Wouldn’t you like to know ahead of time if certain potential buyers for your properties would NEVER, EVER pull the trigger and purchase a home? That could be revolutionary for your marketing, your investment strategies, and your time management! Get the important information on “buyers” who will never, EVER buy in today’s episode. I’m Carole Ellis. This is episode 34.
We’ve all met a tire-kicker or two in our day. Alleged “home buyers” who we know in our hearts will never actually pull the trigger, slap down that down payment, and put their names on a need. And that’s okay, but it can really hurt our bottom line and waste our time when we spend hours, days, weeks, or even months courting these individuals. Wouldn’t it be better to be able to offer them what they ACTUALLY want in real estate (even if they don’t know it yet) and be able to turn a profit and move on? Yes, Yes it would. And I’m going to tell you how to do that today, but first, I have another quick question for you:
Wouldn’t it be great if any time you needed equipment to grow your business, you didn’t have to work it into your EXISTING BUDGET because a special, on-demand account was basically sitting there waiting for you to use it when your need arose? How would THAT affect your bottom line and your productivity and profitability? Well, I’ll tell you one thing, I’ve seen it in action with an Atlanta contractor named Eric, and let me tell you, his results are impressive. Just a few months ago, Eric actually received exactly $14,804 to purchase equipment for his company. Find out where he got the money (and how you can access a similar fund designed just for YOUR COMPANY’S NEEDS) by visiting www.rei.today/ERIC right now for the details. It sounds too good to be true, but in reality, it’s just that good. I love it! So read Eric’s story at www.rei.today/ERIC right now.
Now, back to those pesky never-gonna-buy buyers and what to do about them. Here’s who they are, and why they are, well, the way they are. A certain demographic of young people (yep, you guessed it, it’s the millennials again!) are very, very different from the rest of us. This isn’t some “young people these days” commentary. It’s just the truth. Millennials have had a tough time of it. They came of age, for the most part, just in time to be adults in the middle of the housing crash, the financial meltdown, and the Great Recession. They’ve been brought up to believe that an advanced degree justifies any amount of debt and is the only way to get a job, and they’ve been sold on taking out thousands and thousands of dollars in student loan debt in order to get that degree. Did you know that the average college graduate these days has $60,000 worth of student loan debt upon graduation with a bachelor’s degree? And the weight of that debt is, quite simply, causing them to permanently write off homeownership, not because they can’t GET homes, but because psychologically, they simply can’t handle the idea of more debt.
According to Federal Reserve economists, for every 10 percent increase in student debt among people in the five years after they leave school, the probability of their taking out a mortgage EVER declines by one percent. This means not only are millennials delaying home ownership (which we already knew) but they’re actually permanently writing it off in growing numbers as their student loan debt expands with each passing year.
So does this mean all the housing predictions (including my own for certain cities) that rely on Millennials are wrong? Of course not! But it does mean that you can save yourself a lot of time and HELP a lot of buyers get into your properties quickly and more profitably by catering to a mindset that may, if you’re more than 34 or if you don’t have student loan debt (or you’ve already paid it off), be a bit alien to you. Here are three ways to bring in those “never-gonna-buy buyers” and create a mutually beneficial, profitable scenario:
First, present them with unusual options. In many cases, millennial buyers are not refusing to buy. They’re just finding as they explore the option that they’re not willing to add to the invisible load of debt on their backs, even with “good debt” like a mortgage. Offer them “mortgage-free” options via creative financing, such as subject-to financing, where they can buy subject to the existing mortgage on the property instead of taking out a new one, lease-option financing, where they rent from you until they’ve built up a good down payment and then have the OPTION to make the purchase, or seller-financing, where you actually finance their mortgage instead of a bank, which allows you to earn interest on the loan and can make the idea of a mortgage feel a lot more personal and palatable to someone who may actually have never even entered a banking building (but that’s another story).
Next, adjust YOUR investment strategy. You may find that simply offering the option to buy OR rent a property attracts these buyers and gets them in place much more quickly because you’re not forcing them into an uncomfortable situation. Just having options means a lot to millennials, who value mobility and flexibility over just about everything else.
Finally, be aware of who you’re dealing with. Millennials grew up in a tough period of our economic history, often are underemployed and have been unemployed for an extended period of time after graduating with that expensive degree. They tend to be a bit disillusioned, and they may feel less likely to trust someone selling a home than other, older buyers. Be willing to listen to what they want, what worries them, and what they’re looking for in a home, then present them with properties and funding options that resolve those concerns.
Of course, it’s not just millennials who feel disillusioned these days, and our CRAZY presidential politics as we near the 2016 election are a good indicator of just how upset and angry the entire electorate, regardless of age, is becoming. We’ve got the establishment out in full force, but we’ve also got some interesting dark horses in the race in the form of Bernie Sanders and Donald Trump. Here’s the interesting thing about Trump and real estate (where he made his fortune). Trump’s surprise success (numerous sources have admitted at this point that he never planned to make it this far) could actually seriously compromise his real estate brand, and that’s potentially bad news for a lot of existing homeowners and a number of real estate markets. You’ve got to see the connection for yourself, so head right over to the News & Networking Section at www.REI.Today and read today’s feature, “How Trump’s Presidential Bid is Affecting His Real Estate Brand,” right now. And if you’re not yet a member on our website, no worries! text REITODAY no spaces, no periods, to 33444 I’ll provide you with fast, immediate access to all sorts of great trainings, news coverage, interviews, and lot more timely information that will help make your investing safer, faster, and more profitable.
And remember, when you do that, you’ll also be able to GROW YOUR NETWORK by interacting with me and your fellow listeners to REI Today… so stop by to ask questions, make comments and network with other investors across the country. Text REITODAY no spaces no periods to 33444 or head over to www.rei.today right now.
REI Nation, thanks for listening in and always remember this:
Your best investment is your own education.
Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.