David Dodge condenses two decades of experience and 1,000+ deals into 10 practical lessons for real estate investors. In this 15-minute highlight, he covers everything from mastering marketing and follow-ups to building genuine relationships with sellers. Whether you're scaling your business or closing your first deal, these insights will sharpen your approach and boost your success.
KEY TALKING POINTS:
0:00 - Introduction
0:09 - Lesson 1: This Is A Marketing Business
1:03 - Lesson 2: There Are 2 Types Of Motivation
1:59 - Lesson 3: There Are 2 Types Of Distress
2:36 - Lesson 4: Learn How To Solve Problems
3:45 - Lesson 5: Follow-Up Is Key
4:50 - Lesson 6: Make Friends Above All Else
6:17 - Lesson 7: Use Business Days For Inspections
6:58 - Lesson 8: Never Ask A Seller How They’re Doing
9:23 - Lesson 9: Transparency Is Key To Get Contracts Signed
13:18 - Lesson 10: Keep Your Sellers In The Loop
15:08 - Outro
LINKS:
Instagram: David Dodge
https://www.instagram.com/davidalandodge/
Website: David Dodge's Real Estate Skool E-Book
https://bit.ly/skoolebook/
Instagram: David Lecko
https://www.instagram.com/dlecko
Website: DealMachine
https://www.dealmachine.com/pod
Instagram: Ryan Haywood
https://www.instagram.com/heritage_home_investments
Website: Heritage Home Investments
https://www.heritagehomeinvestments.com/
I want to talk about the 10 things that I've learned in this business over the last 10 years. Really 20, but 10 full time in the business. Number one, this is a marketing business. Nothing else matters. All right. When I first went full time and I met Brian, and he had all those houses and I had a few and I'm like, man, how are you doing this? And Brian literally asked me, he goes, how many people are calling you every day or week saying they want to sell you a house? And I was like, big old goose egg, nobody, and he goes, because nobody knows you. So you either need to get your butt on the phone, you need to start cold calling, you need to start knocking on doors, or you need to start sending mail. It's so simple. This is a marketing business. There's 50 other ways to go about marketing, maybe even 500, but you know, there's a lot of other ways. But for the most part, that's how I've done most of my deals. Direct mail, cold calling, knocking on doors. If you are not marketing yourself and literally screaming from the rooftops, nobody's going to know what business you are in. Another way to word this is do not keep your business a secret. If nobody knows what business you're in, no one he's going to want to do business with you. Nobody's going to bring you deals. Number two, there are two types of motivation. Know the difference. There's only two types of motivation. Only two. There's capital motivated, and there's convenience motivated. That's it. Now, this is from the top of the chain. You got motivation, and then you got these two, and then beneath these two, there's a hundred that can fall within each of these two categories. There's lots of types of motivation, folks. I'm not trying to tell you that there's not lots of types of motivation. I'm trying to tell you today that there's only two categories. It's either capital motivated or it's convenience motivated. I don't want to talk to capital motivated sellers. You shouldn't either. It's a waste of time. If somebody wants full price for their property, I don't want to waste my time on that. What are the three basic types of convenience? There's lots of them. What are the, what's the 80/20 principle? It's so simple. Cash, quick, and as is. That's what I sell. That's what you should be selling. You're offering cash. You're willing to close fast, and you're going to buy it as is. That's it. Don't over-complicate this. Number three, there are two types of distress. Learn how to find them. Now, again, just like the two types of motivation, there's hundreds of types of motivation. It's hundreds of types of distresses. I'm not going to lie to you guys and tell you that there's not, but there's two main categories of each. With distress, it's either a person or a property. So find people that are distressed, or find properties that are distressed. And oftentimes, you can find both of them at the same time. You can find a distress property that has a distressed owner, aka a distressed seller. It's very rare that you're going to find somebody that has both types of motivation. Can't really be capital-motivated, but also want convenience. You can't really have both of those. Number four, learn how to solve problems, guys. We sell convenience. I don't sell capital. When a property's got a Zillow's estimate, which we all know isn't the best way to comp a property, but it can be pretty good in some markets of 200 grand, and they're asking 190, "I don't want anything to do with that seller. I'm going to wish them the best. I'm going to tell them to go hire an agent. I'm going to ask them if they want to work with me as an agent." I'm not going to waste a bunch of time trying to get them down to 