How to Negotiate Apartment Deals Without Ever Overpaying

You negotiate a real estate deal the same way you negotiate the price of literally anything else. The problem is that the numbers are so big (multimillion-dollar deals, or even multiple-hundred-thousand-dollar deals) that we get stuck in the math. We get stuck in the how and the why. It feels like a bigger thing than it is.

It isn't. One of my own properties offers a useful example.

People ask all the time why there's a guitar in the background of a real estate channel. It's not just because I like guitars. This particular guitar got negotiated exactly the way I negotiate any real estate transaction. The only difference is the number of zeroes.

The $6,000 guitar I bought for $2,650

This is a Heritage Custom Shop H530. It's a super cool guitar, and out of my entire collection it's probably my favorite.

Six months ago it showed up on Facebook Marketplace listed at $6,000.

For context, that guitar is worth about four, maybe four and a half thousand to the right buyer. But for me to want to buy it, a true deal was $2,500. That's my number. Not what it's worth on the open market: what it's worth to me.

So I offered $2,500 while it was listed at six. The seller said, essentially, absolutely not, go away.

Two months later I'm browsing guitars again and it's still there. They've dropped to $4,000, which is roughly what it's actually worth. I reached out: "Just checking in, I saw this was still around. I'm still ready to go. I can pick up tomorrow, I can bring cash, and I can give you $2,500."

Absolutely not, they said. But then they added something useful: "I'm thinking about dropping this to $3,500 next week."

I said, "Awesome, no problem."

Two months after that it had dropped to $3,500 and was still sitting on Marketplace. I reached out again. Same message. Still at $2,500.

We're now approaching six months from when I first saw a listing priced at more than twice what I was willing to pay. I wasn't pushy. I wasn't obnoxious. I just occasionally followed up and let them know where I was.

They dropped it to $3,000. I reached out one more time: "I'm still good to go at $2,500. I know we've been back and forth on this for a while. I can do this tomorrow." The same thing I'd been saying the whole time.

This time, instead of no, they said: "Look, you're only $500 off. Just bring the extra five and let's make this happen."

I answered honestly. "My real maximum on this is $2,650. I can pick it up tomorrow, I can run to the bank right now."

They messaged back: okay, let's do it.

I came up $150 from my original offer. It was listed for $6,000 and I bought it for $2,650.

Does that make me an amazing negotiator? No. That's just how people work.

Why most investors never get a deal like that

When someone lists a deal online (you're scrolling Crexi and the price is ridiculous) what most people do is not offer on it at all. That is absolutely stupid.

A high asking price is not a rejection. It's a starting position from someone who hasn't yet met a buyer who will pay it. The only way you ever find out whether the seller is firm is to become the buyer who is standing there with a real number when the seller finally gets tired.

Talk to the broker. Get to know the deal. Come up with your price. Where is it actually worth it to you?

That last part is what separates this from lowballing. I'm not offering a random discount to everyone. Sometimes the asking price totally works. I'm always underwriting to find where the deal actually works for me, and then submitting an offer at that number.

How to make the offer without burning the broker

When you know where the deal works and you're way off the asking price, approach the broker like this:

"I know we're coming in quite a bit lower. I ran the math. This is where I think the bank is going to look at it, and it's where I'm at personally. I know it's a lot different from the price they're looking for. Is it worth putting together an offer or a letter of intent, or should we hold off?"

That framing does a few things at once. It tells them you've actually underwritten the deal. It anchors your number to bank lending standards instead of to your own wishes. And it hands them the decision, which means you're not forcing them into an awkward conversation with their seller.

Sometimes they'll say the seller is ready to negotiate: let's write it up and see what comes back. Sometimes they'll say no, that's too low.

Either way, thank them for their time. If they want a letter of intent and you want to start negotiating, submit it right then. If they say no, leave.

And then come back in two months.

The follow-up loop

The deal is probably still around, because other people usually aren't going to overpay for it either.

