What is that magic ingredient that gets a private investor for real estate to say “YES?”
Patrick Riddle of Private Money Blueprint raised over $2 million during the recession.
Maybe you mentioned your private lending program to someone. They were enthusiastic about it.
They said, “Sure, I loved to hear about these opportunities.”
But when the time came and you called them up, what typically happens?
Did they find the deal?
Often time not.
Why not?
What is that magic ingredient that gets your prospects to “YES?”
Robert Cialdini wrote in his classic book Influence the Psychology of Persuasion, “Human beings are far more motivated by the potential of lost than by potential the gain.”
What does this mean?
It is the principal of scarcity. So how can we use this information in our real estate investment businesses?
2 Ways To Use Scarcity with Sellers, Buyers, and Private Money Lenders
- Limit the time.
- Limit the number.
Any offer that you make with a seller, there is going to be certain time that your offer expires. Make sure to press during negotiations that once that time frame expires, the offer is no good and no longer on the table.
Make it scarce. Take it away.
With a seller you could say, “Mr. Seller, just want you to know that we are only going to be buying one or two more properties this month.
“So if you call back next week and we have made our goal, we may let you know that we can no longer buy your property. Just want you to know that, so the sooner you let us know, the better.”
How can you use the principal of scarcity with buyers?
You all have heard this before, but have you ever done it?
Have all potential buyers view the property at the same time. It isn’t easy thing to do. But that’s what we are doing here the principal of scarcity, because your house become the scarce resource.
Give it a try.
Put your marketing plan together and then as the leads come in for a week or two, however long you want to wait. Set up a time schedule. Tell all your leads that you can show the property between 9:30 and 10 am Saturday morning. Have 10 people show up and watch the principal of scarcity do it’s magic.
What about a private investor for real estate?
Use a time limit.
When you are following up with your prospects, you could say, “Well Ms. Private Money Prospect I want you to know that this great investment opportunity here. We are going to have someone on this deal to find it. We are going to have an investor to line up to find this by next Wednesday. So if you interest you want it to let us soon.”
Use a number limit.
You could say, “Ms. Private Money Prospect, we’re only looking for less than five highly qualified private lenders to bring in our company. So once we have added them to our team we will close out this opportunity.”
So that is how you use the principal of scarcity with buyers, sellers, and private money lenders.
If your interested in multi-family investing check out my new video.
Here’s the link: http://www.InvestmentRealEstateCorner.com/go/irec-get2yespost-get-the-money/
Let me know it how works out for you.
About the Author: Patrick Riddle is co-founder of Private Money Blueprint. He explains that success is not typical becomes it involves hard work most people won’t do.