110. We're 80 grand apart. What I'm going to do is I'm going to make an offer at 110, and I'm going to tell them that I can give them cash, I can close fast, and I can buy it as is. And if they want more, then I'm probably not the buyer for them, and that's okay. Focus on selling convenience. And if you are new to this game, or you haven't figured that out yet, this should be a big eye opener to you. We are not selling capital, all right? If somebody wants to come in and offer more than me on every deal, I'm going to lose almost every deal, not all of them because I can build a good amount of reports, so can you. But most of them, you're going to lose, but at the end of the day, if you're overpaying for deals, you're going to break even or lose money on the deal anyway. So sell convenience, know how to find distressed property owners, and understand the two types of motivation. We don't want capital motivated. We want convenience motivated people, period. Number five, follow up is so key in this business. It takes my business, and I got a small operation, guys. The average touches is going to typically be about 15, not on every deal. I'd be lying and see if I said every deal takes me 15 touches, but I'd also be lying to you if I told you that 15's the max. 15's the average. What to touch? A phone call, a text message, a door knock, an email, a voicemail. You're doing something to try to get them on the phone. Not every touch is going to land, right? It could even be sending them four or five postcards, and then having four or five conversations, and then sending them a call or two. It's just something that you're doing, your activity, it's time to just get in front of them. It kind of goes hand to hand with marketing. Once you get a lead, or even a prospect, you can't just call them once they leave voicemail and move on. You've got to keep following up. You've got to keep going. So follow up is so key in this business, and in fact, I would say 97%, I'm pretty confident to say that it's about that high, is going to require at least two or three touches. The amount of times that I can get a seller on the phone and go run an appointment and lock it up that day, it's like two or three percent. It happens, maybe five percent. It happens, but it ain't a lot. It's going to require follow up. Number six, make friends above all else. All right, I am not here to sell you guys. I'm not here to sell a seller on why they should work with me. In fact, I don't even sell buyers on why they should buy my deals. I just make friends with everybody. I'm kind, I'm polite, I listen, and I'm going to talk a lot today because I'm fortunate to be the host of this call with Matt and Ryan. But when I'm out in the field or I'm talking to a seller, I try to just ask questions and shut the, build rapport. People want to do business with people that they are, that they like and that they're friendly with. I'm awful at sales. And if I'm awful at sales and you can do a thousand deals, you guys can do a thousand deals too. You don't need to be good at sales. I win probably, let's just say a deal or two a quarter, just because I don't want to be too aggressive here, that I'm not the highest offer. And the reason is, is because I'm so focused, I don't even want to say good at, just focused at making friends with the sellers. So if you can make friends above all else, you don't need to go buy all these sales courses and books. And I see people selling like, you know, sales courses and scripts and you know, that might be fine for some people, but I'll beat the guy that's got all these sales tricks up his sleeve. Nine times out of ten, because I'm not going to come off as a sleazy sales person. Everybody knows when they're being sold. I'm just going to make a friend and if I can help you, great. And if you're looking for capital motivation that I probably can't. And I'll tell you that. Focus on friendship above all else, not on selling people, everybody that wants to try to sell you something is just, you're going to, you're going to, the alarms go off to just make friends. All right. Keep it simple. Number seven, use business days for inspections. This is just a so simple one, right? I learned this in the very, very beginning and it's just one of my favorite tips. 40% more time by adding in a single word into your contract business. If you tell a seller that you want 10 days, 10 days is 10 days. If you tell a seller that you want 10 business days, you have 14. If you tell them you want 20 days and you add in the word business, you have 28 days. You can essentially extend your inspection periods by 40% adding in the word business. So always opt for business days when you are doing your inspections. Again, that's a super simple tip, but it's saved me so many times from not having to run out of time by just having an extra day or two or eight. Keep it simple. Number eight, never ask a seller how they are doing on a cold call. You sound like a solicitor and this is probably one