October 19, 2023 • 21 mins
Hi This is Brad Weisman - Click Here to Send Me a Text Message
Grit, determination and a little bit of luck – that's what it took for our guest, Tom Zeeb, to break free from a 9 to 5 grind and dive headfirst into the world of real estate investing. Tom, will take you on the roller-coaster ride of his life, from a terrifying, near-death experience white water rafting, to being neck-deep in debt, and finally, to now, where he's a successful real estate investor. It's a journey that was inspired by a book (Rich Dad, Poor Dad), a six-unit investment gone wrong, and a whole lot of courage.
Buckle up because this isn't just a story of overcoming adversity. It's also a masterclass on the art of negotiation. Tom shares with us his top three real estate negotiation techniques that have been instrumental in his journey. He'll reveal the secret behind the "flinch" technique, the art of "bracketing” and the importance of "engineering the middle" to achieve the best possible outcomes.
Tom shares with Brad a treasure trove of insights that can help you master marketing, negotiation, and contract understanding – the three pillars of real estate investing. And if you want more of Tom's wisdom, don’t forget to check out his website or tune in to his podcast. www.tomzeeb.com
#tomzeeb #bradweisman #thebradweismanshow #realestate #realestatenegotiation
We know self tanners. We love self tanners. To us, self-tanner for men are a necessary part of life. You see a pale dude on the street and he looks like a fish out of water. It's a real problem, bro. But this exact passion for self-tanner is why Bro Glo is so rad.
Brad Weisman has been a Realtor since 1992 and proudly sponsors this podcast!
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Welcome to The Brad Weisman Show, where we dive into the world of real estate, real life, and everything in between with your host, Brad Weisman! 🎙️ Join us for candid conversations, laughter, and a fresh take on the real world. Get ready to explore the ups and downs of life with a side of humor. From property to personality, we've got it all covered. Tune in, laugh along, and let's get real! 🏡🌟 #TheBradWeismanShow #RealEstateRealLife
Credits - The music for my podcast was written and performed by Jeff Miller.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Hello, this is Brad Wiseman.
You're listening to Real Estateand you We've got a guest here
for you, like we always do.
A good real estate guest here,coming straight from Sarasota,
florida.
He was in Washington, he was inBuffalo God, he came from snow
and went to Florida.
What a smart guy he is.
His name is Tom Zeib.
We're gonna bring him on rightnow and he's gonna talk to us a
(00:22):
little bit about getting yourinvestment game together.
And, tom, how are you doingtoday?
Speaker 2 (00:28):
I'm doing great, Brad .
Speaker 1 (00:29):
Good to see you Good to see you too, man.
So you the thing that's funnywhen you were telling me before
we started recording, you wentfrom Buffalo to Florida, or was
it DC to Florida?
Speaker 2 (00:38):
Buffalo, DC, Florida.
I've been working my way south.
Speaker 1 (00:41):
Working my way south.
That's pretty funny.
That's pretty funny because youknow the difference between
Buffalo and Florida is a worldof difference.
I mean, you're talking two tothree feet of snow at a time,
probably even more than that,whereas in Florida you know you
got hurricanes and stuff, butyou're never seeing the white
stuff down there.
Speaker 2 (01:00):
No no, I'll tell you, though, sarasota feels like,
feels like Buffalo.
I can say Buffalo on the beach,buffalo is on the water, but it
feels like Buffalo in warmweather.
There's a lot of buffalooniansdown here.
I feel like I'm home.
Speaker 1 (01:12):
Oh, that's awesome, Very cool.
So you came to my attentionhere.
I get a lot of requests to beon the show now, which is great.
I feel very blessed to havethat.
But the thing that stood outwas the first sentence of the
first line of your bio, and itsaid that a near-death
experience while whitewaterrafting pushed you to find a new
(01:34):
way to break free of your nineto five job.
What a wake-up call.
But you had to get like what,hit by a rock underneath the
water to get this wake-up call.
Tell me what happened there.
Speaker 2 (01:45):
Well, I've got a really hard head, so it takes a
lot to finally, you know, getthrough to me.
It was an awakening.
All right, maybe a rudeawakening, but here's what
happened in a nutshell.
I had.
I was a few years out ofcollege.
This is 2001.
I had a day job that I wasstarting to get sick and tired
of.
You know, the commute was bad.
(02:05):
You get tired of taking ordersfrom the boss and the colleagues
are all over the map.
And no matter how hard you work, or how literally you work,
you're making the same amount ofmoney.
So the whole thing starts tofeel kind of pointless after a
while and I wanted somethingdifferent, but I didn't know how
.
Then I was a exceptionallyfiscally irresponsible and I had
(02:26):
worked myself into a massivefinancial hole of about 113
grand in debt.
Wow, you know college debt andrevolving credit debt and, just
you know, spending far more thanI had, which is, I guess,
that's the American dream, atleast that's what they tell you,
right?
Speaker 1 (02:40):
Yeah, exactly.
Speaker 2 (02:42):
You should actually be able to fund it.
So I did the only logical thingI ignored it all and pure
escapism.
I went on a giant adventuretrip with my buddies to India
Wow, and as one does.
And we went way water raftingand it was great fun because I
was away from all my problems,away from all my debt, felt like
I didn't have a care in theworld.
(03:02):
I mean, all that stuff was kindof waiting for me in the
background.
But then we went through a verydifficult class five rapid and
I couldn't quite stay on theboat, couldn't stay on the raft,
and I got so excited, and isn'tthat the idea?
And I found myself.
Oh, man so you actually wentoff the side.
I would have gone, I would haveside down and Wow.
Speaker 1 (03:22):
So what was your first thought when you hit the
water?
Oh crap.
