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!
- The key questions you should ask
- The importance of asking the tough questions
- The questions that will reveal the seller’s true WHY
- The best way to present yourself to sellers
- How to get the price down significantly
- How to put any property under contract at YOUR price
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Hey guys, Cody Hofhine with Wholesaling Inc, the number one wholesaling coaching program in the nation. We are going to deep dive a case study, a deal that I just did last week. My team was down in a place called Lake Powell. My business partner had taken him down there to reward them for an awesome, awesome third quarter. First, second, and third quarter should say where they’re hitting their goals consistently. And so every year, about this time in September, we take them down on the houseboat, down to go team build, but also reward them for just incredible, incredible team play.
So, let’s rock and roll. While they’re away, I had to put the gloves back on and hop in the rings, right? So I’m sitting there in my office, and I have our executive assistant, she comes in, she’s like “Cody, there’s a deal.” I’m like, “Whoa, you’re on phones today?” Because even some of our cold callers, or even people to answer the phone, were down on that trip.
She’s like, “Yeah.” She was like, “I think I’ve got a good one for you.” I said, “Okay, tell me a little bit about it.” And without her even being on that phone that often, she did so many thing right, and I want to point that out. The main questions that she asks, she says, “I really just got some of the details on what the home is, what’s the bed and baths, and I was asking why they’re selling. They’re like, ‘Well, we just want to sell quick. We inherited this from my mom and she passed away and it’s been like many, many months going through probate. It’s been nothing but a headache. And we’re just, we’re done. We want to be out.'”
Now, here’s the beautiful thing: why this works so much. I want you guys to understand this. Be willing to ask the crucial questions or the difficult or tough questions. So many times we shy away from the difficult and tough questions. When she heard this, she still went in and asked some difficult, tough questions, even though they already sounded like, “Hey, I just want to sell. Let’s make this happen.” She says, “Now, 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?
So, 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 just want to be done quick. We don’t want to have to wait 30 days, 60 days, 90 days.” Now they’re coming back and saying, “No, it’s more of a timeframe thing. We just want to be done.” So 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? And it helps you timeframe, it helps you understand if they’re really willing to do a deal and they want to do a deal and they want to make a deal with an investor.
I go out to the house, I tried calling beforehand, she’s like, “Yeah, he said he’d be there for the next two hours.” So, I’m driving up to the home and I’m calling. They’re not answering. I leave a voicemail, and I just show up. I pull up in front of the house. He comes out of the house and he’s like, “Hey, Cody. I got your voicemail,” but never called me back, never texted me, no nothing.
And I went on and said, “Well, how do I help you guys?” 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 it might be a fit where we can buy it, or, 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.” And that was it. You just see this big guard, like almost like a weight off their shoulders. I’m not doing, 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?”
So we go in the home and we start talking about them. Notice I didn’t talk about the home, I didn’t talk about what needed to be fixed up or repaired. I just 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.”
And they’re like “Yeah, and it’s been difficult because it went through probate. She didn’t have it in a trust. And so, by going through probate, it took us six months.” And I’m like, “Ouch.” And then they told us the number that it costs the attorney to do it. It’s just a difficult situation.
So they’re sitting there talking more about it and they’re like, “Man, this was our childhood. This is where we grew up. This is where we lived so many years of our lives. And when we got married, we’d come out here to hang out with our family and hang out with my mom and dad. And this is the place, this is where it all took place.”
And then 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?” And he’s like, “Oh, actually, you know what?” And he takes me to the front room. “See all these homes out here?” I’m like, “Yeah.” He’s all, “That just used to be a field. Me and my dad would go out there and hunt pheasants. It was just awesome that I could just wake up, get out of my bed, go downstairs. And I’m in this huge field full of pheasants, and I could go shoot.” And 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. And what they love to do as children, what they love to do as teenagers. And they just started opening up, sharing the whole story.
And then it got to the home. After we talked for about 30 to 45 minutes about them, and getting to know them and a little bit about the history of the home. We started talking about the home. They’re like, “No, we want to get rid of this, as of like yesterday.” I’m like, “Okay, 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, what is going to go on by the end of this day?” And he’s like, “Yes.”
Now, guys, that’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 really, really good. They didn’t need to wait for 10 offers, 15 offers. Or they would have said, “No, I’ve got three or four other people coming out to look at it.” They didn’t bring up that there was any other people coming to look at it. They just simply said, “Yes. If you could help us find out what is the answer today, we’re ready to commit today.” I said, “That’s awesome. Let’s see what we can do.”
So, we start going through the house and he’s like, “Well, what do you think the price is on this?” I said, “I don’t know yet. Let’s start looking through the house.” I said, “But what are you hoping to get out of it?” And he kept going back to, “Well, no, you guys are kind of the experts. We really don’t know what the home’s worth.” I said, “Okay.” I said, “What is it that you guys want out of it? How many siblings are involved?” And he says, “Well, there’s four of us.” I said, “Okay. So are you splitting this up? The money, four ways?” He says, “Yeah. We’re splitting it up.”