that I get the most pushback on. People want to argue with me about this. They think it's in sincere and I wholeheartedly disagree. If you are like me and you run a business, you are probably getting two or three or sometimes 10. I got two today already. People calling you trying to sell you stuff. That call typically sounds like this, "Hey Dave, I'm from ABC company. How are you today?" Guess what my response is? Every single time. Click. And rude. I don't have time. I'd rather go do deals than like listen to somebody try to ask me how I'm doing when they don't even care. All right. When you ask somebody how you're doing on a cold call, you sound like you don't know what you're doing and you sound like you're about to sell them something and waste their time. So don't ask somebody on a cold call how they are doing. Let me add one more point to this in the first minute or two. I'm not saying you can't ask them how they're doing after you've talked to them for two minutes. Great. In fact, you should. But if your opening line is, "Hey, this is Dave with how sold easy, I'm looking for Tom. Hey, Tom, how you doing today?" And you get hung up on, ask yourself why that's happening is because you sound like you're trying to sell somebody something and waste their time. Instead, tell them why you are calling. So instead of saying, "Hey, this is Dave with how sold easy, I'm looking for Tom. How are you today?" Tell them who you are and why you are calling. You are going to increase your not necessarily answer rate, but the rate in which you get hung up on is going to decrease by 10x and you're going to increase the amount of responsiveness and interest, that's the word I'm looking for, but you're going to get from the other person tenfold. So instead, make your cold call sound something like this, "Hey, my name is Dave, I'm with how sold easy, I'm looking for Tom because I believe Tom owns one, two, three Main Street. Do I have the right person?" Notice I didn't ask them how they're doing, they know who I am and they know why I'm calling. And if they say, "Yeah, this is Tom, I do own that." Then you say, "Great, Tom, I'm looking to buy a few more properties in the neighborhood. Do you have any interest in selling?" Tom says, "Yeah, I'm interested in selling." And I say, "Great, Tom, I'd love to learn a little bit more." Oh, by the way, how's your date? That's fine. Ask then. Don't ask in the first sentence, "You will get hung up on 90% of the time." This is one of the rules that I am so strong about because anytime somebody calls me and they ask me how I'm doing on the first call, they get hung up on and it's not personal, it's just you sound like a rookie, all right? So just don't sound like a rookie. Just pass it up. Tell them who you are and why you're calling. Don't overcomplicate it, guys, these are so simple. Number nine, transparency is key in this business, especially when it goes to getting contract signed. Show sellers how you get your numbers. I got clothes on like 95% to 99% of the deals that I put under contract. The reason it is is because when I meet a seller in person, again, keep it in mind that I'm a local investor in my market. I don't do virtual unless it's a student and we're partnering. That's the only exception. But I sit down with my sellers and I show them why my offer is what my offer is. And I can't tell you how many times that I've been the fifth, seventh, ninth, fifteenth person that's going out to run an appointment with a particular seller. And I sit down with them and I tell them straight up, I say, listen, probably not going to like the number that I'm going to present to you. But before I present it to you, has anybody explained to you how they're coming up with their numbers? And I'm telling you, you guys are going to be blown away. Even if you're the tenth guy in the door, guy or girl, in the door, the response you're going to get from your seller is no, Dave, nobody's telling me anything. They're just making me 100K offers and Zillow says it's worth 200. And I say, oh, man, that's awful that nobody's explaining this to you. So let me explain how this works. All right. Here's how we do it. And I just explained the MAO formula, guys, this isn't rocket science. And I say, as an investor, I'm going to look at this property with the end in mind. I'm going to say, all right, 200 is what Zillow says it's worth and whatever we're looking, et cetera, et cetera, 200 grants that that's, that's the fixed up value. So we're going to start there and then we're going to take out, you know, 20, 30, 40%, let's call it 30% simple math, MAO times point seven, right, taken out 30% because there is a cost to sell. That's about 10%. And I'm trying to make a profit and I also have to pad my profit a little bit. So I'm going to show them the math and I'm going to take 30% out. And then I'm going to say, and then look at the comps, you know, all these 200K properties that have sold recently, they have new kitchens and new roofs and