• Be prepared to negotiate and discover. Learn everything you can about the property, financials and the people who are living there.
• Call the City and the Police Department. Ask their opinion about the immediate area and the property itself.
• Contact your property management. Ask their opinion of the area and the property.
• Take a look at the businesses and other properties in the area.
• Ask for a complete financial package. The seller will know you’re a professional who won’t be fooled by numbers.
• Use Google. Search the name of the seller, company or property.
• Visit or call city hall where the property is located. Inquire if there are any judgments or case against the company or seller.
• Talk to your realtor. What does he/she know about the seller and the company. Why is the person selling? How many assets does the seller have? Where is he/she investing the money?
• Be sensitive. A sophisticated seller would conduct the same research on you. Be prepared to discuss any negative information.
• Discover the seller’s real needs. By conducting research, you will find the primary needs and other motivation. Is the seller retiring, moving out of the area, consolidating or all 3? Your offer should be constructed to meet their needs.
• Consider your goals. We all want cash flow and no depreciation in our investments. Consider your requirements for cash down, lowest price, condition of the property diligence and closing period. They all factor into your offer. In your offer for a residential investment, close on the third to seventh of the month; the owner will collect the rent and give you the prorated rents for the closing date.
• Collect your repair allowance at closing. Don’t take money out of your pocket for this expense- add an abatement clause in terms so the seller covers the repair costs. You have money coming from the seller that is capitalized by your mortgage for any repairs.
• Pre-determine your strike price or price threshold. Before you accept an offer, determine your maximum price and don’t exceed it. Decide on this beforehand, not at the negotiating table.
• Professional negotiators will tweak your emotions and can make you forget your strike price. Keep that number in mind and don’t be lured into an auction like-state. Always stick to your price.
• Be a chess player. Anticipate the next move or two before you speak, make a statement or issue a counter offer.
• Be prepared to give in. When negotiating, there are normally items in an offer that you can completely give up. Look at areas where you can be flexible such as the closing date, diligences, offer price, financing and certain repairs you have requested.