I’ve read a lot of articles on this site. It’s overwhelming to say the least. However, I wanted to get some pointers on negotiating the price of our second rental.
We purchased one last month, and although we did ok on the price, I think we could have done better. My goal is to do better each time. To learn each time.
I’ve read somebody’s comment on here and he will only purchase a home at 70% it’s value. That would seem a hard bargain to me.
Please share your tactics involved when purchasing an investment property. Thanks.
I am probably not the best negotiator. My strategy is that I only buy from motivated sellers. What I do is figure out how much I want to pay for a particular house and I bid that amount. If the seller is not motivated he won’t accept my offer. When I am buying I make offer after offer after offer. I get a call from my realtor and he says you got the offer. I have to ask him on which house? Then I start putting my due diligence into that house. I don’t even drive by the house until I get an accepted offer.
I won’t say we got basement bargains. But we bought below market by jumping on short sales, and then asking the sellers and banks for the stars but settling for the moon. We had so many addendums that it got confusing folllowing what was actually happening. And we asked for some big tickets, and settled for getting $$'s knocked off. Id say it helped having a middle man to do the addendums for us.
I got my training at the poker table. Just like card players they are stuck with a bad hand and will try to bluff. Or they have the hand and you will need to call or fold. Learn to look for tells, just like in poker.
I once played in high stakes games and one of the regulars seemed to have me pegged. I went to use the john and heard him tell his best friend that when I had a winning hand I made a slight sound with my voice and I realized my father made that same sound, it was very slight but a good tell, so I changed my game to not talking if I was in an active hand, period. Made me lots more money.
This guy on the other hand had a tell no one had noticed. He was a chronic smoker and when he had the nuts he blew smoke up, and when he was in trouble he blew the smoke down. Now I started getting some of that money I had given him with my tell back.
So I suggest you look for tells. I had one seller who after a while lite a cigarette and blew smoke, I just smiled and said he is bluffing, and commented well I can’t risk paying that much and now that I think about it I think what I offered you is to much for me to pay, so thanks for your time. Ten seconds later we had a deal.