Evan Holladay and Joe Fairless

JF1411: Make More Money Per Deal By Being Fanatically Honest #SituationSaturday with Garth Kukla

Garth is making his second appearance on the show today. This time he is here to update us since his last interview (see below for link), he is closing more deals and making more money by being brutally honest with sellers. If you buy anything that is negotiable, you should listen up! If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today, Garth Kukla. How are you doing, Garth?

Garth Kukla: I’m doing fantastic, Joe. How are you?

Joe Fairless: I’m doing fantastic, nice to have you back on the show. Best Ever listeners, episode 1210, that’s where we first interviewed Garth on wholesaling. He’s a full-time wholesaler in Northern Kentucky, greater Cincinnati area. He’s been doing it since July 2016, completed almost 50 transactions, and has four other team members.

Today, because it is Saturday, first off, I hope you’re having a best ever weekend… Because it’s Saturday, we’ve got a special segment, Situation Saturday. This is for the wholesalers out there, but it can certainly be applied, as with all of our episodes, to other types of real estate investing. We can take something away from every episode, regardless if they’re focused exactly on what we do, but especially wholesalers today… If you find yourself needing to do more deals or trying to close out more deals as a wholesaler, then this episode’s for you.

By the end of our conversation, you will have an approach that is working for Garth, who as I mentioned, has closed almost 50 transactions since he’s been doing it full-time, which is less than two years. It’s been working for him, so maybe it can work for you.

First, Garth, do you wanna give the Best Ever listeners a little bit of a refresher on your background, and then we’ll dig into it?

Garth Kukla: Yeah. My background is, I think, one of the things that led to my success or my growth – I was a sales rep for about 19 years. I sold copiers and then office supplies. I got into medical sales, and my last position was managing a team in healthcare sales… So I think from a background, that really helped me… But I also had some real estate experience, I wouldn’t say a lot. I remodeled my first home, I remodeled my mother in law’s house, so I felt like I had a little bit more than normal real estate experience… So I combined that with my selling ability, or my skills that I’ve developed over 19 years, and I basically combined that into what I do every day now. Does that make sense?

Joe Fairless: That makes sense. So what you do every day now is… What?

Garth Kukla: Well, I just had an acquisition manager join my team. He is full-time looking for deals. Prior to him, I was the main person to find properties, get them under contract and sell the properties to our cash buyers. Now I’m finding that I’m working more on my business than in my business, and I’m able to make my systems for disposition more efficient. I’m working on coaching and training my acquisitions person; he’s an absolute superstar, and I’m blessed that he’s a part of my team. I’m learning how to be a better leader in an organization, and that’s leading to even more growth, if that makes sense.

Joe Fairless: What’s your tagline, by the way, for your business?

Garth Kukla: Well, I think you put it in the last podcast, “Wholesaling with integrity”, because I feel like that’s what we do. When we talk to motivated sellers, we’re very almost in-your-face, up-front. My acquisition manager calls me fanatically honest. First off, we’ll tell them that most of the time we’re not gonna be the one buying their house, that we work with investment partners. We don’t necessarily go down the road of telling them that we’re wholesalers per se, because most people wouldn’t even know what that is… But if one of our cash buyers shows up at closing, that’s never a surprise to the seller.

I think the other approach that you’re wanting me to get at is an approach that we’ve kind of refined these last six months… Let me say it this way – we try to talk people out of doing deals with us, because we tell them there’s other options that are better than selling to an investor. We’ll say things like “If you list your house with a realtor, you’ll get probably a lot more money”, and then what we do is then we shut up, and we let them talk.

Sometimes they say, “Okay, I’ll do that.” A lot of times they say, “Well, I don’t wanna use a realtor”, and then we start the discussions further… But we always are presenting them with what’s the best option for them, and most of the time we are not always gonna be the highest offer. In fact, we’re never the highest offer, but the deals we do and the growth that we’ve experienced is because we’re transparent with the sellers and we literally tell them “If you fix the house up yourself or if you rent it, or if you list it with a realtor, you’ll get more money.” While we do that, we build rapport with the sellers and that allows us to get more deals, because when somebody trusts somebody, they wanna do business with them. So we build trust with the sellers literally just over the phone, and that then leads to more deals.

