13 Tips That Will Make You a Pro Negotiator from The Book on Rental Property Investing by Brandon Turner
In over 400 pages, Brandon Turner shares a detailed guide on how to invest in rental properties from start to finish. I find this book extremely useful for anyone who is just starting or trying to progress in rental property investing. It includes practical strategies and techniques that will allow you to build a good cash flow with rental properties. After all, Brandon Turner is an extremely successful real estate investor so he must know what he’s talking about.
13 Tips for Successful Negotiation in Real Estate Investing
Mind you, this article is not supposed to be a promotion for Turner’s book. I’m writing this to point you in the direction of some seriously good content that will help you learn how to build an achievable plan in real estate. After all, you can never have too many resources when educating yourself on this industry. As long as you’re not letting the state of analysis paralysis stop you from actually investing, you can spend as much time as you want learning from books and similar sources.
This particular book will show you why many real estate investors fail so you can avoid being one of them. It also presents four strategies that you can start implementing today to find incredible deals and make it to the closing point. However, what I want to point out this time are Brandon’s 13 tips for successful negotiation in real estate investing.
Negotiating is a big part of the game and, if you don’t get good at it, it’s going to take a while for you to close a profitable deal. Luckily, just like anything else, negotiation is a skill that can be learned through both theory and practice. Here are 13 great tips that Brandon shared in his book on rental property investing:
Be prepared to walk away – If you are desperate, you’ve already lost.
Know your role – Ask yourself what you're truly after.
Always get the last concession – Have the other party realize that every time he asks for something, he will need to give something in return.
Find true motivation – Use the negotiation time to discover what their true motivation is.
Use a red herring – Distract the seller from what you want (ex. Certain price), by asking for something inconsequential (ex. Their fine china).
Institute a penalty when they ask for concessions – A penalty could be not responding for several days, or requiring your lawyer to look over the issue.
Stick to your numbers – Real estate is largely a game of mathematics, don’t let your emotions take over. Explain the math to the homeowners so they understand why you need a certain number.
Don’t get offended – Keep it light so neither side gets offended.
Negotiate with data – One of the best ways to do this when buying a piece of property is by having the comparable sales (comps) with you when negotiating.
Don’t be insulting – Don’t say their property is a pile of junk, or that they are terrible negotiators. You need to keep them liking you while negotiating.
Let the other party feel good – At the end of the negotiation, both parties should feel as though they won, and the terms are fair. You never want to leave a negotiation with the other party feeling ripped off.
Demonstrate why you are a great buyer – Remind the other party numerous times why you’re the best buyer (ex. If you are paying cash, if you have great credit, how pretty you make houses after the reno).
Ask for their lowest price, then go lower – Ask for their lowest price, after they respond, then ask what if I were able to close this month? After they respond then ask what if I could close this week?