So we start going through the house and he says, “Oh, by the way, there’s like $70,000 worth of liens between probate and back taxes and things like that are on the home. Other than that, it’s free and clear.” I said, “Okay, let’s start looking at that. So 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.” Now, I had done my homework before I had someone on my team that sent over. I said, “Hey, while I’m driving up there, send me what homes are selling for fixed up.” And they’re right around $260 to $280. He was already shooting a little high. So 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 just say, “Hey, 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 really want to sell quick and get it done quick.” After talking to him, I said, “I don’t know if my numbers even get you close, because you’re saying these homes sell for about $300. I don’t know if my team can get 300 out of this house when it’s all fixed up, so I just don’t know if I can do that. So what are there other options so that you can get the most out of this home? What is the best thing you can do?” And I just sat there, asked the difficult question, asked the hard questions. “If I don’t buy this home, what is your next option?”
He’s like, “Well, we’re hoping it’s you, we’re hoping it’s someone like you that can buy it because we don’t want to list it with a realtor.” And I’m like, “But you know that is the best way to get your highest and best, right?” And he says, “Yeah, we understand that. We just don’t want to wait any longer. I said, “Okay. I said, I don’t know if my number’s going to be good.”
I said, “We buy homes around here for about $120 to $150. I just don’t even know if that does anything for you.” And instantly, “He’s like, “No, that does nothing for me. I would need to minimum get $200,000 out of this because I know there needs to be fix 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. But, what we can do, 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, “Yeah, I have some time that I can start doing that.” I said, “Okay, okay. Grab the notepad, and I’m going to tell you what you should fix to get your highest and best on this.” And he says, “Okay, let’s do that because I might take the time to fix and flip it.” I’m like, “Perfect. Let’s roll.”
So, we walked around the house. I said, “Here’s what you want.” I said, “All these windows, they’re all old windows. A lot of them are broken. You’re going to replace those.” I said, “The roof looks like it’s in great shape. That doesn’t need to a replace.” I said, “The flooring all needs a replace.” The carpet was the original carpet, back in the 70s. I said, “The bathrooms are really bad.” When I say bad, really, really, really bad. The cabinets were broken. The tub surrounds were really, really bad and moldy. And 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 all new cabinets in the kitchen and new countertops.”
I said, “If you’ll do these things, this will get you your highest and best price.” And he’s like, “Well, I don’t want to do all that work.” And so that’s when I sat there and said, “So what’s your option? What do you want to do?” He’s all, ” [inaudible 00:10:26] I’m hoping you’ll just bring up your price.” I said, “I can’t.” So we went downstairs and were looking around and you could see that there have been drug use in the house.
And so I had to ask the tough questions. I think so many times we shy away from the tough questions. And when it comes to drugs, you really shy away thinking I don’t want to offend these people, but I had such a relationship with these individuals had them laughing, having smiling. So I always add humor into my sales, into my whole entire presentation. I always try to get them to laugh, always trying to get them to smile. I’m always smiling at them.
And so I’m sitting there and I said, “Tough question.” I said, “Man, why does my gut tell me that there’s drugs in this house and drugs have been done in this house?” The brother instantly said, “Nope, no drugs in here. There are no [inaudible 00:11:10] drugs in here.” The sister, however… And I just sat there quiet. I haven’t said anything. I just asked the question, he’s all, “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’s no drugs, she’s saying we found crack pipes. Just help me understand. Guys, I may or may not,” and I keep telling them, “I may or may not be the fit anyways. So, I’m just trying to help you guys the best way, whether it’s me or someone else.” I said, “But if meth and all these other drugs have been done in here, there’s going to have to be some cleanup done now.”
I said, “And that can cost you quite a bit. And if you fix it up without cleaning it, most retail buyers are now getting that test done. And if it comes back positive, they’re going to cancel the contract. And now it’s going to be basically a house that’s flagged, until it gets mitigated and cleaned up.” And he says, “Yeah, I mean, I guess we kind of knew that there was probably meth in here. And so that’s why we don’t think we want to sell it to a retail buyer.”
And I said, “Okay.” I said, “Again, guys, 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, but let’s work together because I may not be your buyer, I may be your buyer.” I said, “But, now knowing that, now I know why my price has to be around the $150 zone. I can’t go any higher than that because I know what’s going on in the house.” And he says, “Yeah, we can’t go that low.”
And I said, “So here’s the thing. You would now need to mitigate any of the drugs, make sure that that’s not in the house.” And I said, “Depending on how bad it is, depends on how bad the cleanup could be.” I said, “But you could do this. You could manage this. There’s crews out there that will clean this up.” And he says, “I don’t want to manage it. I just need to $180.” And I’m like, “I can’t give $180, but what if I could come up to like $155?” And we started going through the question.
Ultimately, guys, because we were able to ask the tough questions, had I not asked him if there were drugs in the house and ask him that, “Hey, have you thought about listing this with a realtor?” And when he kept pushing off, like, “No, we don’t want to list it with a realtor. No, we don’t want to do it on the retail market. We just want to sell it to investor.” Something was already telling me, “Go further, ask some more tougher questions.” Ultimately, guys, because I was willing to ask the tough questions, the questions about the realtors, the questions about if there’s drugs in the home, we were ultimately able to get this home on a contract for $160,000.
Now the home will probably, fixed up, sell anywhere between probably $260 to $280. And 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 like the buyer. I wasn’t even acting like the one interested. I was just there genuinely serving them on how they can get the most and the best out of their home. But 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.
So this is something, going forward, that you need to do. Don’t care about the house, care about the people, serve the people and 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. And if you need help, you’re wanting 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. And we would be honored to walk you through, lead and guide you.
Thank you so much for being with us, guys. God bless each one of you, and we look forward to seeing each one of you on the next episode. Take care.