In the wholesaling world, the importance of asking the tough questions cannot be overstated. Fortunately, while it’s not always easy, it can be done. In this episode, no less than Cody Hofhine shared how asking the tough questions SHOULD be done!
If it’s any consolation, asking the tough questions is something many people struggle with. However, for those who have mastered the art like Cody, asking the tough questions has become second nature.
In this episode, Cody shared a real-life case study of how asking the tough questions should be done and why it’s so crucial to your success. If this is one aspect of wholesaling you also struggle with, you should consider listening to this episode a must!
Ask – How Asking Tough Questions Can Help You Close More Deals!
We are going to deep dive into a case study, a deal that I did. My team was down in a place called Lake Powell. My business partner had taken them down there to reward them for an awesome 1st, 2nd, and 3rd quarter where they’re hitting their goals consistently. Every year, we take them down on a houseboat, down-to-go team build, but also reward them for an incredible team play. Let’s rock and roll.
While they were away, I had to put the gloves back on and hop in the ring. I’m sitting there in my office and I have our executive assistant. She comes in and she’s like, “Cody, there’s a deal.” I’m like, “You’re on phones today?” Even some of our cold callers or even people to answer the phone, we’re down on that trip. She’s like, “Yes. I’ve got a good one for you.” I said, “Tell me a little bit about it.” Without her even being on that phone that often, she did so many things right and I want to point that out.
The main questions that she asks are, “I got some of the details on what the home is, what’s the bed and baths. I was asking why they’re selling and they’re like, ‘We want to sell quickly. We inherited this from my mom and she passed away. It’s been many months going through probate. It’s been nothing but a headache. We’re done. We want to be out.’”
Here’s the beautiful thing and why this works so much. I want you guys to understand this. Be willing to ask the crucial, the difficult questions. Many times we shy away from difficult questions. When she heard this, she still went in and asked some difficult questions even though they already sounded like, “I want to sell. Let’s make this happen.” She says, “Have you considered listing this with a real estate agent?”
For most people, you would naturally think, “Why would I dare ask this? Why do I want to try and lose this deal to a realtor listing it?” If you’re willing to ask the tough questions, you’re able to find out even more about the deal and the why behind it. Why is it that they’re selling this home? When she asked that question, “Have you thought about listing this with a real estate agent? That is obviously your highest and best way to get your most money out of this home.” They said, “No. We don’t want to wait that long. We want to be done quickly. We don’t want to have to wait 30, 60, 90 days.”
They’re coming back and saying, “It’s more of a timeframe thing. We want to be done.” She asked the tough questions. That’s something crucial. Write that down in big words all over your office or all of your desk, “Ask the tough questions.” It’s the tough questions that reveal the true why. Why is it they’re selling the home? It helps you understand the timeframe. It helps you understand if they’re willing to do a deal, they want to do a deal, and they want to make a deal with an investor.
Ask the tough questions. It’s the tough questions that reveal the true Why.
I go up to the house, I tried calling beforehand, and she’s like, “He said he’d be there for the next two hours.” I’m driving up to the home. I’m calling and they’re not answering. I left a voicemail and I showed up. I pulled up in front of the house. He comes out of the house and he’s like, “Cody, I got your voicemail.” He never called me back, never texted me, no nothing.
It ended up being a brother and a sister there. I’m like, “How do I help you guys? I hope there’s something by the end of this conversation that either might be a fit where we can buy it. If not, we’re going to figure out who’s going to be your best option to buy this. Either way, I’m here to help you guys.” That was it.
You see this big guard. It’s almost like a weight off their shoulders, “I’m not dealing with a salesman. I’m not dealing with a guy that’s going to twist my arm and want me to do a deal today. He’s here to help.” If you can present yourself in a way of, “I’m here to serve you. I’m here to help you. Regardless if I buy your home or not, we’re going to figure out the best situation for you and who is the best option for you to buy your home.”
We go to the home and we start talking about them. Notice that I didn’t talk about the home. I didn’t talk about what needed to be fixed up or repaired. I simply sat on a chair in the living room while the two of them sat on the couch across from me and I said, “Tell me a little bit about this place. What is it about this place? It sounds like it was your mom’s and you inherited this.” They’re like, “Yes. It’s been difficult because it went through probate. She didn’t have it in a trust. By going through probate, it took us six months.” I’m like, “Ouch.” They told us the number that it costs the attorney to do it. It’s a difficult situation.
They’re sitting there talking more about it and they’re like, “This was our childhood. This is where we grew up. This is where we lived many years of our lives. When we got married, we’d come out here to hang out with our family and hang out with my mom and dad. This is the place. This is where it all took place.”