Speaker 2 (03:26):
That wasn't good.
I remembered every last secondof it and I, slowly, I was
trying not to lose the ore I had.
I was trying not to lose theshoe I had on that was my
buddy's shoe and then I wasstarting to go hey, I really
need to breathe.
Breathing would be a reallynice thing.
That's very important, yeah,those small details.
(03:48):
And instead of getting kind ofnervous and scared, I started
getting angry, because suddenlyI realized what I had done.
All I was doing was escapingfrom the daily hell that I
didn't like, but it wasn'tmaking anythings any better, it
was just getting worse, and so Iswore to myself.
Then I said I get out of this.
Things are going to bedifferent, I'm going to come to
the surface, I'm going to changemy life and I'm going to make
(04:09):
things better and I'm going topay off all this debt.
But the crazy thing was Icouldn't figure out how.
I mean, what was I going to do?
Speaker 1 (04:17):
Yeah.
Speaker 2 (04:18):
I got out of the water, I got back home.
I had no more vacation timeleft.
I was now $113,000 in debt,still plus the cost of the trip,
so even deeper, and I had noclue what to do.
Speaker 1 (04:29):
Yeah Now.
Were you doing real estate atall or any investments at all
when you were in debt?
Speaker 2 (04:35):
Nope, didn't even own my own house.
I was an apartment dweller.
Speaker 1 (04:39):
Wow, amazing.
So tell me this so you get donewith that.
And then it says here you hadmentioned here that the first
deal that you did almost tookyou under, so you had this
sinking effect in the first partof your career here.
Speaker 2 (04:53):
All I ever did was drown at the beginning.
You know, financially,realistically, metaphorically,
it didn't matter.
I was always drowning.
Yeah, I bought a six unitbuilding because I had read a.
I didn't own anything, didn'town my own apartment.
But when I, a friend of minehad hand me a copy of Rich Dad,
poor Dad, I love that book,great book, yep, awesome, it's
(05:17):
awesome.
Except it doesn't give you anyhow to, it just tells you what.
Right.
So I understood.
I had the same frustrations Ihad when I was drowning, but now
they were answered just by realestate.
All right, fantastic.
So, having nothing but thatbook, I went out and bought a
six unit building in New YorkCity, landlord friendly, new
York City.
Oh my gosh, we could possiblygo wrong.
Speaker 1 (05:38):
Oh, yeah, so a six unit.
New York City is a.
Definitely if you're.
You talk about jumping right in, that's jumping right in
because there's a lot that goeson in New York City.
Speaker 2 (05:49):
Yeah, and I would call that kind of jumping in
class Lee stupid and I wasdefinitely class Lee stupid back
then and what wound uphappening was I had six very
professional tenants atprofessional, meaning they knew
how to game the system, play thesystem and live in my place
without paying a penny.
Cause I guess my due diligencewasn't very good.
Maybe it wasn't really, I wasjust so desperate to have a deal
(06:12):
and now I was drowning again,this time having to pay a
mortgage on a property that Ireally couldn't afford.
But you know, back then theywere giving anybody mortgages
and I was one of those anybody's.
I can't, you know, I can'timagine why things melted down
in 2000.
Speaker 1 (06:28):
Yeah, oh, that's a whole different show, whole
different show.
Yeah, yeah, amazing.
So you go from that.
So what?
What made you learn?
What did, did?
Did you have an epiphany, did?
All of a sudden you readanother book and that made it
happen.
I mean, how did you get fromthe failing six unit New York
City to the next step of beingnow successful or starting to
(06:48):
feel successful?
Speaker 2 (06:51):
Well, when I was falling behind on it, I had, I
had, I bought the, bought thedeal with my sister, and so my
sister and I were partners on it, and one of the tenants took my
sister's head and smacked itinto the wall which was trying
to collect some rent.
At which point I said yeah, youknow what, tracy, we're done?
Let's just, let's just walkaway and leave this.
We must have screwed somethingup.
(07:13):
So I'm like, well, what did wemess up so bad?
Oh, meanwhile, during all thattime when we're falling, we were
going in the pre foreclosure onthis, where we're not paying
yet.
Everything's a mess.
I found my local real estateinvestors association and I
walked into a room full ofpeople actually rehabbing
properties, actually landloading properties successfully,
and then these weird peoplecalled wholesalers that I had no
(07:33):
idea what they did, but Irealized I needed to focus
closer to home.
I was, I was.
I said there's got to be a way.
I just did something wrong.
I need to figure this out.
And so I I started marketingand got another property on the
contract that I thought I wasno-transcript Because somebody
offered to buy the contract offof me.
Yeah, have me wholesale, eventhough I didn't know what that
(07:55):
word meant.
Yep, and at that point I walkedaway with a pretty large check
and I went, oh, wow, if I couldjust do this again and again.
I mean they paid me almost$23,000.
Speaker 1 (08:06):
So what year was that ?
2001.
, OK, yeah, ok got it.
So because that times were alittle different then and that's
when things started to build up.
I mean, 2001 up until 2008 waspretty awesome.
I mean, the values kept goingup.
So therefore the wholesalething made sense, because people
, you were buying a property, itwas appreciating after you
(08:29):
bought it, and then you werebasically assigning it over to
somebody else and then you'repulling the cash in between,
which is it's a great way tomake some money.
Speaker 2 (08:37):
It got me out of debt .
Speaker 1 (08:38):
There you go, it worked, it works.
So now, what is your mainsource of investing today?
Are you still doing thewholesaling or are you doing
something different?
What are you training on?
Speaker 2 (08:48):
I'm still basically 80% 85% wholesaler.
It fits my personality type.
I love marketing, defined deals.
