Negotiating the Purchase of Prime Properties in Real Estate Investing

Negotiating and planning the purchase of prime properties in real estate investing is a big part of making it big as an investor. If you want something badly enough, you usually can find a way to get it. This is not to say that you can have everything you want or that anyone will sell anything under the right terms. But on plenty of occasions, using skills you've built in negotiating and planning results in success. Begin by reading some of the many books written on the subject of negotiating. Study them closely. Learn from them. Practice what you've learned by staging mock negotiating events with friends and family members. Negotiating skills will help you in many aspects of life, as well as enhance your real estate career.

To be a good negotiator, you need to know what you have to offer the person on the other side of the bargaining table. You must prepare yourself well for all aspects of your new business. Think of it as earning your investor's degree. Anyone with money who is of legal age and competence can buy real estate. Most people can become profitable investors, but the returns don't always come easily. You need to work and study to reach your maximum potential.

You can use negotiating skills to settle everything from disputes over who will pay the points at closing to how much a seller will lower a sales price in view of construction defects uncovered during an inspection. Before you start negotiating, however, you need a written plan. Once you find a building you want to buy, determine how you will negotiate its purchase. It is standard procedure for most real estate negotiations to take place in writing, in the form of an offer to purchase. This is good because it means you don't have to make snap decisions and talk off the top of your head. You can formulate a good offer and present it. If it comes back with a counteroffer, you can take time to work out your next offer or decide whether to accept the counteroffer.

An experienced buyer's broker can be a lot of help to you during this phase of your work. It's strongly recommended that most investors find and engage buyers' brokers to help them develop their rental portfolio.

Never jump into the purchase of real estate keepers all at one time. You are more likely to be successful if you build this part of your rental portfolio by taking your time and investing wisely. The best buildings are not always available when you want to buy them. This requires you to be patient as you wait for the right properties to come along. Driving into the keeper market with a wide open checkbook could be disastrous. Because keepers are not always cash producers when you buy them, their negative cash flow could drain your reserve capital and force you out of the real estate game. It is far better, for most people, to buy keepers at a steady pace rather than acquiring several at one time.