TOP 10 REASONS TO BECOME A BETTER NEGOTIATOR IN REAL ESTATE & EVERY OTHER ASPECT OF YOUR LIFE! Part 3

Number 3 of our 10 points deals with: Maximize financial returns, while creating the edge in negotiations.

The person who mentions price first always ends up on the losing end of the stick. Let’s think about that for a moment. Is it a true statement? Over my 20 plus years of negotiating for a living and real estate investing I can say without reservation absolutely Yes!

Let me explain. When you make the initial offer you give up the ability to see how flexible your opponent is regards to the issue being negotiated, in addition your first offer may be too high and your opponent may accept it on the opening round.

If you are forced to put an initial offer on the table, make sure it is a low ball offer which will demand a counter offer from your opponent.

Be well,

James Gage

TOP 10 REASONS TO BECOME A BETTER NEGOTIATOR IN REAL ESTATE & EVERY OTHER ASPECT OF YOUR LIFE! Part 2

Number 2 of our 10 points deals with : "Achieve Desired Outcomes". This is where most negotiators go wrong and settle for whatever they can get in the negotiation process. The number one reason negotiators do not achieve the desired outcome they hope to achieve is because they fail to stick to their negotiating plan, and default to their opponents agenda. The kiss of death to any negotiator is to allow your opponent to take control from you during the negotiating process; it’s better for you to either stop the negotiations or ask for a break! You could use a ploy such as: “ I would really like to postpone this meeting until I have assembled some more information or documentation, so I may provide the most up to date and correct resources or numbers etc……”.

If you would rather just have a break use something like this : ask for a bathroom break, tell them you have to make an important phone call or start talking about something that has very little to due with the subject matter at hand – this in the legal arena is called a “side bar”.

The ploy or break allows you time to get back on track with your agenda and start with a clean slate. This will hopefully break or interrupt your opponents stride and or thought process and allow you to get back on track.

In conclusion, in order to achieve the desired outcome : 1. Never loose control of the negotiations; if so use a ploy or a break technique.

2. Always stay on track with your plan and never give control of the negotiations over to your opponent. Keep these 2 points in mind and you will always achieve your desired outcome.

Be well,

James Gage

TOP 10 REASONS TO BECOME A BETTER NEGOTIATOR IN REAL ESTATE & EVERY OTHER ASPECT OF YOUR LIFE! Part 1

Number 1 of our 10 points deals with : "More Personal & Professional Profitability". Plain and simple, it means the better negotiator your are the more your bank account will increase.

The first mistake people make is thinking that sales and negotiating are 2 different animals - nothing could be further from the truth. We need to treat negotiating as if we are a commission based sales person, that every step of the negotiating process is a matter of putting food on the table.
With that in mind we must change the way we approach the negotiating table and forget about getting to "yes" and get to "no" as soon as possible in order to make maximum profit and leverage time to our greatest benefit.
Instead of dealing with prolonged negotiations, determine upfront whether your time invested will bear fruit or establish whether you are on a hopeless quest leading no where. If you probe your opponent, you sound be able to know based on pointed questions, within 5-7 minutes, if you will be able to accomplish a winning negotiating session; this holds true in real estate, business transactions and personal venues.

" Negotiating is a "Million Dollar Skill".

Until next time be well.

James Gage

TOP 10 REASONS TO BECOME A BETTER NEGOTIATOR IN REAL ESTATE & EVERY OTHER ASPECT OF YOUR LIFE!

Why become a better Negotiator? The answer is SIMPLE !!

When you improve your negotiation skills and techniques, you will gain the ability to increase your value in every aspect of your life simply by increasing the effectiveness of your communication skills. Contrary to popular belief negotiators are not born, they’re made through real world training! Here are just 10 reasons for you to improve your negotiating skills, especially in these uncertain financial times…

1. Improve personal and professional profitability.

2. Achieve desired outcomes.

3. Maximize financial returns, while creating the edge in negotiations.

4. Avoid being cheated or ending up on the short end of the stick.

5. Out smart and maneuver around difficult negotiators and their tactics.

6. Enter into every negotiation whether in person or on the phone with confidence.

7. Know when and how to walk away from a negotiation, while leaving the door open to future negotiations.

8. Learn to get to the No’s, before you get to the Yes’s.

9. Turn every cultural, economic differences into assets rather than liabilities.

10. Earn a six figure income on a part time basis by using your negotiating skills.

For the next 10 blog posts I will expand on each one of the above reasons, which will take your negotiating skills to the next level!

Be well,

James Gage

Question of The Week: Lease Options and Repairs

I received a question from one of my mentoring students today, so I thought I would share my answer with you my faithful blog readers.

The question was this “can we, as lease purchase investors require our tenant/buyers to repair items that break or need maintenance during their option period?” The simple answer is Yes; if you structure it properly! The reason this question came up is that my student went to his local REIA club meeting, and heard an attorney say it was illegal to do so. It is only illegal if you include such language in the traditional residential lease, but since we are sandwiching the property, we always use 2 contracts – an option, and a residential lease. Within the confines of the option agreement we place language that states that repair/maintenance issues of x amount are the responsibility of the Optionee, and in order for them to be able to exercise their option down the road they must agree to the language of the contract. If they default they not only lose their option consideration, but they are on the hook for the repair and eviction procedures could follow.

I hope this was useful information.

James Gage

Would You Like To Know Why Lease Options, AKA Rent to Own Are Excellent For Real Estate Investing?