I love negotiating and makedeals.
I really love negotiating.
And then I don't particularlylove managing tenants.
I don't particularly loverehabbing.
I do some, but I don't love itas much.
(09:09):
So that's just beautiful.
Speaker 1 (09:12):
Explain for the audience.
What does the wholesaling mean?
How does that work?
Speaker 2 (09:20):
So everyone knows what rehabbing is right.
You find a property andnegotiate, you put it in the
contract, you fix it up, yourehab it, you resell it.
Well, wholesaling I go, I markit for the property.
So I find it, I startnegotiating it, I put it under
contract.
But now, instead of me going tosettlement and then doing the
rehab myself and eventuallyreselling before settlement, I
(09:43):
sell it to someone who wants todo all of that and I assign my
position in the contract.
So I'm not actually selling aproperty, I'm selling my
contract, my position in thecontract.
I sell that for a fee tosomebody else who wants to take
over.
They're the ones that settle onit.
Then they go and do the rehabor they go and do the land
lowering.
Speaker 1 (10:03):
And it's called assignment.
Here too, again, I get anotherterm for it.
They call it assignment inPennsylvania.
It's actually legal inPennsylvania to do it.
The wholesaling has become awhole new term that people are
using.
The thing that I guess mostpeople say then at that point is
well, what does the seller say?
You're sitting there andgrabbing money that they could
have made if they would havesold it for more.
I mean, do you have that kindof pushback?
Speaker 2 (10:25):
You know what the seller says to me every single
time.
Thank you, tom.
Thank you for solving myproblem.
Thank you for making this easy.
Thank you for getting me out ofthis issue, because I'm
marketing for people who haveproblems, so maybe listing it
isn't their best option.
Maybe they don't want to listit, maybe it's so messed up.
They're not buying a rundown,dilapidated house and it needs
work.
There's an issue either withthe property or with them.
(10:48):
They are thankful for me.
They know, I've made money onthe process.
They expect that, just like youexpect a licensed agent to make
6%.
Why would you begrudge me formaking any money?
Absolutely, if I'm solving yourproblem.
Speaker 1 (11:02):
No, it makes sense, and you know what's funny about
that too.
Somebody was going to flip it.
It's just not going to be you,and the person obviously that
buys it from you during theirwholesale actually feels that
there's enough equity or enoughmoney still left in there that
after you got your cut, they canactually fix it up and still
sell it for money and make somemoney or rent it out.
Speaker 2 (11:24):
Yes, and that's because I work my numbers
backwards.
I figure out what they want tobuy it for first.
I know how rehabbers think Iknow what they want to buy it.
So if they were marketing forit directly, I know what number
they would go for.
So I know that if I want awholesale to them, I got to sell
it to them at their number,which means I need to negotiate
better than that to create aspread for me.
(11:44):
I don't try to take, I don'ttry to take meat off of their
side of the bone, right, or Idon't take food off of their
side of the plate.
I make sure they're gettingexactly what they want and then
I work it with the seller sothat I'm getting it for less.
Speaker 1 (11:57):
Yeah, no, it makes sense and I'll tell you it's a
big thing out there.
So that's what you're.
So, when you talk about yourtraction real estate mentor,
what are you doing in that?
What, what, what happens withthat program that you're running
?
Speaker 2 (12:11):
Yeah so program I use to teach investors of all
levels Some are beginners, someare intermediate, some are
advanced to realize they'vemessed up their lifestyle
somewhere along the way.
They're not happy with theirbusiness.
I hope I'm retool it, but byfocus.
But all three levels of peopleget, intermediate or advanced.
I focus on three things.
We've got to focus on marketing.
You got to learn how to finddeals.
(12:31):
Find the right kind ofmotivated sellers who need to
sell the property even more thanthey want to sell it, because
that actually sets us up for abetter negotiation.
Which is part two, which ismaking it into a deal, taking a
lukewarm lead and turning itinto a red hot deal by
pinpointing the problem,packaging up a solution that
would fix their problem and thenpersuading them to say yes.
(12:53):
And then the third thing yougotta know how to get paid.
You know how do you put it onthe contract, navigate it
through till settlement andwholesale it during that process
.
If that's what you choose as anexit strategy but I have
students that do anything as anexit strategy the exit strategy
doesn't matter.
I teach the inbound side of it.
So if you want a wholesale oryou want to buy and hold.
You want to rehab, you want todo commercial, it doesn't matter
.
Those are exit strategies.
(13:14):
You still need the market tofind them, negotiate to make
them and understand how tonavigate it through the
settlement.
Speaker 1 (13:19):
And you know what's funny about that.
We always say that the money'smade during the purchase, not
during the sale, and that is sotrue.
In investing, you know itreally is.
It's very true.
And like, if you buy it at thewrong price, you can do anything
you want, you're not gonna beable to make any money.
You know it's just, it's theway it works, but so that's what
you're doing.
So the thing that I thought wasreally cool and we talked about
this a little bit before wewent on the recording here was
(13:41):
that you are actually marketingyourself to the intermediate
investor and the expert investor, because there's times where
you get involved, just like youdid.
You bought a six unit, didn'twork out so well, you thought
you were an investor at thatmoment, but there's people that
do it and then it goes bad.
So you're there, you have acompany and a system that you
(14:02):
use to get them to be profitable, to market them correctly, and
all those things.
That's what I think isdifferent about what you're
offering.
Speaker 2 (14:08):
Yeah, I find a lot of people feel trapped by the
business they created so great.
They've done a few deals, orthey do a bunch of deals, or
they've been in business for anumber of years but they're not
actually happy with theirlifestyle Because they've made a
wrong turn somewhere and,instead of having their business
create the freedom for themthat they really want, they wind
up encapsulated and trapped bytheir business.