Joe Fairless: So you tell them that you’re not the right approach initially, if they’re looking to get the best price; you say that right up-front.

Garth Kukla: Yeah. I mean, literally, we just closed this deal yesterday, and the seller said they were listing it with a realtor for $50,000, and we said “Well, our offer will probably be half that, so it will be better if you just listed it with another realtor. Do you need a referral?”, and then we shut up.

They’re like, “I don’t wanna list it with another realtor, I just need this house gone”, and then we continue the conversation… But  the whole time we’re listening to the sellers, we’re identifying what their needs are, what they’re trying to do, and then we make our best  decision based on our experience and our integrity, what’s best for them, and we present them with that offer.

What I mean by that is, hypothetically, if you’re a seller and I’m talking to you, and your house is in good shape, and you’ve got six months to sell, your hair is not of fire per se, you don’t need to sell it tomorrow, I’m gonna say “You really should list it. You’ll get a lot more money.” Sometimes they take me up on that offer. Other times they trust us because we’re being honest and upfront and straight with everybody we deal with; we find that we do more deals because we gain that rapport faster by just being straight with everybody we deal with.

Joe Fairless: What is a way you can determine if that approach gets you more or less business?

Garth Kukla: Well, we’ve been doing it probably the last eight months or so. I’ve always carried myself with integrity, per the last podcast we did; I wholesale with integrity. I’m always straight with everybody I deal with. Now I’m a little more — I wanna use the word in-your-face, and I don’t know if that’s the right word, but let me give you an example.

I was going through a house with a seller. I like to inspect the house to make sure that the house is something that I can move to one of my investors. I’m looking at the condition, trying to figure out how much it’s gonna take to rehab it, because that’s part of the evaluation process of my cash buyers… And then the seller says to me, “Well, are your crews going to come in here, and how much do you think it’s gonna cost to fix this kitchen/living room/floor?” I literally turned to them and said, “We’ll probably just buy and resell it, and not touch it at all.” And then I’m quiet.

When you’re that in-your-face with them, you’re listening for a sigh… And the sigh is “Finally, I’m talking to somebody that is just being brutally straight with me”, and you just build really fast rapport, you get people to trust you, and you do more deals. Where I’m going with this – you asked the question “How can I quantify that approach?”, well, I’m a numbers guy, I’m a goals guy, and we ended the first quarter six times ahead of our revenue from that first quarter of last year. I think six times growth is pretty good, and I would attribute a lot of that growth to this in-your-face-approach, if you wanna say it that way.

Joe Fairless: I like the “fanatically honest” approach that was coined by your team member, I’m gonna go with that. So you’ve mentioned two specific ways that you bring the fanatically honest approach to your business. One is you tell them if it does make sense, based on your experience as an investor, for them to list with an agent, you tell them. If you list with an agent, you’ll probably get more money. Two is you tell them “We’ll probably just buy the deal and resell it.” Any other ways that you bring that fanatically honest approach to your deals?

Garth Kukla: Good question. I know this last deal that we just signed up is gonna be a great deal for the investment partner that we’re working with; they wanted to know how much their house would be worth if it was all fixed up, and we told them that at the kitchen table. It was almost uncomfortable, because we were telling them that their house is probably worth 165k as is, and we were offering them 120k. At the table, again, we just kind of referenced that number and said “Are you sure you don’t wanna list?” and they literally said, “No, we wanna sell. We need this gone”, and they literally hugged us as we were walking out the door.

So I think the approach of — if somebody ever asks us a number, we’re not gonna shy away from that. So if they ask us how much their house is worth, “How much do you think you’re gonna sell it for?”, for the most part, we’ll tell them, because I feel like that’s just the right way to do.