By James Gage

As the real estate market evolves and changes, there are fewer mortgage loans available and fewer people who qualify as the factors for qualification become more stringent. Having less than perfect credit puts, a cramp on the ability to obtain the necessary financing for a traditional home purchase, but that does not mean that fewer people want to settle into a home and become a homeowner. Real estate investors are learning that they can benefit from this situation and make a profit by offering nontraditional means of obtaining a home to those with credit that is not well established or is less than satisfactory to a mortgage lender.

Lease options, aka rent to own homes, are a great source of income for the creative real estate investor who wishes to make money while helping those who cannot get into a home with their own credit to realize their dreams of owning a home. Lease options work much like a leasing a vehicle, only on larger terms. It benefits the tenant buyer who cannot obtain a mortgage to purchase the home by offering them the opportunity to build their credit and make the choice to purchase later while also assisting the investor by maintaining an additional source of income for the duration of the lease period.

When a car is leased, there is a nonrefundable deposit paid to the dealership that equals a percentage of the car's value. This is also done in a lease purchase or rent to own agreement and is referred to as the Nonrefundable Option Payment, securing the tenant buyer's ability to choose whether or not to purchase the home at the end of the lease contract agreement. As with a vehicle, there is a lease contract signed in which the tenant buyer agrees to make a payment of a certain amount each month for a predetermined length of time, usually 12 months. This can be done in a manner that includes payments to be credited toward the purchase of the house or not, depending on how you want to set up the lease.

Finally, at the end of a car lease, the driver has the option to finance the remainder of the "balloon payment" owed on the vehicle in order to purchase it or to turn it back over to the dealership. In real estate, when working with a rent to own or lease option contract, this is referred to as the Option to Purchase contract, in which the tenant is given exclusive rights to purchase the real estate property without you offering it to the highest bidder first without obligating them to purchase when the lease is up.

If the option contract was signed so that the payments made during the lease period were credited toward the purchase of the home, the tenant buyer will need to obtain a mortgage loan equivalent to the remainder of the purchase price originally agreed upon. If there were no rental credits, the tenant buyer will need to obtain the entire purchase amount.

Lease options and rent to own housing are excellent ways for a real estate investor to make a lot of money because there are three different sources of money coming in, all of which add up to a sum greater than the original investment by far. You put little money into the purchase, and in exchange, you receive an up-front payment, monthly installments, and finally a purchase payment equal to an amount greater than you paid. I structure all of my deals so I get paid at the beginning of the deal, the middle of the deal, and at the end of the deal – what more could an investor want !

Dave Ramsey Part 2 : Horrible Advice

Hello All:

I was hoping not to re-visit this subject again, however, I received a phone call from a fellow investor (Darlene M.) who received some real bad advice from Dave Ramsey’s radio program.

First, let me state I’m going by what she told me and I am basing my comments on the substance of the phone call to me, but I can tell you that I strongly disagree with what Mr. Ramsey teaches – more about that later.

Darlene explains that she called Dave’s radio program to refute what he has been saying on his radio program about now is a “great time to buy a house”. She did get on the radio to ask the pointed question, but as soon as she asked the question, Mr. Ramsey became angry and coarse, and stated anyone with a half of brain can see what great opportunities are out there for home ownership! What a great posture for a national radio personality to take when the general public calls in with a request for help and clarification, Darlene said she decided to take Dave’s advice and by a house (pre-foreclosure) 3 months ago, and since that time she has lost 5 % in value!

She read my back issues on my blog and noticed I was not a fan of Dave’s, and have clearly stated for the past 15 months that you should not be buying anything in this market, rather you should be using leveraged strategies such as lease options for investments and personal residences.

That being said, and being fair to Dave Ramsey, Darlene did not elaborate on the details of the deal that she did, so we can not bash Dave Ramsey if she got into a bad transaction on what she perceived to be his counsel. However, when it comes to the generic advice of “now is the time to buy real estate” – in the words of Dave Ramsey “have you been living under a rock”?

We have only seen 1/3 of the foreclosures that are going to happen according to financial pundits and Federal Reserve. In addition, these foreclosures have caused increased housing inventory forcing property values to sink 15-20% from all time highs. My question to Dave would be, what do you think is going to happen when the other 66% of people facing foreclosure comes into view? Can you say another 30% downward progression, and if you buy now as Dave suggests, you will be in a upside down property and be forced to stay in said property for the next 10- 15 years, while the market tries to gain value.

The other problem I have with Dave is on his investing advice! After becoming debt free, by the way this is the only thing I agree with him on, he encourages people to invest in mutual funds. Are you crazy Man!!! Have you seen how our dollar has been devalued? In 2002 the Euro was at .88 against the dollar, today the Euro is 1.51 against the dollar – you do the math!

Our country is being bought up by foreigners, who look at the US stock market as a flea market due to the strength of their currency; they are literally gobbling up everything in site. By the way many would say that a weak US dollar is good for our economy and will bring foreign investors in to buy our products, thus helping to stabilize our devastated economy. My question to those folks is – what products? Last time I checked the US didn’t make anything anymore; we have been referred to as a service based economy which subs everything out oversees.

OK, many would say that I’m jealous of Dave Ramsey because he has a successful radio program and I have a blog. Nothing could be farther from the truth. I just want people to stop drinking the cool aid and start listening to the voices of reason, whether that be me or someone else, who can document and substantiate what we preach!

So what’s my take? The only way you should be in the stock market is with stock options. If you’re stuck in the market due to company related 401 Ks, consider moving into a money market fund or precious metal fund – gold has tripled in the last 5 years and is almost $1,000 dollars an ounce. Look into become a leveraged investor in the Forex trading market – leverage at it’s best if you do not have those restrictions mentioned above. And of course, become a short term investor through lease options, and assignments with short sales and probates.

In the words of Forrest Gump;” that’s all I have to say about that”.

Be well,

James Gage