So, yeah, they're off on theirown great, but they own their
(14:31):
own jail cell, but it's stilljail.
So I work with a lot of peopleto kind of retool their business
, to put themselves at thecenter, wrap the business around
their personal goals ratherthan their personal goals around
their business.
Speaker 1 (14:44):
Yeah, amazing.
Let's talk about your podcast.
You have a podcast called theArt and Science of Real Estate
Negotiation.
So you're big on negotiation.
That's the big part ofpurchasing it right At the right
price.
Love it, yeah, love it, so tellme some of your negotiation
tips.
Speaker 2 (14:59):
Sure, here I'll give you a few.
I'll give you my top three.
Speaker 1 (15:02):
No, here we go.
All right, write this down ifyou go, if I already have it.
Speaker 2 (15:07):
Yeah, exactly, here we go.
So.
Speaker 1 (15:09):
Brad say a number 100,000.
Speaker 2 (15:13):
Woo 100,000.
That's a lot yeah you'relaughing, so how do you feel
about your number right now?
Not good not good, Not good,not good.
Why not?
Speaker 1 (15:25):
Because you made a face and an expression that
makes me think I have the wrongnumber.
Speaker 2 (15:31):
Exactly yeah no.
How could you possibly have thewrong number?
I just said say a number.
I didn't say a price or a caror a house or a boat or anything
, Just say a number.
And you feel uncomfortableabout your own number.
So that technique I made, thatreaction which you can both see
the reaction and you're able tohear it.
So it doesn't matter if we'reon a video phone or regular
phone or face to face.
That's called a flinch.
(15:52):
So every time you hear a number, any number whatsoever, flinch
because you put the exactthoughts that you had into
someone else's head.
They start questioning theirown number.
Speaker 1 (16:03):
Oh, I love that.
That's good.
I like that one.
I'm going to have to startpracticing the flinch.
Speaker 2 (16:08):
Yeah, each and every time.
Second thing I would say to dois I call it bracketing.
So where do we tend to meet?
Where's the most fairer placefor you and me to meet my office
?
Ok, fine, in the office it'sfair for me that would be given
all the way to you.
What's more?
Speaker 1 (16:25):
fair At your house or at your property.
Speaker 2 (16:29):
No, that's, that's.
That's too much on my side.
What's the fair spot coffeeshop?
Ok, a coffee shop in the middle, yeah, yeah, people tend to
meet in the middle.
In the middle just feels fairto people.
So what bracketing does isengineer the middle to be
exactly where I need it to be.
So let's say I don't know.
Let's say I got to get aproperty for $150,000 at all.
(16:51):
$150,000 all make money, great.
Well, if I asked them how muchthey want for the property, they
say 200.
I say I flinch right, 200.
That's a lot, right, butthey're $50,000 above where I
need in the B.
So to create a bracket, so thatthat's the middle, I've got to
go $50,000 below.
Interesting Got it so that waywe're going to meet in the
(17:13):
middle.
Most prices move towards themiddle.
It just seems fair and honestthat way.
So we I want to engineer whereit is You're creating the middle
, you're creating the middle.
Got it when I need it to be?
Yeah, but I'm going to go onestep further by my technique.
Number three I would neveroffer $100,000 on that property.
I would, though, offer you103,579.
(17:35):
A weird number.
Because it is a weird number.
What do you think about thatnumber?
Speaker 1 (17:41):
103,579.
Speaker 2 (17:43):
That's more than what .
Yeah, that's more.
It's a little bit more.
Yeah, it's a little bit morethan the middle.
Speaker 1 (17:48):
But now you got me intrigued.
Now you have Hugo involved.
Yeah, now I'm intrigued.
Speaker 2 (17:53):
Hugo's intrigued.
You're intrigued by it.
You're thinking well, he reallythought that through, must be.
You know, this guy knows whathe's doing on it.
Because why?
Because it was a specific,unique number.
That is intriguing.
So don't just make a flat offer.
I wouldn't make a hundredthousand, but I say 103,579.
I'm still effectively 50 below,but now you're going wow, this
(18:13):
guy's really thinking throughhis thoughts.
He must really know something.
Yeah, he's serious about that.
So always use a specific number.
Those three negotiationtechniques I use and I've got 52
different techniques I usethat's awesome.
Those three I use absolutelyevery single negotiation because
they're powerful and all yourlisteners can be using those
right now and watch what happens.
Speaker 1 (18:33):
Yeah, no, I love it.
That's good information, man,Really good.
So before we wrap this thing upand you have to let me know if
there's anything that you wantto cover besides that but before
we wrap this up, I also want totalk.
You have books out there too.
Tell us about the books thatyou have.
Speaker 2 (18:45):
I do.
I have a book called how toCorrectly Flip Houses for a
Profit.
So this walks you through myentire model of what does it
take on the marketing end andthe negotiation end and the
getting paid side right thatcontracts, control and getting
paid.
I bring you through the wholeprocess.
It's a very accessible read.
I didn't write War and Peace.
(19:05):
It's designed so that you cankind of read it quickly and
understand what's happening.
Speaker 1 (19:09):
Awesome, Awesome.
Well, that's really good.
Is there anything else youwanted to cover on the podcast
here that you want to get out toto the bubble?
I know you said Tom Zeeb,that's.
Zeebcom is the is the websiteto send people to.
What else do you want to say?
Speaker 2 (19:22):
Tom Zeebcom is for the entire podcast Podcasts that
focuses specifically onnegotiations.
So if you enjoy those tips, Ithink you'll find a lot more
that you enjoy, and you can goto tractionrealestatementorscom
as well and find out more aboutthe program, and there's a lot
of training videos there as wellabout a lot of the different
mindset, things and techniquesthat really the state investors
need to be using.
