« You Have to Already Be Wealthy to Invest in Real Estate, Invest Myth | Main | Investment Property: Finding Your Diamond in the Rough »
You Have to Be a Seasoned Negotiator and Businessperson, Invest Myth
By eric | November 25, 2007
Again, this is just not true. Experience in business may make that first walk into an investor’s office more comfortable, but that’s all it will do. Your true power and confidence won’t come from your past experience. Instead, it will come from the solid deal you assemble that is a win-win for everyone involved. It will show you how to find and evaluate property with the ultimate goal of establishing a realistic purchase price that maximizes your monthly income and appreciates the asset. Find a deal like that and everyone will want a piece of the action.
Over the years, I’ve walked away from a lot of deals, and negotiation had nothing to do with it. One of those deals was a 205-unit building in Glendale, Arizona. About a year ago the listing price was $7.9 million, and the broker told me there were other offers—the highest one being $7.2 million. We did our homework on the property and by my estimation, $7.2 million was fair based on the operations of the property. The seller declined every offer and pulled the listing. Six months later, the seller relisted the building for $8.1 million. If I had still been interested in the property I would have made an offer based on operations. It would have been the same $7.2 million offer I made before. The seller would probably kick me out, along with everyone else who made him an offer based on operations. Are you surprised to learn that he still owns the building today?
There is no point negotiating based on this number, and actually doing so is a recipe for disaster. That’s because in most cases, the listing price is the seller’s opinion of what the property is worth. It is not founded on the actual operations of the property. What most people consider negotiation meetings are for me more accurately described as presentation meetings. That’s when I present the numbers, and they are pretty much take-it-orleave-it deals. When I get kicked out, and in truth, usually it is a mutual parting of the ways, it’s because the numbers don’t work. Walking away is a good thing.
Possibly related posts: (automatically generated)
You Have to Be a Seasoned Negotiator and Businessperson, Invest Myth
- Building your Property Investment Business: The Myths and the Magic
- Working with a Buyer's Agent
- Qualifying Sellers continue...
- Canvassing versus self-promotion
- The Future is Networks continue...
- Thirty-two Techniques For Acquiring Real Estate When You Don’t Have Cash (29-32)
- You Can "Flip" Your Way to Success or Get Rich Quick with No Money Down, the Invest Myth
- The Benefit of a CRS Designation
- Sectional Title Re-sales
- Partners - A Good Thing or a Bad Idea
Topics: Broker, Listing, Property |
July 29th, 2008 at 9:21 am
A listing response should be composed in your word processor and be checked for spelling and grammar. … International Homes
July 29th, 2008 at 12:18 pm
If Buyer’ s default, the right is reserved to sell or, otherwise dispose of the subject property and to charge all losses and expenses incidental thereto to the defaulting Buyer. … Lists Properties
July 29th, 2008 at 2:33 pm
It’ s also easy to find the perfect house there, with the world’ s largest database of For Sale by Owner properties. … Listing Information
September 22nd, 2008 at 7:25 am
Domain sellers listed over 100, seeking to leverage the domain industry’ s largest and most experienced sales team to achieve quick and profitable sales of their names. … Already Listed