Watch as Dave Lindahl goes over what he considers some of the best and most practical ways of navigating the deal sealing process in addition to a few of the common road blocks you might face along the way.
Successful negotiation skills are an art form and must be mastered for you to achieve your investment goals. People who put negotiations on the back burner thinking that they’ll get by or they’ll let someone else handle the deal will often find that they end up with a whole load of work without the pay off. Here are a few tips for negotiating your commercial property deal.
Tip #1: Do Your Homework
You’ll need to know everything you possible can about the property, the sellers, and any related pieces of information that forms the big picture in your mind of what you’re dealing with. You’ll want to be familiar with facts and figures as much, if not more than, the owners themselves.
Tip #2: Learn to Handle the Negotiations
No one is more motivated than you in getting this deal done. For that very reason, make it a point to brush up on your people skills and learn to handle the negotiations yourself. The negotiation process is the deal breaker and leaving it in the hands of someone else who isn’t as motivated as you is risky. With that in mind, there is one exception to that rule – if you have a person on your team (i.e. – real estate agent or lawyer) who is able to successfully handle the deal. This means you know how they operate and what their competence level is because you’ve seen it first hand; not because they told you they’re good at it. They also know you; what your goals are and how you would handle any situations that arise during the negotiation process.
Tip #3: Determine Outcomes before You Even Get to the Table
Before you begin negotiating your first commercial property deal, have a game plan. Determine what key points you want to target during the discussion and the outcomes you want. What price do you want? What terms will you settle for? Are there any changes you want to make in what you originally offered? Be specific. Be up front about everything you’re asking for.
Tip #4: Be Easy to Work With
Be accommodating, encouraging, and motivating at every opportunity. Help the sellers get settled in before your meeting and make small talk with them. Convey an attitude of sincerity and empathy. No matter how heated the discussions get, remain pleasant throughout. People want to work with people who make it easy to work with.
Tip #5: Listen for Clues Pertaining to the Seller’s Motivation
Everyone wants the best deal they can possible get. While it’s a dream to have all the terms of your offer approved by the seller, it’s probably more likely, that you’ll have to navigate your way through one or two obstacles. At this point, it’s necessary to listen for clues that will help to bridge the gap between you and the seller. If you find that they aren’t telling you anything, don’t be afraid to politely ask.
Among the reasons to be in real estate, quick cash is one of the most attractive upsides, especially for new investors looking to get started in a new business/career. When investors think of what it means to invest in real estate, there are two common things that come to mind. One is the holding of rental properties. The other is fixing up rundown properties and selling them for a profit.
I’ll be discussing the idea of holding properties, particularly apartments in later articles and also cover this extensively in my training programs. I’d like to briefly discuss the idea of rehabbing properties and how this fits into your model for generating quick cash in real estate.
Having rehabbed over 820 properties of my own in just a fourteen-year period, I have a lot of experience with this means of generating quick cash and know that it can be a useful tool in building your own real estate business. Rehab opportunities are everywhere and, once you see them as investment properties, instead of rundown junkers, your perspective will have changed for the better.
The secret to successful rehabbing starts with an accurate assessment of retail value post rehab, meaning after the job is done. Too many investors overestimate what they can sell a property for after fixing it up or underestimate either costs or time needed to sell it. Either way, profits can diminish and so too can morale, especially after having invested months into a single project.
My suggestion is to always err on the conservative side when estimating resale value of a property that needs rehabbing. Use lower sales prices, embellished repair estimates, and figure the job will take twice as long as you think it really should. When your analysis of a deal is built around these principles and the deal still looks good, then you likely have a winner. This is because the numbers work in a worst-case scenario. Be positive but avoid shameless optimism, as this will sooner or later bite you in the behind as a rehabber.
Consider too the end before the beginning. Who will buy your rehab project when it is complete? If the property is in an area where most properties are rented, then investors will be your most likely buyers and they are not going to want to pay you retail for the property. The best rehab deals are in areas where homeowners are looking to buy, as they are far more likely to compensate you fully for a job well done.