Speaker 1 (19:43):
That is awesome, and talk about just a tease of
information that you haveavailable.
I think people definitely needto go to Tom Zeebcom.
Listen to more, find out more,read his books.
There's some good informationin there.
There was a lot, a lot there todo in 20 minutes, so I
appreciate it very much.
Thanks a lot, tom.
Thanks for coming on.
All right.
All right, there we go.
Wow, lots of information.
(20:05):
That was a lot.
I got a lot of tips out of that.
A lot of stuff going on.
You have to go to Tom Zeebcomand check out his website.
You can check out.
He's got wet the.
Also the podcast, the art andscience of real estate
negotiation.
He's got traction, real estatementors all kinds of really good
information.
If you're not getting thereturns you want on your
investments, you want to lookhim up because he's going to
(20:25):
help you out.
All right, that's about it.
We'll see you next Thursday at7 pm.
Hello, this is Brad Wiseman.
You're listening to Real Estateand you We've got a guest here
for you, like we always do.
A good real estate guest here,coming straight from Sarasota,
florida.
He was in Washington, he was inBuffalo God, he came from snow
and went to Florida.
What a smart guy he is.
His name is Tom Zeib.
We're gonna bring him on rightnow and he's gonna talk to us a
(00:22):
little bit about getting yourinvestment game together.
And, tom, how are you doingtoday?
Speaker 2 (00:28):
I'm doing great, Brad .
Speaker 1 (00:29):
Good to see you Good to see you too, man.
So you the thing that's funnywhen you were telling me before
we started recording, you wentfrom Buffalo to Florida, or was
it DC to Florida?
Speaker 2 (00:38):
Buffalo, DC, Florida.
I've been working my way south.
Speaker 1 (00:41):
Working my way south.
That's pretty funny.
That's pretty funny because youknow the difference between
Buffalo and Florida is a worldof difference.
I mean, you're talking two tothree feet of snow at a time,
probably even more than that,whereas in Florida you know you
got hurricanes and stuff, butyou're never seeing the white
stuff down there.
Speaker 2 (01:00):
No no, I'll tell you, though, sarasota feels like,
feels like Buffalo.
I can say Buffalo on the beach,buffalo is on the water, but it
feels like Buffalo in warmweather.
There's a lot of buffalooniansdown here.
I feel like I'm home.
Speaker 1 (01:12):
Oh, that's awesome, Very cool.
So you came to my attentionhere.
I get a lot of requests to beon the show now, which is great.
I feel very blessed to havethat.
But the thing that stood outwas the first sentence of the
first line of your bio, and itsaid that a near-death
experience while whitewaterrafting pushed you to find a new
(01:34):
way to break free of your nineto five job.
What a wake-up call.
But you had to get like what,hit by a rock underneath the
water to get this wake-up call.
Tell me what happened there.
Speaker 2 (01:45):
Well, I've got a really hard head, so it takes a
lot to finally, you know, getthrough to me.
It was an awakening.
All right, maybe a rudeawakening, but here's what
happened in a nutshell.
I had.
I was a few years out ofcollege.
This is 2001.
I had a day job that I wasstarting to get sick and tired
of.
You know, the commute was bad.
(02:05):
You get tired of taking ordersfrom the boss and the colleagues
are all over the map.
And no matter how hard you work, or how literally you work,
you're making the same amount ofmoney.
So the whole thing starts tofeel kind of pointless after a
while and I wanted somethingdifferent, but I didn't know how
.
Then I was a exceptionallyfiscally irresponsible and I had
(02:26):
worked myself into a massivefinancial hole of about 113
grand in debt.
Wow, you know college debt andrevolving credit debt and, just
you know, spending far more thanI had, which is, I guess,
that's the American dream, atleast that's what they tell you,
right?
Speaker 1 (02:40):
Yeah, exactly.
Speaker 2 (02:42):
You should actually be able to fund it.
So I did the only logical thingI ignored it all and pure
escapism.
I went on a giant adventuretrip with my buddies to India
Wow, and as one does.
And we went way water raftingand it was great fun because I
was away from all my problems,away from all my debt, felt like
I didn't have a care in theworld.
(03:02):
I mean, all that stuff was kindof waiting for me in the
background.
But then we went through a verydifficult class five rapid and
I couldn't quite stay on theboat, couldn't stay on the raft,
and I got so excited, and isn'tthat the idea?
And I found myself.
Oh, man so you actually wentoff the side.
I would have gone, I would haveside down and Wow.
Speaker 1 (03:22):
So what was your first thought when you hit the
water?
Oh crap.
Speaker 2 (03:26):
That wasn't good.
I remembered every last secondof it and I, slowly, I was
trying not to lose the ore I had.
I was trying not to lose theshoe I had on that was my
buddy's shoe and then I wasstarting to go hey, I really
need to breathe.
Breathing would be a reallynice thing.
That's very important, yeah,those small details.
(03:48):
And instead of getting kind ofnervous and scared, I started
getting angry, because suddenlyI realized what I had done.
All I was doing was escapingfrom the daily hell that I
didn't like, but it wasn'tmaking anythings any better, it
was just getting worse, and so Iswore to myself.
Then I said I get out of this.
Things are going to bedifferent, I'm going to come to
the surface, I'm going to changemy life and I'm going to make
(04:09):
things better and I'm going topay off all this debt.
But the crazy thing was Icouldn't figure out how.
I mean, what was I going to do?
Speaker 1 (04:17):
Yeah.
Speaker 2 (04:18):
I got out of the water, I got back home.
I had no more vacation timeleft.
