The Three-Pillar Framework That Destroys Investor Fear

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We explore how to build confidence to make real estate investment offers without fear by understanding the neuroscience behind offer anxiety and implementing a three-pillar system for success.

• Making offers activates the same fight-or-flight response in our brains as physical threats
• Experienced investors have rewired their brains through repeated exposure
• The three-pillar system begins with knowing your numbers cold
• Breaking properties into 39 different components for accurate cost estimation
• Investors using detailed checklists close 40% more deals than those using rough estimates
• "Lipstick properties" (simple cosmetic rehabs) give new investors a 78% higher success rate
• Cosmetic rehabs have a 12% margin of error versus 35% for full renovations
• The Safe Offer Cap formula removes emotion from the equation
• Investors using conservative formulas make 3.4 times more offers and close 2.7 times more deals
• Every offer reduces anxiety by about 15%
• Most investors report no fear response by their 8th or 9th offer
• Successful investors typically make 10-12 offers before landing their first deal
• Even experienced investors still feel nervous when signing contracts

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Episode Transcript

Ed Mathews (00:00):
Data shows investors who begin with simple cosmetic
rehabs have a 78% higher successrate in their first project and
if you think about it, thatmakes a ton of sense Building
confidence through smaller,quick wins.
Ever sat in your car scrollingthrough Zillow and thought, man,
if I just knew where to start Icould flip one of these.

(00:21):
Yeah, I've been there too.
Most people who want to fliphouses never even start, not
because they're lazy, butbecause they don't have the
blueprint.
Well, that changes today.
If you give me five minutes,I'll give you real world
flipping strategies thatactually work.
No fluff, no theories, nogatekeeping, just real how-to

(00:41):
information for you to applytoday.
Welcome back to Demo, toDollars, your no BS flipping
playbook.
One tip at a time Before wedive in.
I've got someone I want tointroduce.
That voice you're about to hearthat's my new co-host, jess.
She's been my friend for yearsand my partner on more projects
than I can count.
She knows this business insideand out and I'm fired up that

(01:06):
she'll be joining us from timeto time on the show.
Welcome, jess.

Jess Carter (01:09):
Thanks, Ed.
I'm excited to be here andshare what I've learned right
alongside you.

Ed Mathews (01:14):
All right, let's get into today's topic how to build
confidence to make offerswithout fear.
Making offers on real estatedeals terrifies most new
investors more than publicspeaking or skydiving.
But here's the twist that fearhas very little to do with money
.

Jess Carter (01:31):
And you know what's fascinating about that?
The physiological response isnearly identical to those other
fear triggers.
The brain actually can't tellthe difference between
submitting an offer on theproperty and facing a physical
threat.
Studies show it activates theexact same fight or flight
response in our amygdala.
So we're essentially dealingwith primitive survival

(01:52):
instincts when we're just tryingto do a business transaction.

Ed Mathews (01:55):
Exactly right.
And here's where it getsinteresting.
Research shows that experiencedinvestors have literally
rewired their brains throughrepeated exposure.
Their amygdala response ismeasurably lower when making
offers.

Jess Carter (02:09):
So what's the practical approach to rewiring
our own brains and building thatconfidence?

Ed Mathews (02:13):
Well, it starts with something I call the
three-pillar system.
First, you need to know yournumbers.
Cold Studies show thatinvestors who can estimate
renovation costs within 5%accuracy are three times more
likely to pull the trigger ondeals.

Jess Carter (02:27):
I agree.
You know it's fascinatingSuccessful investors break
properties into 25 or socomponents.
We break ours down even further, into 39 different elements.

Ed Mathews (02:38):
Yep, everything from roofing at $4.50 per square
foot to kitchen remodelsaveraging $12,000 for a basic
package.
And here's the key data pointInvestors who use detailed
checklists close 40% more dealsthan those who rely on rough
estimates.
It's about removing all thoselittle question marks that feed
the fair response.

Jess Carter (02:59):
That reminds me of something interesting.
When I see someone strugglingwith offer hesitation, it almost
always is caused by decisionfatigue.

Ed Mathews (03:07):
Exactly right.
And that leads us to the secondpillar, starting with what we
call lipstick properties.

Jess Carter (03:14):
Right.
Data shows investors who beginwith simple cosmetic rehabs have
a 78% higher success rate intheir first project and if you
think about it, that makes a tonof sense Building confidence
through smaller, quick wins.

Ed Mathews (03:29):
The numbers back that up too.
The average cosmetic rehab hasa 12% margin of error on
estimates, compared to 35% forfull renovations, and it's just
easier to get it right whenyou're dealing with predictable
costs.

Jess Carter (03:42):
And that success rate compounds over time.

Ed Mathews (03:45):
Yep, absolutely.
The data is crystal clearInvestors who complete three
successful cosmetic flips showan 89% reduction in offer
anxiety when tackling largerprojects.

Jess Carter (03:56):
So what's that crucial third pillar you
mentioned?

Ed Mathews (03:59):
It's called the safe offer cap.
It's a mathematical approachthat removes emotion from the
equation.
You take the after repair value, subtract renovation costs,
your fixed costs and yourminimum profit, and that gives
you your maximal offer price.
And playing the gameconservatively using that
formula really helps overcomethe psychological barriers,
especially with your first fewprojects.

(04:20):
You know it's remarkableInvestors using a conservative
formula, like the SOC, make 3.4times more offers than those who
go with their gut.
And here's the kicker theyactually close more deals too,
about 2.7 times as many.

Jess Carter (04:34):
You know what's fascinating about all this?
It's how the psychological andpractical elements are so
intertwined.

Ed Mathews (04:41):
Right on.
That's the momentum effect.
Every offer you make reducesanxiety by about 15%, according
to our research.
By your eighth or ninth offer,most investors report absolutely
no fear response whatsoever.

Jess Carter (04:55):
Well, hopefully, that should be incredibly
encouraging for anyone juststarting out, knowing there's
actually a light at the end ofthe tunnel.
One thing I'd like to add toreally drive it home for you out
there Successful investors make10 to 12 offers before ever
landing their first deal.
This is a numbers game.
It's not about being fearless.
It's about taking actiondespite the fear.

Ed Mathews (05:18):
Yep, even after all these years, my hand still
shakes every time I sign acontract and it's supposed to.
You're taking on a bigresponsibility.

Jess Carter (05:27):
Even the most experienced investors started
out exactly where you are rightnow.

Ed Mathews (05:33):
You know, at the end of the day, confidence isn't
something you wait for.
It's something you buildthrough consistent action.
Every offer you make isliterally rewiring your brain
for success.

Jess Carter (05:46):
And that might be the most powerful takeaway of
all that fear isn't something toovercome, but rather a signal
that you're growing.

Ed Mathews (05:53):
Well said, Jess.
I guarantee you 100% ofsuccessful investors felt the
exact same fear at the start.
The only difference they madethe offer anyway.
Well, that does it for today'sepisode.
Nice working with you, Jess.

Jess Carter (06:08):
Yeah, that was fun.
Thanks for listening, and don'tforget to follow us so you
don't miss an episode.

Ed Mathews (06:14):
Thanks for listening to Demo to Dollars.
If today's episode helped youmove one step closer to your
first or next deal, do me afavor follow us wherever you get
your podcasts so you never missa show.
I'm grateful to be part of yourjourney.
Now get out there and getcracking Bye for now,