And that deal, even though it was a little uncomfortable – like I said, we left with the house being under contract for 120k, and then as we were leaving… I wish I had a video camera, because the lady gave us a hug and said “Thank you so much for buying our house.” It makes you feel good that you’re doing the right thing, and like I said, part of the reason why I do what I do, in the way that I do it, is because I also wanna be able to sleep at night. Because if you google “We buy houses companies”, you can read articles about people taking advantage of people. That is not my goal. I wanna make a fair profit, I wanna grow my business, but by being 100% straight and honest with everybody I deal with, and they accept my numbers and I tell them I’m not their best option and I’m not just a good salesperson and I’m talking them into signing a contract, but then I’m positioning it in a way where this isn’t the best option for them because they don’t wanna sell it.

The deal we closed yesterday, they just wanted it gone as quickly as possible. But on that field, to answer your question even further, some deals are very straightforward. I know that our purchase price is a price where we can move it. The house is either in a good shape or in a good neighborhood, it’s very straightforward… Sometimes houses are a little peculiar. This house had a good foundation, but it had a lean to it, so you could tell that there was a slight unlevelness of the house… So we were very straight with them and said “Look, we’re not 100% sure if we can do this deal because of the lean.” I believed in my gut we could. We negotiated the price and we said, “Look, if your inspections and our investors come through and they are happy with the deal and we’re able to do better than we can…”, on this example we actually gave the seller another $2,500 even though we didn’t have to. That gets back to one of our company’s principles, and that’s just treating everybody fairly.

So on a deal where I wasn’t 100% sure we were able to do a deal, we were able to do a deal; we made a good profit ourselves, and then we actually raised the sales price by about 20% for the seller, and that was just giving them more money, because that’s the right thing to do.

So to answer your question about other ways of how we’re fanatically honest, I think that might fit, if that makes sense.

Joe Fairless: You mentioned earlier on the “$165,000 list, but we’re only going to offer you 120k”, you said “For the most part, we’ll tell them that…” – so are there circumstances where you won’t?

Garth Kukla: Well, if they don’t ask, we don’t always volunteer everything. For example, I don’t tell people that I’m a wholesaler, because they wouldn’t understand it. If somebody asks me a question, I’m always gonna answer it honestly. For example, I did a deal in ’16 where they’ve reviewed my contract and I guess they googled some terms and they figured out I was a wholesaler, so the guy said “Are you a wholesaler?” and I will always answer that question honestly. I said “Yes, I am.” Then I say, “Well, we agreed on a price. You wanna sell your house, you need to sell your house. Let’s just move on to do this deal”, and I closed the deal, we sold it, and everybody was happy.

If somebody asks me specific numbers, like “What do you think my house would sell for?”, I’m gonna answer it. I don’t always volunteer all those numbers, because sometimes throwing everything at somebody might confuse them, and if they get confused, then they might not do anything, if that makes sense.

It’s just kind of like, if you don’t give somebody options, there’s an expression that I learned long ago and I hope you’ll understand it when I say this… Sometimes people like to be told what to do. So when I go into a seller meeting, I’ve already identified what I feel like is the best option, and I present that one option. I don’t say “Well, you could sell it to us or you could list it with a realtor”, because if you give them options, then sometimes people just freeze, and they don’t make any decision at all, and that’s not good for anybody.

It’s not that I’m withholding information, but if somebody doesn’t ask me “What are you gonna sell the house for? What do you think my house is worth?”, I’m not always gonna necessarily volunteer that information, if that makes sense.

Joe Fairless: Yeah, it does. That’s an interesting part you’ve just mentioned – when you go into a seller meeting, you only provide one option, and that’s based on the information that you know about their situation prior to that meeting? Is that accurate?