I was now $113,000 in debt,still plus the cost of the trip,
so even deeper, and I had noclue what to do.
Speaker 1 (04:29):
Yeah Now.
Were you doing real estate atall or any investments at all
when you were in debt?
Speaker 2 (04:35):
Nope, didn't even own my own house.
I was an apartment dweller.
Speaker 1 (04:39):
Wow, amazing.
So tell me this so you get donewith that.
And then it says here you hadmentioned here that the first
deal that you did almost tookyou under, so you had this
sinking effect in the first partof your career here.
Speaker 2 (04:53):
All I ever did was drown at the beginning.
You know, financially,realistically, metaphorically,
it didn't matter.
I was always drowning.
Yeah, I bought a six unitbuilding because I had read a.
I didn't own anything, didn'town my own apartment.
But when I, a friend of minehad hand me a copy of Rich Dad,
poor Dad, I love that book,great book, yep, awesome, it's
(05:17):
awesome.
Except it doesn't give you anyhow to, it just tells you what.
Right.
So I understood.
I had the same frustrations Ihad when I was drowning, but now
they were answered just by realestate.
All right, fantastic.
So, having nothing but thatbook, I went out and bought a
six unit building in New YorkCity, landlord friendly, new
York City.
Oh my gosh, we could possiblygo wrong.
Speaker 1 (05:38):
Oh, yeah, so a six unit.
New York City is a.
Definitely if you're.
You talk about jumping right in, that's jumping right in
because there's a lot that goeson in New York City.
Speaker 2 (05:49):
Yeah, and I would call that kind of jumping in
class Lee stupid and I wasdefinitely class Lee stupid back
then and what wound uphappening was I had six very
professional tenants atprofessional, meaning they knew
how to game the system, play thesystem and live in my place
without paying a penny.
Cause I guess my due diligencewasn't very good.
Maybe it wasn't really, I wasjust so desperate to have a deal
(06:12):
and now I was drowning again,this time having to pay a
mortgage on a property that Ireally couldn't afford.
But you know, back then theywere giving anybody mortgages
and I was one of those anybody's.
I can't, you know, I can'timagine why things melted down
in 2000.
Speaker 1 (06:28):
Yeah, oh, that's a whole different show, whole
different show.
Yeah, yeah, amazing.
So you go from that.
So what?
What made you learn?
What did, did?
Did you have an epiphany, did?
All of a sudden you readanother book and that made it
happen.
I mean, how did you get fromthe failing six unit New York
City to the next step of beingnow successful or starting to
(06:48):
feel successful?
Speaker 2 (06:51):
Well, when I was falling behind on it, I had, I
had, I bought the, bought thedeal with my sister, and so my
sister and I were partners on it, and one of the tenants took my
sister's head and smacked itinto the wall which was trying
to collect some rent.
At which point I said yeah, youknow what, tracy, we're done?
Let's just, let's just walkaway and leave this.
We must have screwed somethingup.
(07:13):
So I'm like, well, what did wemess up so bad?
Oh, meanwhile, during all thattime when we're falling, we were
going in the pre foreclosure onthis, where we're not paying
yet.
Everything's a mess.
I found my local real estateinvestors association and I
walked into a room full ofpeople actually rehabbing
properties, actually landloading properties successfully,
and then these weird peoplecalled wholesalers that I had no
(07:33):
idea what they did, but Irealized I needed to focus
closer to home.
I was, I was.
I said there's got to be a way.
I just did something wrong.
I need to figure this out.
And so I I started marketingand got another property on the
contract that I thought I wasno-transcript Because somebody
offered to buy the contract offof me.
Yeah, have me wholesale, eventhough I didn't know what that
(07:55):
word meant.
Yep, and at that point I walkedaway with a pretty large check
and I went, oh, wow, if I couldjust do this again and again.
I mean they paid me almost$23,000.
Speaker 1 (08:06):
So what year was that ?
2001.
, OK, yeah, ok got it.
So because that times were alittle different then and that's
when things started to build up.
I mean, 2001 up until 2008 waspretty awesome.
I mean, the values kept goingup.
So therefore the wholesalething made sense, because people
, you were buying a property, itwas appreciating after you
(08:29):
bought it, and then you werebasically assigning it over to
somebody else and then you'repulling the cash in between,
which is it's a great way tomake some money.
Speaker 2 (08:37):
It got me out of debt .
Speaker 1 (08:38):
There you go, it worked, it works.
So now, what is your mainsource of investing today?
Are you still doing thewholesaling or are you doing
something different?
What are you training on?
Speaker 2 (08:48):
I'm still basically 80% 85% wholesaler.
It fits my personality type.
I love marketing, defined deals.
I love negotiating and makedeals.
I really love negotiating.
And then I don't particularlylove managing tenants.
I don't particularly loverehabbing.
I do some, but I don't love itas much.
(09:09):
So that's just beautiful.
Speaker 1 (09:12):
Explain for the audience.
What does the wholesaling mean?
How does that work?
Speaker 2 (09:20):
So everyone knows what rehabbing is right.
You find a property andnegotiate, you put it in the
contract, you fix it up, yourehab it, you resell it.
Well, wholesaling I go, I markit for the property.
So I find it, I startnegotiating it, I put it under
contract.
But now, instead of me going tosettlement and then doing the
rehab myself and eventuallyreselling before settlement, I
(09:43):
sell it to someone who wants todo all of that and I assign my
position in the contract.
So I'm not actually selling aproperty, I'm selling my
contract, my position in thecontract.
I sell that for a fee tosomebody else who wants to take
over.
They're the ones that settle onit.
Then they go and do the rehabor they go and do the land
lowering.