landscaping and your house could sell for 200 grand, but it's going to need, you know, $50,000 worth of work to be able to get it there. And in order for me to get 200, I'm going to need to pull that out. And I literally just explain the MAO formula, but I don't do it fast. I slow down. It takes me 10, 15 minutes sometimes and I explain to them how I get my number. And then when I get my number from 200, take off 30%, which would be 60 grand, it puts me at 140, let's say the property needs another 50 and repairs, I'm down to 90. My 90K offer is the same as the previous 10 people in terms of the number on the sheet, but it's not the same because I take the time to explain to them how I got the number. So is my number better than them? No, it's not, but is it delivered in a manner that doesn't make that offer look like an insult? Abs are freaking lily it is. It explains to them that I can't really pay more because I'll lose money. And if you start asking your sellers, has anybody explained to you how they've come up with this really low offer that you've got, you're going to start to learn and realize that nobody's explaining it. They're just making an offer and then they're following up and they get ghosted. I don't blame them. There's a difference between a low offer that is unjustified and a low offer that is justified. It doesn't seem so low anymore when you tell them, I plan on making 20 grand in profit. But in order to make 20 grand in profit, I'm going to have to borrow the money, manage contractors, manage materials, get insurance, deal with the city inspectors, hire an agent, negotiate. Hopefully it doesn't get taken down by a tornado in the meantime and you basically can show them and tell them all of the risks that you're going to have along the way. And then you can literally, this is one of the best things that I use to close at the end is if you were in my shoes, would you do this deal for any less? And usually when I say that, they say, where do I sign? I like you. You're sincere. You're passionate. And you've explained to me why this offer sucks, but everybody else's offer that came and sucked just as bad, but they didn't tell me why. They just hoped I would be excited about it. No one's going to be excited about a 90k offer on a 200k house. Nobody. Unless you justify it as being fair by explaining to them why it is what it is. All right. Number 10. And this is simple too. Keep your sellers in the loop. I can't stand when people go out and they get a 10, 15, 20 day inspection period and they wait till, let's say it's a 10 day inspection period, 10 business days. That's 14 days. Keep that in mind. And they wait till day 13 to call the seller back and they say, yeah, I couldn't get this to work. And then they're shocked at the fact they can't get a price reduction or more time. Why is that shock? You, you left them in the dark and then you left them off to dry. Call your seller every other day. It doesn't have to be daily. Call them every two days, every three days. Keep them in the loop with what's happening. If you're trying to get your investor partners over because you're wholesaling, well, tell them that you're trying to get your team out there. All right. If you're waiting on an inspection or a repair estimate from a contractor, tell them that. It is so rare that I have to exit a deal. And the reason is, is because I'm, it's very simple to me. If you just do this, keep them in the loop to get more time and or a better price. If I can't get the deal done at 90 because the repairs ended up being 60 or 70 in my, in my hypothetical scenario from five minutes ago, then I'm going to keep them in the loop along the way. And I'm going to tell them I'm having really trouble to make these numbers work, but I'm going to try my best and I'm going to basically not wait till the 13th day to tell them it doesn't work. I'm going to tell them on day six or eight halfway through and I'm going to try to negotiate a little bit better price or in some cases, they can't go down because they owe so much. And I'm going to get another 14 days, but I'm not going to piss these people off the day before the contract ends. Instead, I'm going to be their friend. Look at number six, make friends above all else, guys. So keep them in the loop. And if you go in a little high and a little aggressive, that's fine. Keep them in the loop. I'm trying my best to get this to work. Don't wait till the 11th hour. Tell them on day six of 14 that you're just, you're really uncertain and if, and if they can come down a little bit, then you would be more certain and you'd be more confident that you're going to actually get this done with them. And that in and itself is going to help you guys. Thanks for listening to The Deal Machine Real Estate Investing Podcast. Please leave us a review and follow along wherever you're listening to your podcast. [MUSIC]
David Dodge shares 10 actionable lessons from 1,000+ real estate deals to help you grow and succeed as an investor.
