“Happy are those who dream dreams and are willing to pay the price to make them come true.” — Anonymous
As I was on my way to my son's Flag Football practice today I drove by a property that I own. It is a nice apartment property; good location, tenants are nice and responsible, and the property cash flows very well.
As I was looking at the building I got to thinking about the fun I had when I purchased it. I actually ended up buying this property about 13 years ago with a Mentor of mine. This guy is now 82 years old and still spends some time around the property – giving him something to work on during his retirement…
That got me thinking..
What is the best way, or rather, my favorite way of purchasing commercial investment real estate property?
Well, first most people get the picture in their head of people on two sides of the table. They think of Donald Trump's Board Room with people arguing and negotiating on the property, beating each other up until one person says “uncle,” and you can have it at your price.
The real world is much different. For the most part negotiating is fun, not really controversial, and you have like-minded people wanting to get an investment property transaction done.
Then it hit me. Some of my best deals have been fun to purchase, little in the way of problems, and pretty easy without the dog eat dog mentality. Some of my worst properties I have had over the years did have a lot of stress, arguing, one-upsmanship, etc.
My recommendation when purchasing a property is to truly seek a win-win scenario for both parties. Look for properties that make sense in the first place, and do not try to make the numbers make sense at the negotiation table. What I have found is that when one party pushes the other “over the edge” so to speak, they will need something from the other party sooner or later. It may be during the closing process, or it may even be a question they need answered after closing. How do you think the person who left the negotiation table feeling like they were run-over will react? Of course, the answer is that they will not be very accommodating when that time comes.
So be sure when you are at the negotiation table you follow these steps:
- Work on properties that make sense in the first place.
- Focus on a win-win deal.
- Be professional.
As I reflect on this, those people that I have found to be the most successful definitely operate on the side of fun, as do I. Try to make it easy to do business with you, and take a laid-back approach. This is not to say I let the other side have everything they want and bend over backwards every time they want something. Remain tough, yet relaxed, and make it easy to do business with you. This is the best way for the long-run, and I have found the most successful too.
The bottom line is that if you are in deal with a lot of stress, problems, arguing, etc. it may not be a deal you want to be in. If there is a lot of controversy, you may want to at least think about why you have it, and act accordingly…