Speaker 1 (10:03):
And it's called assignment.
Here too, again, I get anotherterm for it.
They call it assignment inPennsylvania.
It's actually legal inPennsylvania to do it.
The wholesaling has become awhole new term that people are
using.
The thing that I guess mostpeople say then at that point is
well, what does the seller say?
You're sitting there andgrabbing money that they could
have made if they would havesold it for more.
I mean, do you have that kindof pushback?
Speaker 2 (10:25):
You know what the seller says to me every single
time.
Thank you, tom.
Thank you for solving myproblem.
Thank you for making this easy.
Thank you for getting me out ofthis issue, because I'm
marketing for people who haveproblems, so maybe listing it
isn't their best option.
Maybe they don't want to listit, maybe it's so messed up.
They're not buying a rundown,dilapidated house and it needs
work.
There's an issue either withthe property or with them.
(10:48):
They are thankful for me.
They know, I've made money onthe process.
They expect that, just like youexpect a licensed agent to make
6%.
Why would you begrudge me formaking any money?
Absolutely, if I'm solving yourproblem.
Speaker 1 (11:02):
No, it makes sense, and you know what's funny about
that too.
Somebody was going to flip it.
It's just not going to be you,and the person obviously that
buys it from you during theirwholesale actually feels that
there's enough equity or enoughmoney still left in there that
after you got your cut, they canactually fix it up and still
sell it for money and make somemoney or rent it out.
Speaker 2 (11:24):
Yes, and that's because I work my numbers
backwards.
I figure out what they want tobuy it for first.
I know how rehabbers think Iknow what they want to buy it.
So if they were marketing forit directly, I know what number
they would go for.
So I know that if I want awholesale to them, I got to sell
it to them at their number,which means I need to negotiate
better than that to create aspread for me.
(11:44):
I don't try to take, I don'ttry to take meat off of their
side of the bone, right, or Idon't take food off of their
side of the plate.
I make sure they're gettingexactly what they want and then
I work it with the seller sothat I'm getting it for less.
Speaker 1 (11:57):
Yeah, no, it makes sense and I'll tell you it's a
big thing out there.
So that's what you're.
So, when you talk about yourtraction real estate mentor,
what are you doing in that?
What, what, what happens withthat program that you're running
?
Speaker 2 (12:11):
Yeah so program I use to teach investors of all
levels Some are beginners, someare intermediate, some are
advanced to realize they'vemessed up their lifestyle
somewhere along the way.
They're not happy with theirbusiness.
I hope I'm retool it, but byfocus.
But all three levels of peopleget, intermediate or advanced.
I focus on three things.
We've got to focus on marketing.
You got to learn how to finddeals.
(12:31):
Find the right kind ofmotivated sellers who need to
sell the property even more thanthey want to sell it, because
that actually sets us up for abetter negotiation.
Which is part two, which ismaking it into a deal, taking a
lukewarm lead and turning itinto a red hot deal by
pinpointing the problem,packaging up a solution that
would fix their problem and thenpersuading them to say yes.
(12:53):
And then the third thing yougotta know how to get paid.
You know how do you put it onthe contract, navigate it
through till settlement andwholesale it during that process
.
If that's what you choose as anexit strategy but I have
students that do anything as anexit strategy the exit strategy
doesn't matter.
I teach the inbound side of it.
So if you want a wholesale oryou want to buy and hold.
You want to rehab, you want todo commercial, it doesn't matter
.
Those are exit strategies.
(13:14):
You still need the market tofind them, negotiate to make
them and understand how tonavigate it through the
settlement.
Speaker 1 (13:19):
And you know what's funny about that.
We always say that the money'smade during the purchase, not
during the sale, and that is sotrue.
In investing, you know itreally is.
It's very true.
And like, if you buy it at thewrong price, you can do anything
you want, you're not gonna beable to make any money.
You know it's just, it's theway it works, but so that's what
you're doing.
So the thing that I thought wasreally cool and we talked about
this a little bit before wewent on the recording here was
(13:41):
that you are actually marketingyourself to the intermediate
investor and the expert investor, because there's times where
you get involved, just like youdid.
You bought a six unit, didn'twork out so well, you thought
you were an investor at thatmoment, but there's people that
do it and then it goes bad.
So you're there, you have acompany and a system that you
(14:02):
use to get them to be profitable, to market them correctly, and
all those things.
That's what I think isdifferent about what you're
offering.
Speaker 2 (14:08):
Yeah, I find a lot of people feel trapped by the
business they created so great.
They've done a few deals, orthey do a bunch of deals, or
they've been in business for anumber of years but they're not
actually happy with theirlifestyle Because they've made a
wrong turn somewhere and,instead of having their business
create the freedom for themthat they really want, they wind
up encapsulated and trapped bytheir business.
So, yeah, they're off on theirown great, but they own their
(14:31):
own jail cell, but it's stilljail.
So I work with a lot of peopleto kind of retool their business
, to put themselves at thecenter, wrap the business around
their personal goals ratherthan their personal goals around
their business.
Speaker 1 (14:44):
Yeah, amazing.
Let's talk about your podcast.
You have a podcast called theArt and Science of Real Estate
Negotiation.
So you're big on negotiation.
That's the big part ofpurchasing it right At the right
price.
Love it, yeah, love it, so tellme some of your negotiation
tips.
Speaker 2 (14:59):
Sure, here I'll give you a few.
I'll give you my top three.
Speaker 1 (15:02):
No, here we go.
All right, write this down ifyou go, if I already have it.
Speaker 2 (15:07):
Yeah, exactly, here we go.
So.
Speaker 1 (15:09):
Brad say a number 100,000.
Speaker 2 (15:13):
Woo 100,000.
