Transcription
All right, pillar number three. This is the part where, if we've built our business successfully and we've slowed down and done the strategies like we're supposed to, as in implemented pillar number four or one to be successful in our business and our foundation, and then truly moved into pillar number two and really dug into understanding the concepts behind pillar number two, which is about understanding pinwheel marketing, what a lead intake process looks like, and truly digging into a lead network model which allows us to have multiple leads coming in from multiple directions where we're not even paying for them. It allows us to move ourselves into the communication phase, the research and analyzing phase, and the negotiating phase. And if you're a true student of this business, then those three phases are really the the core to making sure that you eliminate risk as you move into the business.
Now, as we've done that correctly, we've bracketed the seller, we've got a contract. Now we've got to go into contracting and to closing, which is how we get paid, and which is what everybody wants to do when they first start out. This is this allows you to build the confidence on where the money is coming from. Are you closing the deal? If you did your foundation correctly, now you know how to move that money, um, and how and what contracts to use, and how to fill those contracts out, and not just fill them out, but what clauses that you need to be putting into those, and how to get those to the closing table and get them closed quickly. And added to all of this is about understanding converting that seller, even if the seller says yes or if the seller says no, but it's all about getting your money right.
So, there's five key elements inside of pillar number three. So let's talk about those five elements. So these five elements are broken down into why investors freeze here, which is really a big part of not having a couple of things in place. Most investors freeze at the contract process. They'll talk to a lot of sellers, get excited about it, but then will never put a contract on it because they're afraid. Number one is they're afraid because they don't have the confidence. The reason they don't have the confidence to execute, move forward, is because they never put the foundation in place. If you have your pillar number one, your foundation in place, you know who your team is, you know where the money's coming from, you know what's in the right area for the right strategy, then the confidence will be there. So there will be no fear of you moving forward.
The second reason that investors freeze here is the because of the fear of no money. And this again goes back to foundation, pillar number one, is getting all the money sources in place that you need to be able to move through these deals. Like, for example, traditional asset, hard money, and then you have bridge and gap funding, and then ultimately private money. Private money is the key to this business. If you're not a student of private money, then the ability to grow will be even harder for you down the line. So I encourage you to do whatever you need to do to execute on raising and learning how to raise private money. Private money is the key. I can't say that enough, right? Like it is the key to your success and growing to the next level. Yeah, you can go out and do one or two deals at a time, but if you want to start going after like larger cash flow type properties, eight units, 10 units, 20 units, maybe doing some larger developments, or even operating multiple deals at one time, you're going to need to start raising private money. It is absolutely crucial. It is by far two, well, it's one of the two main reasons investors freeze in pillar number three.
The second part of pillar number three, of the five elements, is the the four steps to close and understanding these step processes. Like, once a contract's been accepted, what do I do next? Well, there are a sequence of events that need to be put in place, like A, establishing escrow's been opened, B, establishing that escrow has a copy of the contract, you know, C, establishing that escrow has earnest money deposit. Let me explain why those are so important in the four steps because a contract being signed is just a contract. It's actually not even fully executable until the contract is being pushed into escrow with monetary exchange because all contracts typically have some form of earnest money. If there's not an exchange of money to validate the agreement, then the downside is the agreement is not valid. And so these are part of those four steps to getting the deal closed and then getting your funds ready.
This is a big part of the five key elements is when you are trying to move forward into closing and you don't have all of your foundation in place, knowing where the money's coming from. What happens is a lot of investors wait to the moment the contract's been signed, then they start trying to get the funds together. The problem with that is is now you're working in reverse instead of forward, and you don't have a solid position and where the money's coming from. So now you're scurrying, and a lot of times you're making mistakes. You're you're taking money that you probably shouldn't be taking. You're paying more for money than you should be paying for it. You don't have a strategic plan on if you're using your money, how you're getting it back, or worst of all, you're using your money to actually buy the deal, and you're making a horrible, horrible return on your own money. And so getting your funds ready is part of foundation that gives you the confidence so that you don't freeze, so that you can move to escrow and close very quickly.
And then there is a nine-step process to follow. For example, once the contract's been accepted and you've followed the four steps to close and established escrow, you immediately now have a clock that's ticking on you, and you've got to move quickly. You've got to set up inspections, you've got to set up your walkthroughs, you've got to validate your comps, you've got to validate your rental agreement, you've got to move through these nine steps so that you can execute and know that you are in the right deal to move quickly and get closed.
And then obviously, the fifth key element is converting. And that is really, is it a yes? If it's a yes, then you are moving forward and converting through the closing to contract process and following these four steps to getting closing set up, and then the nine-step process to making sure it's a deal that you are going to actually execute and close on. But now, if they say no, there's still a converting process. There's still what we call an omni-effect where we're still following up with them. We're still continuing to make touches to them, and we're doing that through a multi-faceted approach of whether it's through email, text, postcards, phone calls. We're just staying in front of the prospect because eventually they will be more motivated and they will want to come back and say yes. Remember, the money is in the follow-up. You always want to be following up with your prospects, especially with sellers that are in distress. And the reason that is very important is because at the moment that you reach out to them, they may not be clear-headed enough to truly understand that you're trying to help and solve a problem. But over time, they might get a little bit more clarity on that, and if you're still there offering help and offering to solve their problem, they at that point could have the clarity to see that you are there to help them and move forward to start the process of getting that contract into closing.
So remember, pillar number three has a lot of moving parts in it, but it is the ultimate part that if you've done pillar two correctly and you've moved that seller into bracketing and got them into an offer position, we now have to take that offer and do something with it. And so that is the stage that we move through in pillar number three, which is the contract to closing. So I hope this helps you or get your mind thinking about some things. And there again, if you're if you're looking for a little bit more in-depth, there's several ways that you can do that. You could easily come come to one of our three-day workshops and learn a little bit more about that as well. So I look forward to hopefully seeing you with a copy of our book or even at one of our workshops. But until then, let's dig into pillar number four.