you say, ‘Well we’ve done the calculations’. You present them with the numbers and you showed that that’s best offer you can do.
If it’s not the offer then clearly there’s something that they haven’t understood about the process and that is a negative that you can answer. You can give them the answers, you can come back to them and then you’ll probably find that you close more deals that way as well. Be strong, be faithful in the offer that you put forward. A lot of people will start getting nervous, they get deal hungry, you get deal desperate, you want that deal especially if it’s your first deal.
You want that deal to go through so you start playing around with the numbers, you start adding on, you start cutting the deals when it’s coming to a rent-to-rent option or you start sacrificing cash flow or you start making up values which I see a lot and it’s just wrong, you know. If you’re doing the numbers properly and you’re making enough offers on a daily/weekly basis and you’re doing the due diligence properly, the deals will come. It’s a numbers game. We’re going to do a lot of offers, we’re going to have to negotiate with a lot of people but the key is if you have got the numbers absolutely right and you’ve made the best possible offer, that is going to be what they’re going to accept when it comes down to the follow up.
So keep following up and eventually, they will come back to you and accept those offers and follow up until property sells or the property rents out or, even if the seller tells you to stop bothering them. You can even just drop them a note maybe every month or so, just to check to see how things are going because people’s situations change.
Hopefully you found that useful, these very brief five steps to closing more deals and the free download of this session is those five steps. I’ve just bullet pointed them, so you can download that. If you’re listening in the car or while you’re out jogging, walking the dog, you can download that list. It has a few bullet points just to remember and you can download that as you wish. So I hope you’ve enjoyed that and as always, happy sourcing.
Brad: Hi and welcome to In The Lab with Brad. This week, The Ten Minute Starter Guide To Outsourcing. Now, have you sat up late at night? Maybe you’re in your fifth hour of logged working time, you feel like you’re working harder than ever yet your progress feels like it’s going at an absolute crawl? What’s going on here? You’re thinking. Why is this happening? Now, that’s how I felt about five years ago. I wasn’t working in property at that time. I was trying to grow my entertainment business but it just felt like I had created a job for myself and around about that time, I was reading a book called the E-Myth by Michael Gerber. Now, up until that point, I hadn’t really been into business books but I was open to taking in any info that had any chance of helping me unchain myself from what felt like a very hard job that I’d created for myself.
Now, incidentally, if you haven’t read the E-Myth, you must. It’s an essential read for any small business owner. It dawned on me that so many of the tasks that I’d spend hours of over time working on could have actually been done by someone else who had been very happy to get well, under £10 an hour for it. So in other words, I was spending hours of my time working for less than what was about the minimum wage in a job that I’d actually created for myself.
This wasn’t a good situation to be in and I needed to make some changes. So fast forward six months, one morning I woke up to three e-mails from my virtual team. Atteka in Bangladesh had completed the website design changes that I’d requested. Jeff over in the Philippines had inputted the data that I’d requested into the CRM. He’d mail most of it from CRM system and he’d send out two contracts to clients along with invoices. I’d also then received an alert from one of my other outsources that they’ve done the data entry Excel spreadsheet that I’d wanted populated. Now, the Excel task wasn’t quite what I’d wanted but that’s okay. It was 80% there, so I’ll go back to that VA and ask them to actually make some amendments. Now, in total the work that these three VAs or freelancers had done in the five days that it took them to do that was 12 hours so that’s more than a day and a half of my time that I’d saved.
Now, fast forward again to today and I can hardly believe that there was a time when I would have done any of those tasks that my VA currently does now. I know you probably heard sound bites like do delegate the fair, work on your business not in your business or you need to let go to grow, all those types of phrases. But for some reason, maybe you still haven’t started outsourcing yet.
So why is that? Well, there’s a whole bunch of hidden barriers. Maybe a lack of experience, you don’t know where to start. What do you actually outsource? You need the time to figure out what this outsourcing thing is about but you don’t have the time to figure it all out because you’re actually too busy, does that sound familiar?
So here are my basic steps, I believe, will be most helpful to you as you get started outsourcing. To accompany this segment I’ve also prepared a download for you which is the 39 tasks that you can outsource to grow your property business. You can get that at goliathsourcingacademy.com/session3.
Make a List
So first up, make a list of tasks and jobs that you could outsource. Split the list into a list of tasks that you don’t like doing and ones that you don’t think that you’re very good at. That’s just a nice way of being able to separate the tasks down and start to understand it for yourself.
Now use the download that I mentioned. This will help you jog your thoughts as to the types of task that you might be able to outsource. Once you’ve done that list, pick a task that you think will take between one and three hours to complete if you did it. It could be something like data scraping, for example. Maybe you want to create a spreadsheet of Right Move properties that had been on the market for, I don’t know, three months or more. So keep the task relatively basic to begin with, that’s important.