That's a lot yeah you'relaughing, so how do you feel
about your number right now?
Not good not good, Not good,not good.
Why not?
Speaker 1 (15:25):
Because you made a face and an expression that
makes me think I have the wrongnumber.
Speaker 2 (15:31):
Exactly yeah no.
How could you possibly have thewrong number?
I just said say a number.
I didn't say a price or a caror a house or a boat or anything
, Just say a number.
And you feel uncomfortableabout your own number.
So that technique I made, thatreaction which you can both see
the reaction and you're able tohear it.
So it doesn't matter if we'reon a video phone or regular
phone or face to face.
That's called a flinch.
(15:52):
So every time you hear a number, any number whatsoever, flinch
because you put the exactthoughts that you had into
someone else's head.
They start questioning theirown number.
Speaker 1 (16:03):
Oh, I love that.
That's good.
I like that one.
I'm going to have to startpracticing the flinch.
Speaker 2 (16:08):
Yeah, each and every time.
Second thing I would say to dois I call it bracketing.
So where do we tend to meet?
Where's the most fairer placefor you and me to meet my office
?
Ok, fine, in the office it'sfair for me that would be given
all the way to you.
What's more?
Speaker 1 (16:25):
fair At your house or at your property.
Speaker 2 (16:29):
No, that's, that's.
That's too much on my side.
What's the fair spot coffeeshop?
Ok, a coffee shop in the middle, yeah, yeah, people tend to
meet in the middle.
In the middle just feels fairto people.
So what bracketing does isengineer the middle to be
exactly where I need it to be.
So let's say I don't know.
Let's say I got to get aproperty for $150,000 at all.
(16:51):
$150,000 all make money, great.
Well, if I asked them how muchthey want for the property, they
say 200.
I say I flinch right, 200.
That's a lot, right, butthey're $50,000 above where I
need in the B.
So to create a bracket, so thatthat's the middle, I've got to
go $50,000 below.
Interesting Got it so that waywe're going to meet in the
(17:13):
middle.
Most prices move towards themiddle.
It just seems fair and honestthat way.
So we I want to engineer whereit is You're creating the middle
, you're creating the middle.
Got it when I need it to be?
Yeah, but I'm going to go onestep further by my technique.
Number three I would neveroffer $100,000 on that property.
I would, though, offer you103,579.
(17:35):
A weird number.
Because it is a weird number.
What do you think about thatnumber?
Speaker 1 (17:41):
103,579.
Speaker 2 (17:43):
That's more than what .
Yeah, that's more.
It's a little bit more.
Yeah, it's a little bit morethan the middle.
Speaker 1 (17:48):
But now you got me intrigued.
Now you have Hugo involved.
Yeah, now I'm intrigued.
Speaker 2 (17:53):
Hugo's intrigued.
You're intrigued by it.
You're thinking well, he reallythought that through, must be.
You know, this guy knows whathe's doing on it.
Because why?
Because it was a specific,unique number.
That is intriguing.
So don't just make a flat offer.
I wouldn't make a hundredthousand, but I say 103,579.
I'm still effectively 50 below,but now you're going wow, this
(18:13):
guy's really thinking throughhis thoughts.
He must really know something.
Yeah, he's serious about that.
So always use a specific number.
Those three negotiationtechniques I use and I've got 52
different techniques I usethat's awesome.
Those three I use absolutelyevery single negotiation because
they're powerful and all yourlisteners can be using those
right now and watch what happens.
Speaker 1 (18:33):
Yeah, no, I love it.
That's good information, man,Really good.
So before we wrap this thing upand you have to let me know if
there's anything that you wantto cover besides that but before
we wrap this up, I also want totalk.
You have books out there too.
Tell us about the books thatyou have.
Speaker 2 (18:45):
I do.
I have a book called how toCorrectly Flip Houses for a
Profit.
So this walks you through myentire model of what does it
take on the marketing end andthe negotiation end and the
getting paid side right thatcontracts, control and getting
paid.
I bring you through the wholeprocess.
It's a very accessible read.
I didn't write War and Peace.
(19:05):
It's designed so that you cankind of read it quickly and
understand what's happening.
Speaker 1 (19:09):
Awesome, Awesome.
Well, that's really good.
Is there anything else youwanted to cover on the podcast
here that you want to get out toto the bubble?
I know you said Tom Zeeb,that's.
Zeebcom is the is the websiteto send people to.
What else do you want to say?
Speaker 2 (19:22):
Tom Zeebcom is for the entire podcast Podcasts that
focuses specifically onnegotiations.
So if you enjoy those tips, Ithink you'll find a lot more
that you enjoy, and you can goto tractionrealestatementorscom
as well and find out more aboutthe program, and there's a lot
of training videos there as wellabout a lot of the different
mindset, things and techniquesthat really the state investors
need to be using.
Speaker 1 (19:43):
That is awesome, and talk about just a tease of
information that you haveavailable.
I think people definitely needto go to Tom Zeebcom.
Listen to more, find out more,read his books.
There's some good informationin there.
There was a lot, a lot there todo in 20 minutes, so I
appreciate it very much.
Thanks a lot, tom.
Thanks for coming on.
All right.
All right, there we go.
Wow, lots of information.
(20:05):
That was a lot.
I got a lot of tips out of that.
A lot of stuff going on.
You have to go to Tom Zeebcomand check out his website.
You can check out.
He's got wet the.
Also the podcast, the art andscience of real estate
negotiation.
He's got traction, real estatementors all kinds of really good
information.
If you're not getting thereturns you want on your
investments, you want to lookhim up because he's going to
(20:25):
help you out.
All right, that's about it.
We'll see you next Thursday at7 pm.
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