A final thing to consider is exactly how the work will be getting done. I didn’t do 820 rehabs in fourteen years by doing all of the work myself. Some of you are handy and some of you are not and that is not the best gauge for how to process a rehab. Consider more than just your skills. What is the value of your time? Is it better spent putting up drywall or laying tile? Or rather seeking and negotiating deals? Chances are, your activities as an investor, rather than as a contractor, will be more lucrative so do what you do best and leave the rest to hired specialists.
Finding motivated sellers is always a challenging task and one has to be innovative in locating sellers. Let’s look at the unique marketing strategies to find motivated sellers in real estate investments.
Magnetic car signs along with phone numbers on your cars can be used to express your desire to buy homes. On viewing the signs, more sellers will get in touch with you. You can use these signs on all your cars and even request your friends to use these signs.
You can also use door hangers to show that you are interested in buying houses. Phone numbers should also be displayed in it. These door hangers give direct publicity and advertising. You will have to manage the situation if some house owners get angry with it. It might also bring positive feedback to you.
You can prepare a business card to show your intention along with your contact details and distribute them to service professionals like electricians, plumbers, painters, masons. You might not get an immediate response but this will be useful in future.
Initially you need to convert the deals as much as possible and once you think that your business is established you can start promoting it. Promotional campaigns can boost up your business and help you in finding more sellers. A big billboard placed in an important area can catch the attention of passers. Radio, television shows and seminars can be arranged to make your business more popular. Though the expenditure is high, these strategies will make lot of sellers knock your door and you will get more business.
Include your web address on your business cards and flyers. Advertise on all community and newspaper websites belonging to local organizations. Nowadays Internet has become an important resource to promote a business and real estate is no exception to it. An effective web presence can attract a large number of house owners who are looking for a perfect property. The rise of internet marketing has brought some significant changes in the real estate industry. Once your website ranks in the first two pages of the search results, you will get a lot of hits for your website which in turn will result in increased revenue.
52Your first multi-family property is a critical move in your real estate investing career. You’re moving past wrong information and psychological barriers on into new territory to achieve your financial goals. Well, you made the right decision. Multi-family properties open a huge door of profits for the new and experienced investor to achieve their financial goals.
Your first building block of wealth
Multi-family homes are an easy way to get into investing for first time homebuyers. There are loans for owner-occupant home buyers who want to purchase a multi-family home of up to four units which allows home owners the ability to borrow more because they can use the rental income for loan qualification purposes. They’ll also receive owner-occupant financing with little down and lower interest rates as compared to commercial property loans.
There’s less competition
Multifamily investing is still shrouded in myth and misunderstanding. For that very reason, there’s less competition which means more opportunities for you and I to profit! People in general avoid commercial property because they believe that it is too far out of their reach. They see the price tag. They see the work involved and then they run back to working their plan of buying one house at a time. What they’re really missing is the opportunity to learn a new way to profit from real estate – a new system of buying right. Your first multi-family property will take you through the process of putting a tested and proven system to structure the deals the right way.
Significant cash flow can be created
Your first multi-family property will outperform in profits what your single family investments can do. There’s no doubt that you can become wealthy with single family homes, but you’ll have to do multiple deals quickly just achieve the same amount of money. When you start getting those monthly checks in the mail, you’ll have a reminder of why multi-family investing is the way to go.
Lower risk involved
Multi-family properties provide a cushion of income for unexpected events. If you lost a tenant in a single family property, you’ve also lost all your income for that month. With multi-family properties, the mortgage expense can be covered with rents from other tenants and from your cash flow. If there are repairs or maintenance that needs to be done on the property, the cash flow you generate from the property can help to pay those expenses. In order to do that with a single family property, your cash flow needs to be really high to be able to offset the costs.
Start as big or as small as you want
Commercial property is the path that will help you achieve your financial dreams and goals. The idea here is to just start. You can start off with small properties and still see a remarkable cash flow as compared to single family properties.