When I was seventeen years old I started selling car warranties full-time. I learned incredible lessons in sales and a lot about what not to do in life.
The industry was/is very much how American Greed showcased it to be. They regularly gave out Rolex watches as bonuses. I once watched a manager do cocaine off his desk, had coworkers OD, watched another coworker snort an Adderall, listened to another preach about the benefits of meth, and it was not at all out of the question for someone to call in because they were in jail.
Long story short, not the best environment.
I’ve got one funny story for you and one lesson from this time in my life.
I remember working at a shop (what we called them) next to a guy who has super chatty albeit a bit odd.
One day he pops his head up over the cubicle wall and says, “Dossey, never do anything that makes you serve more than five years in jail. Humans can handle 4 or 5 years but after year five your brain starts to go nuts.”
I remember in the past that he’d mentioned he did some time so I asked him how long he was in for…
This phrase was a term that they came up with that basically meant that you wanted the sale so badly the customers could smell it on your breath. Think of a greasy used car salesman gutting the price on a Dodge Stratus with stains on the seats.
New investors often want to “get started” so badly that they’ll start off on the wrong foot. When we rolled out or mastermind the demand for it was nuts. I had 5 calls a day, 5 days a week, for a few months. I spoke with folks from all over the country.
I spoke with a Fbi head hunter.
I chatted with an engineer at Nasa.
I had a few calls with current professional athletes. (For any of you guys who know me I know nothing about sports. Notably, I tried making small talk with one and chatted baseball only to find out that he was indeed a football player… Nice!)
I spoke with investors from all walks of life and the largest constant I saw was commission breath.
These folks wanted to invest so bad they were trying to force deals with everything they had.
“Well I know that they’re asking retail, but you couldn’t build this for this cheap.”
“It won’t cashflow but if appreciation continues…”
“The owner was asking 200k and I got them down to 182k. Should I buy the house?” – “What are comps?” – “150k.”
Operating from a position of power
One of the reasons I absolutely LOVE direct to seller marketing is the fact that I stick to my formulas and ONLY make offers that make sense for me. An Instagram follower recently hit me up and asked if all of my deals were purchased at 75% – repairs – holding costs. I could confidently say YES. As an investor, this is the difference between a few deals a year and 70+.
Even if you’re dealing with wholesalers, brokers, or foreclosures you can only make offers that make sense for you. If you’re trying to do a Brrrr deal you have no business making an offer at 80% of ARV. This means that you’re going to be analyzing a LOT of deals and looking for a needle in a haystack.
If you’re going stir crazy getting told no by every offer you make it’s time for you to go off-market. A lot of people have anxiety around going direct to seller. Let me share real numbers with you… My average wholesale profit is right at $15,000. My average cost per new acquisition is under $3,000. If I had bought every deal I have from a wholesaler I would have 7 figures less equity in my portfolio.
It takes money to make money. I for one would rather name my price and followup until I get it than have a portfolio of compromises.