Searching For Black Swans

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Welcome To The Business Of Wholesaling Newsletter!

Every week, we’ll be sending you strategies, tactics, and tools used by successful wholesalers and we’ll cover any important market insights and news in the industry.

Here’s what we got for you today:

• Searching For Black Swans

• Two Magic Words In Negotiations

• Building Win-Win Relationships with Lenders

Searching For Black Swans

In negotiations, what you don't know can make or break your deal. 

These hidden pieces of information are what Chris Voss calls "Black Swans" - unexpected facts that, once discovered, can completely transform a negotiation in your favor.

Think of Black Swans as those critical puzzle pieces you didn't even know were missing. They're not just helpful information - they're leverage multipliers that can shift the entire power dynamic of a deal.

What makes these Black Swans so powerful? 

They often reveal the true motivations and constraints driving your counterpart's decisions. While they might be discussing price on the surface, the real factors influencing their decisions could be completely different.

In Never Split The Difference, Voss shares a perfect real estate example: An MBA student was negotiating to buy a property and hit a wall with the seller's broker. 

During casual conversation, the broker accidentally revealed that the seller needed to sell quickly to pay back mortgages on other properties. This crucial piece of information - this Black Swan - completely changed the negotiation. 

Suddenly, the student understood the seller's true constraint was time, not price.

These Black Swans aren't floating on the surface - they're hidden in your counterpart's worldview, in their emotional landscape, and in the unspoken rules that guide their decisions. Finding them requires moving beyond the negotiating table and understanding the person across from you on a deeper level.

The power of Black Swans isn't just in knowing something others don't - it's in understanding how that information reveals your counterpart's underlying needs, fears, and motivations. When you discover what truly drives them, you gain what Voss calls "normative leverage" - an understanding of their values that can lead to breakthrough results.

Two Magic Words In Negotiations

When you're deep in a negotiation for a property, hearing two simple words can signal a major breakthrough: "That's right."

Unlike "you're right" (which is actually a bad sign), hearing "that's right" is like finding hidden treasure. It means your counterpart has had a light bulb moment - they've truly connected with what you're saying, not just brushing you off to move on.

Think of "that's right" as the sound of mental gears clicking into place. When a seller or buyer says these words, they're not just agreeing with you to be polite. They've actually processed your point and embraced it as their own thinking. It's as if they're saying, "Yes, you've captured exactly what I'm feeling and thinking."

What makes this phrase so powerful? When someone says "that's right," they feel understood rather than defeated. There's no sense they've given up anything in the negotiation. Instead, you've created a moment of genuine connection where they recognize you understand their situation. It's like finding common ground in what seemed like opposite sides of a canyon.

This breakthrough often unlocks stuck negotiations. Once you hear "that's right," the conversation can flow again. Tension dissolves, and people become more open to moving forward.

How do you get to this magic moment?

By creating a summary that captures both the facts and feelings of your counterpart's position. It's like holding up a mirror that reflects not just what they said, but the emotions behind their words. When they see this reflection and respond with "that's right," you've created the foundation for a successful deal.

Building Win-Win Relationships with Lenders

For the newer wholesalers out there, DO NOT treat your lender like another vendor.

The most successful investors understand that creating win-win situations with lenders can open doors to better financing for years to come.

Lenders view every loan application through specific metrics that determine whether you're a good risk. These universal financial yardsticks include the debt-to-income ratio (DTI), which compares your monthly debt obligations to your income. Banks typically want this ratio below 3-6 percent, as it quickly shows how likely you are to repay the loan. If your DTI is too high, paying off credit card debt is often the fastest way to improve it.

Another crucial metric is loan-to-value (LTV), which helps banks ensure they can recover their money if payments stop. This ratio compares the loan amount to the property's appraised value. A lower LTV means less risk for the bank and often results in better loan terms for you.

Credit scores also play a significant role, as they indicate your payment history. While scores above 720 typically won't make much difference, lower scores can significantly impact your ability to secure financing.

Understanding these metrics is just the beginning. Creating a true win-win relationship involves showing lenders you value their needs too. This might include referring other qualified investors to them, which helps the bank make more money while giving your contacts a trusted lender.

When a human being makes the final decision on your loan application, your relationship can influence the outcome in your favor. By demonstrating that you understand the lender's perspective and are focused on helping them succeed too, you transform from just another applicant into a valued business partner.

Thanks for reading this week’s issue of the Business of Wholesaling. 

We’ll be back next week with more marketing & sales strategies, market insights, and other advice you can use to grow your wholesaling business. 

See you next week.

Team Business of Wholesaling