We got up and I’m pointing to the backyard, I’m like, “Did you guys play in the backyard at all? What was it that you loved to do?” He takes me to the front room and he’s like, “See all these homes out here?” I’m like, “Yes.” He’s like, “That used to be a field. Me and my dad would go out there and hunt pheasants. It was awesome that I could wake up, get out of my bed, go downstairs, and I’m in this huge field full of pheasants that I could go and shoot.”
He started telling their childhood. He started telling me how their childhood friends had grown up and some had gone and moved out of state and some hadn’t, what they love to do as children, and what they love to do as teenagers. They started opening up and sharing the whole story. It then got to the home.
After we talked for about 30 to 45 minutes about them and got to know them and a little bit about the history of the home, we started talking about the home. They’re like, “We want to get rid of this as of yesterday.” I’m like, “Let’s see if I’m a fit. I may or may not be but it’s okay. Let’s work through this. Let’s find out what is the best fit and let’s get this done today. Is this something that you want to have the answer on what is going to go on by the end of this day?” He’s like, “Yes.”
It’s crucial to know that information because that lets me know if there’s a deal for me. They’re also ready to commit right now, which is good. They didn’t need to wait for 10 or 15 offers or they would have said, “I’ve got 3 or 4 other people coming out to look at it.” They didn’t bring up that any other people were coming to look at it. They simply said, “Yes, if you could help us find out what is the answer today, we’re ready to commit.” I said, “That’s awesome. Let’s see what we can do.”
We start going through the house and he’s like, “What do you think the price is on this?” I said, “I don’t know yet. Let’s start looking through the house. What are you hoping to get out of it?” He kept going back to, “You guys are the experts. We don’t know what the home’s worth.” I said, “What is it that you guys want out of it? How many siblings are involved?” He says, “There are four of us.” I said, “Are you splitting the money four ways?” He says, “Yes, we’re splitting it up.”
We start going through the house and he says, “By the way, there’s $70,000 worth of liens between probate, back taxes, and things like that are on the home. Other than that, it’s free and clear.” I said, “Let’s start looking at that. What number are you looking at?” He’s like, “We don’t know but we think this home can sell for about $300,000 in here.” I had done my homework before. I had someone on my team that sent it over. I said, “While I’m driving up there, send me what homes are selling for fixed up.” They’re right around $260,000 to $280,000. He was already shooting a little high. I was like, “I may not be the fit because he might expect a lot of money on this.”
After talking to him a little bit more, I was able to say, “I don’t know what I can do. I may not be the best fit but have you considered listing this to the realtor? This can get you your highest and best value out of this.” They’re like, “No. We want to sell and get it done quickly.” After talking to him, I said, “I don’t know if my numbers are even going to be close. You’re saying these homes sell for about $300,000. I don’t know if my team can get $300,000 out of this house when it’s all fixed up. I don’t know if I can do that. Are there other options so that you can get the most out of this home? What is the best thing you can do?”
I sat there and asked the difficult questions. “If I don’t buy this home, what is your next option?” He’s like, “We’re hoping it’s someone like you that can buy it because we don’t want to list it with a realtor.” I’m like, “You know that is the best way to get your highest and best, right?” He says, “Yes, we understand that. We don’t want to wait any longer.” I said, “I don’t know if my number’s going to be good. We buy homes around here for about $120,000 to $150,000. I don’t even know if that does anything for you.”
Instantly, he’s like, “That does nothing for me. I would need to a minimum get $200,000 out of this because I know there needs to be fixed up but this home will sell for $300,000.” I said, “It may or may not. If we fix it up, I don’t think I’ll get $300,000. It sounds like my number’s not even going to be close. What we can do is why don’t you guys grab that notepad on the table and follow me around, walk me around, and I’m going to help you guys. Do you see yourself wanting to fix and flip this?” The brother was like, “I have some time that I can start doing that.” I said, “Grab the notepad and I’m going to tell you what you should fix to get your highest and best on this.” He says, “Let’s do that. I might take the time to fix and flip it.” I’m like, “Perfect. Let’s roll.”
We walked around the house and I said, “Here’s what you want. All these windows are all old windows. A lot of them are broken. You’re going to replace those. The roof looks like it’s in great shape. That doesn’t need to be replaced. The flooring all needs to be replaced.” The carpet was the original carpet back in the ‘70s. I said, “The bathrooms are bad.” When I say bad, it’s bad. The cabinets were broken. The tub surroundings were bad and moldy. I said, “These are going to have to be fixed.”
