Tuesday, December 29, 2015


Always look to solve problems in your negotiations with a Seller. There are no no-win scenarios.

Let the other party speak first.  They always ask you for the first number, always try to have them give the number first.

They have to sell more than you have to buy.  Don't be eager, you'll get into bad deals. Check your ego at the door.  People's situations change.  Present the offers every 30 days.  90 days from now they may be more interested.  

Here are real estate investor Chris McClatchy's suggestions on negotiating a price and terms: Lock in agreed terms, only change countered terms.  Inch towards method...closer to your term than their term.  Except for interest, you counter up on price....rolling the interest into purchase price.  Increase your offer on the price no more than twice.  Then perhaps offer a hybrid model= Where interest is calculated at the end after so many years.  Then negotiate the rate last...1%, 2%.  

The rental revenue has to support the payments.  Making some progress on negotiation and keep getting closer slowly.  If you have details to work out, indicate how much you are looking forward to getting the deal done.  

Some good verbiage: "I understand that you want to make a profit on your original investment and that is reasonable.  The only way I can justify it is if you are willing to take some of the payments over time.  That is why two of the offers were structured that way."

"As investors you understand that I'll need to see the inside to make a higher cash offer."
"Based on your counteroffer that would put me in a negative cash flow situation and that just doesn't make good business sense."
"We may have a little room to move if we are close on the deal.  I have taken into account some of your concerns."

Acknowledge your Seller's concerns, and inch towards a solution. Always keep the door open.

Happy New Year! Happy Investing!

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