Garth Kukla: Yeah, I use my selling ability, which a lot of it has to do with just listening… Part of what makes you a tremendous interviewer is you really listen to people like myself, and you ask really good questions… I take a lot of notes; I often will restate phrases that are exactly used by the seller, which will help show them that I’m listening, and then I take that information to them and I present an offer.

Let me say another example – there was a house that the lady owed too much money on it, so I could do a deal, so we were listing it with one of my realtor partners; she didn’t know all the good realtors, so I recommended one. We’re sitting in her living room, it’s a Friday, the realtor is there, I’m there, the seller is there, and they’re talking about listing it and she’s like “Well, give me the weekend and let me think about it, and maybe we’ll sign the papers on Monday.” I said “Carrie, you need to sell your house quickly, correct?” She said, “Yes.” “And you don’t wanna live here, correct?” and she said “Yes.” “And it’s stressing you out because the bills are expensive and it’s affecting your health, correct?” She said, “Yeah.” So I told the realtor, “Just get the paperwork, let’s get you listed today. The sooner your house is listed, the sooner your house will get sold”, and then we left with a listing contract.

That’s an example of me kind of listening to what they need, and then helping them make the decision that’s best for them based on what they tell me.

Joe Fairless: Got it. Lots of good tips. Anything else as it relates to the fanatically honest approach that we haven’t discussed that you wanna mention?

Garth Kukla: Well, there’s a term that I’ve kind of adopted in the last probably six months or so, it’s called being a truth-teller and a truth-seeker.

The truth-teller is all of what I’m talking about being 100% transparent. I’m not gonna buy your house, or if I am gonna buy your house, I’m just gonna resell it, I’m not gonna fix it up. But then there’s the side of being a truth-seeker. When you’re a truth-seeker – let’s say I’m talking to a seller and they’re saying, “Well, I need to downsize.” Well, downsizing isn’t a big enough reason to do a deal with an investor, so I have to seek out the truth. And often, for somebody to become comfortable enough to share the true reason, you have to build rapport. After you build rapport and you ask further questions, you can kind of drill down and find out “Well, they’re not really downsizing, they’re wanting to move because of medical reasons, or  a divorce, or their unemployment, or they’re $25,000 back on taxes and they’re about to get foreclosed on.”

Once you find those true reasons, then often you can also put deals together that maybe you would have passed on in the past, because you felt like the person wasn’t truly motivated. That’s a way where you can expand or grow your business or find more deals, because if solely you get off the phone with somebody because somebody says “I’m just downsizing” and you say to yourself “Oh, well they’re not motivated”, well, as a service provider you haven’t done them your service, because you haven’t found out exactly why they are downsizing.

Now, sometimes it is solely just downsizing, but more times than not it’s another reason, so being a truth-seeker allows you to find more deals, and also find better deals, and that’s important.

Joe Fairless: How can the Best Ever listeners get in touch with you?

Garth Kukla: My website, www.tristatediscountrealestate.com. My e-mail is garth@tristatediscountrealestate.com, and my phone communication is on the website.

Joe Fairless: I really enjoyed learning about your approach, and if a  Best Ever listener is in a situation where they’re trying to close more deals as a wholesaler, or perhaps just in general as a real estate investor, just the approach of being truthful certainly is number one and we should all do that, but in addition, more tactically speaking, some things to do, like you mentioned – one, going into the meeting knowing information about them and providing one option based on what makes the most sense.

Two is just saying, “Yeah, we’ll probably just buy your house and then resell it”, and you mentioned it builds rapport really fast, because it breaks down the walls.

And then three is if you list with a realtor, you’ll probably get more money, and that cuts through all the BS. It’s like, “Okay, what do they really wanna do?” because then there’s no back and forth game on “Well, my house is worth this, it’s worth that” — yeah, it’s worth that, but you’ll have to do XYZ, or you work with us. And then the truth-teller and the truth-seeker…

So Garth, thanks again for being on the show. I hope you have a best ever weekend, and we’ll talk to you soon.

Garth Kukla: Thanks, Joe.

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