Create a Brief
Next step is you want to very clearly brief the task out. By that I mean that you need to create very specific instructions as to what you want done and how you want the task to be done. So don’t do what most people do at this stage, which is spend an hour typing out a step by step process on how to complete the task. You haven’t got time for that. That’s the whole point. Nor should you on the flip side just go and create a brief that’s three or four lines long and expect the virtual assistant to understand what it is that you want.
What you need to do is go to Google and search for Jing. Now, the first search result you’ll get will be a link to a website which is Techsmith.com/jing. That’s the one you want. There you can download one of the most valuable apps that you’ll ever use when it comes to communicating with your outsourcer or your freelance or your VA. Now, Jing which is this piece of software is totally free and it allows you to select an area on your screen that you want to record. It will then capture everything that happened in the area including you voicing over the instructions.
It then creates a video of it. It uploads it to its own website which is screencast.com and then it gives you a link to that video. You then share the link to that video with your VA. I use this about three or four times a day. It’s absolutely fantastic. So rather than pore over long reams of text instructions, your brief is audio and visual and it’s you talking over actually doing the tasks step by step. So you really can very clearly communicate over an instructional video exactly what you need done and how to do it.
Find a VA/Freelancer
So next, you need to find a VA or freelancer to outsource your tasks to. There are so many website services out there that you can use to find suitable VAs. You’ve probably heard of many of them. Staff.com, Freelancer, Guru, Peopleperhour, Upwork, Fiverr. Now, to cut down the choice for you, I would suggest that you go straight to Upwork.com. I’ve used this site for years.
I built a team of freelancers, all with different skills on this site depending on what I need doing and it’s just a great place to start. So once you’ve created your account, you need to then go and post a job description. For the job description you need to write a brief description on what you need doing and when you want it done by. With that job description, you should post the link to your instructional video on there as well, your Jing video. You’ll be given an option as to whether you want your job posting to be open to all of Upwork freelancers or to be kept private.
If you choose open, i.e. so all the freelancers in Upwork can see it. Just be warned that you will likely be flooded with tens if not hundreds of applicants, so you’ll need to then filter through them all to find the ones that you want and by all means do that but it can be a little bit overwhelming when you’re first starting out.
My suggestion would be to keep the job closed and then go and search for freelancers using the Upwork search filtering function which is really good. Once you found the freelancer that you like, Upwork gives you the function to be able to invite them to apply for your job. So that’s just a great way of taking the overwhelm out. Essentially, what you’d be doing is going out there and looking for maybe 10 to 12 freelancers and inviting them to apply for the job that you’ve posted.
Now, a common question at this stage is how much do I pay for them? Now, each freelancer will have a preferred rate on their profile. So use this as a guide for their preferred, you just use it as a guide to start with but in reality, they’re all negotiable. So for a basic data-mining task, I would be looking to pay comfortably under $6 or $7 an hour. Probably more like $4 or $5 to be honest, depending again on the experience and the feedback rating of that particular freelancer.
Okay, so now that you’ve found someone, it’s time to hire them. Now, for any new freelancer, I tend to hire them on an hourly contract at the agreed rate. So I will ultimately instruct them to work for only one hour. At the end of the hour, I would check their work. If it’s up to my required standard, I’ll instruct them to continue. If not then I’ll either further brief them or make the decision to end the contract and hire someone else.
Now, when you’ve hired someone, ensure they know that you’re open to being asked questions. Don’t assume that they know that. You want to keep the channels of communication open at all times, as open and as wide as possible. If they have a question, you need to get back to them as quickly as possible with an answer. Good freelancers, their time is also valuable. You should respect that and be prompt in your communication with them as well. So keep those lines of communication. It’s vital in all outsourcing.
Okay, so that’s the process. Now, I’ve tried to make it step-by-step as possible for you so that you could actually go and hire your first VA using this process. Now, bear in mind there are some real dud freelancers out there and the choice is huge but don’t be put off by having to jump some hurdles and go through some hoops because you’ve hired one of the duds.
You’ll need to kiss a lot of frogs before you can find one that really does a great job for you. So when you find them, when you actually find those freelancers that do a great job, you really need to treat them well. Look after them, take the time to build a relationship with them, give them a bonus every now and then.
So as you move forward, you’ll want to stop building a team of these freelancers that you can use regularly, all with differing skills. I keep many of mine on open contracts now so when we have a task that needs doing, they just go and log in and they start logging their time and they do it. As you start to outsource more and more of your tasks, it will eventually get to the point where it makes sense to hire a full time VA. That’s a topic for another episode entirely. So for now, just go and set stuck in. Honestly, you really will be glad you did.