Thursday, December 20, 2007

Real Estate: Negotiating

You may be saying to yourself that the part on mentoring on my previous blog posting is very self serving, because I happen to specialize in One-on-One Mentoring - let me address that for a moment.

I have always said that creative real estate isn't rocket science, you could figure it out on your own, but how many failures are you willing to accept before success?

There is an old saying that "time is money", and nothing could be a greater truth. There is a learning curve to everything in life, especially in real estate, but after that is accomplished it comes down to knowing how to negotiate, Negotiating is a "million dollar skill" few have grasped it fully. I have seen numerous investors leave far too much money on the table, or negotiate a deal that leaves them 1 vacancy from financial disaster. The moral of the story is this- find a mentor to take all your deals to the next level for maximum leverage and profit.

I would like to end this entry by giving you 3 negotiating tips!

  1. Never need a deal that bad that you are willing to compromise your invest plan! So many investors will do a deal just for the sake of doing one; they pull the trigger with the shot gun blast mentality, hoping to hit the perfect deal.
  2. Be Prepared: Know what you’re talking about. Do your comps, fix up estimates, estimate down side potential, know the players, know what you going to do with the property ( know your exit, before you go in the entrance ) – this is essential before you start negotiating.
  3. Never loose control of the negotiations. If you find yourself loosing control, excuse yourself for a bathroom break, if you’re on a phone negotiation put them on hold with the excuse that you need to find vital documents that will impact the subject matter. Of course, this is just a stall tactic for you to gather your thoughts and get back in control.

Hope this helps and till next time – be well.

James Gage