|Letter from Dan
“Wealthy People Decide Quickly”
Making decisions is a skill that is intentionally learned. Once I learned to make decisions quickly,
my income began to expand. My few pocket buyers know that I expect quick decisions on any
deal I bring them.
You might be wondering, “What’s a “pocket buyer”?” A pocket buyer is a buyer that has a
relationship with an agent or wholesaler who receives a phone call before the listing goes public.
Often the listing is referred to as a “pocket listing”. In other words, the pocket buyer gets first
crack at the deal before it is advertised to the general public or a list of buyers.
A pocket buyer can maintain their number one position with their agent or wholesaler through
speed of action and good communication:
1. Speed of Action-If you receive notice of a deal, especially if the notice was a phone call or
text, you gotta move lightning fast. Go see the deal immediately. Here’s an example:
It was a summer Sunday evening and I was getting ready to go get ice cream with my family when
I received an email from one of my Homevestors contacts, Tom, about a house that needed
renovation in a particularly desirable neighborhood. I postponed the ice cream and immediately
went to see the house.
The next morning, my first order of business was meeting Tom with a check to lock up the deal at
full price. There was a bit of a bidding war, but in the end, I ended up getting paid on the deal.
The only reason I got paid on that deal is because I was the first mover. I dropped everything I
was doing to get that deal done. Remember this, deals don’t wait. The early bird DOES catch the
2. Communication-After going to see the deal, communicate the feedback to the agent or
wholesaler immediately. As a volume wholesaler myself, it is difficult to track many different
buyers’ neighborhoods and deal styles. When I take the time to call a buyer or shoot a text, it is
infinitely easier to remember that buyer again when that buyer is very responsive throughout the
Here’s what I mean. Any buyer that immediately either makes an offer or tells me that the deal
doesn’t work for some reason, I will continue to send them a heads up on deals before they go
out. On the other hand, if the buyer doesn’t get back to me after I send the deal-because they’re
busy- I don’t usually remember them next time a deal comes up. I have way too much going on to
try and chase buyers to look at my deals.
The best pocket buyers call while they are in the living room of the deal and either buy the deal at
asking price or make a very reasonable offer. They make their decision VERY quickly. You want
the VIP treatment when it comes to being a pocket buyer? Go see the deal immediately and
decide if and what to offer FAST!!
Richard Branson often makes decisions about starting a new company in 30 seconds or less.
That’s quick decision making. I personally make my decision on offer price within 1-2 minutes of
looking at pictures and comps. I make an offer on EVERY DEAL that I look at. That’s a big
reason why I’m in the middle of 30 deals.
“How Much is Your Time Worth?”
How much is your time worth? We all do a variety of things with our time. Brush our teeth, sleep,
do laundry. Actually I stopped doing laundry once I understood how much my time was worth. In
other words I can pay someone to do my laundry and housekeeping because I can invest that
time doing what I am best at and produce much more income with that time.
Here’s what I mean. On my first rehab deal I remember getting an estimate from an electrician for
$4,000 to complete the work. The job included the electrical service, all outlets, running a few
new lines to upstairs bedrooms and installing fixtures among some other things. I grew up doing
electrical work with my dad, so I knew how to do the job myself. Even though it was a fair price,
even a good price, I didn’t give the guy the job.
Instead I spent weeks of my own time running wire and installing electrical items throughout my
own rehab. I also painted, spackled, installed flooring and many other low dollar tasks. In other
words I could have paid someone else to complete those items while I conducted my highest value
On my first deal I earned a $6,000 assignment fee. Over the course of 3 weeks I had invested
about 6 hours into that deal. That’s $1,000 an hour while I’m negotiating and closing deals. The
tasks involved in that 6 hours included many phone calls, a few visits to the property, preparing
and signing agreements and attending settlement.
During the time I spent doing the physical labor on that first rehab project I bought, I definitely
missed the opportunity to close at least one more assignment deal. Maybe more. It is difficult to
tell exactly what my opportunity cost was by deciding to do weeks of labor myself, but judging by
my income today, it was probably worth 10’s of thousands of dollars.
These days I focus as much of my time as possible to finding & negotiating deals. By keeping
that as my first priority, many people on my team earn their livelihood. My private lenders earn
tens of thousands of dollars in interest every year. Contractors enjoy steady work on my rehabs.
Wholesalers earn assignment fees and a few of my partners earn equally well.
My take away lesson here is to discover you own highest value task and then design your life so
that you are investing most of your own time doing that one task and delegating the lower value
tasks to other people. (To Continue Reading go to Page 2)
|I Recommend You Read:
|"Real Estate Investment Jewels of Wisdom"