I said, “All the flooring’s got to be fixed. You’re going to have to paint the whole new house. You’re going to have to do all new cabinets in the kitchen and new countertops.” I said, “If you do these things, this will get you your highest and best price.” He’s like, “I don’t want to do all that work.” That’s when I sat there and said, “What’s your option? What do you want to do?” He’s like, “I’m hoping you’ll bring up your price.” I said, “I can’t.” We went downstairs and we were looking around and you could see that there have been drug use in the house. I had to ask the tough questions.
Many times we shy away from the tough questions. When it comes to drugs, you shy away thinking, “I don’t want to offend these people.” I had such a relationship with these individuals. I had them laughing and smiling. I always add humor into my sales, into my whole presentation. I always try to get them to laugh. I always try to get them to smile. I’m always smiling at them.
I’m sitting there and I said, “Why does my gut tell me that there are drugs in this house and drugs have been done in this house?” The brother instantly said, “No drugs in here.” I sat there quietly. I haven’t said anything. I asked the question and he’s like, “Nope, there wouldn’t be any drugs in here.” The sister comes around the corner and says, “Don’t lie to them. We found those crack pipes a couple of weeks ago.” That’s when I was like, “Help me understand this. You’re saying there are no drugs and she’s saying you found crack pipes.”
I keep telling them, “I may or may not be the fit anyways. I’m trying to help you guys the best way, whether it’s me or someone else.” I said, “If meth and all these other drugs have been done in here, there’s going to have to be some cleanup done now and that can cost you quite a bit. If you fix it up without cleaning it, most retail buyers are now getting that test done. If it comes back positive, they’re going to cancel the contract. Now it’s going to be a house that’s flagged until it gets mitigated and cleaned up.”
He says, “We knew that there was probably meth in here. That’s why we don’t think we want to sell it to a retail buyer.” I said, “Be as honest with me as you can. I know it’s hard to say those things and no one wants to know that there’s meth in their house. Let’s work together. I may not be your buyer or I may be your buyer. I know why my price has to be around the $150,000 zone. I can’t go any higher than that because I know what’s going on in the house.” He says, “We can’t go that low.”
Don’t care about the house. Care about the people. Serve the people.
I said, “You would now need to mitigate any of the drugs. Make sure that’s not in the house. Depending on how bad it is, depending on how bad the cleanup could be, you could do this. You could manage this. There are crews out there that will clean this up.” He says, “I don’t want to manage it. I need to get $180,000.” I’m like, “I can’t give $180,000. What if I could come up to $155,000?” We started going through the question.
Ultimately, because we were able to ask the tough questions, had I not asked him if there were drugs in the house and asked them, “Have you thought about listing this with a realtor?” When he kept pushing off, “No, we don’t want to list it with a realtor. No, we don’t want to do it on the retail market. We want to sell it to an investor.” Something was already telling me to go further and ask some tougher questions. Ultimately, because I was willing to ask the tough questions, the questions about the realtors, the questions about if there are drugs in the home, we were able to get this home on a contract for $160,000.
The home will probably be fixed up and sell anywhere between probably $260,000 to $280,000. Yes, it sounds like there could be drugs in it but we were able to get our price or get him down from $200,000 because we asked the tough questions. Be willing to ask the tough questions so that you can get the deals at your price. Don’t shy away from them. Don’t be afraid of them. Don’t think it’s going to offend them.
If you can add a smile when you ask these questions and almost be like, you’re on their side, “I’m asking this on behalf of I want to serve you. I want to help you.” For most of that deal, I wasn’t even acting as the buyer. I wasn’t even acting as the one interested. I was there genuinely serving them on how they can get the most and the best out of their home.
Because I took the time to serve them and ask the tough questions, I was the one that was able to put the home under contract at our price and it’s going to be us purchasing the home. Going forward, this is something that you need to do. Don’t care about the house. Care about the people. Serve the people. Also, show them, “I may or may not be a fit but I’m here to serve you. I’m here to help you.” If you can do this, you will get more deals.
I hope you guys are safe. I hope you’re well during all this COVID-19. If you need help, you want to jump in and you’re looking for that guidance, you can get out of your way, get your first deal, make money in real estate, and hopefully quit your job. Head on over to WholesalingInc.com where you can then book a call and get well on your way to doing deals of your own. Get on a call with either myself or someone from my team so you can begin to see what it looks like. We would be honored to walk you through, lead and guide you. Thank you so much for being with us. God bless each one of you. We look forward to seeing each one of you on the next episode. Take care.