So you come back with the same exact thing: "I'm still at the same price. I'm curious if you've had any new action on this, or any motion on it."

Brokers are usually going to respond with some version of, "Oh my gosh, yeah, everyone and their sister is interested specifically this week."

Great. "Awesome: let me know if my price still works, or where it's going to fall out."

And they'll always say, "No, you need to get that offer in right now, and it needs to be higher."

Stick with your number. They're probably bluffing.

Then a month or two later, come back again: "It sounds like none of those buyers came together. I'm sorry to hear that. Are they willing to entertain my offer yet?"

What ends up happening (over and over) is that you end up buying at or near what your actual starting point was. You should be able to win almost every negotiation, or at least get almost everything you want, if you're willing to underwrite the deal and just stick with your number.

Patience is the leverage. Not cleverness.

What this looks like as a repeatable habit

I do this once or twice a week. I submit an offer on a deal where I know the deal works for me.

If you keep that flow going consistently (one or two offers a week) you'll find you buy somewhere between four and six multifamily transactions per year. Not marginal ones. Truly excellent transactions that you already know work for you, because you set the number before you ever made the offer.

I have followed this model for five years. I have a little over 600 rental units. It's not magic. It's just consistency, and the cost to you is a few minutes a day.

I hunt for guitars online the exact same way. I have way too many instruments in my house because I just love doing deals: it's genuinely fun. The guitar is a little version of the same thing, but the model is identical.

Key takeaways

• Underwrite before you offer. Decide where the deal works for you, and let that be your number regardless of the listing price.
• A crazy asking price is not a reason to skip the offer. Not offering is the single most common reason investors never buy great deals.
• Frame a low offer around the bank's view of the deal, and ask the broker whether it's worth writing an offer or an LOI. That protects the relationship.
• Follow up every couple of months with the same number and no pressure. Most listings are still sitting there because nobody else wants to overpay either.
• When a broker says there's a rush of interest, they're probably bluffing. Stay on your number.
• One or two offers a week gets you roughly four to six excellent multifamily transactions a year. Five years of that is how I got to 600+ units.

Watch the full video

The full breakdown is under six minutes and walks through the whole guitar negotiation message by message, which is the clearest way to see how boring (and how effective) this actually is. If you want the financing side of the same system, "The Book on Creative Real Estate" is available now. Our free multifamily course is at multifamilystrategy.com, the free community comes with a deal calculator for running your own numbers, and there's a short strategy video in the description for anyone considering mentorship.

You buy apartments like you buy anything. It doesn't matter if the listing price makes no sense. It doesn't matter if the seller wants too much. I'm not offering them what they want: I'm offering them where it works for me, then sowing the seed and waiting to harvest the building, or the guitar, or whatever it is you're negotiating. That's how it actually works.

0:00 You negotiate a real estate deal like
0:02 you negotiate the price of literally
0:04 anything else. But I think the size of
0:06 the deal, the multi-million dollar deal,
0:07 or even the multiple $100,000 deal, the
0:10 numbers are so big that we get stuck in
0:12 the math. We get stuck in the how and
0:14 the why. It feels like a bigger thing
0:16 than it is. But how do you negotiate the
0:18 price of a real estate transaction? You
0:19 negotiate it exactly like you would
0:21 anything else. I often get asked on this
0:22 channel, why is there a guitar in your
0:24 background on the real estate channel?
0:26 And it's not just because I like guitar.
0:27 This guitar in particular is negotiated
0:30 exactly the same way I would do any real
0:32 estate transaction. The difference is
0:34 the dollar amounts are a little bit
0:35 different. This was listed on Facebook
0:37 Marketplace 6 months ago. It was listed
0:40 for $6,000. Now, for context, this is a
0:43 Heritage Custom Shop H530,
0:46 which is a super cool guitar. I love
0:49 this guitar. In my entire collection,
0:50 this is probably my favorite guitar.
0:52 However, for me to want to buy it, a
0:54 true deal for me would be $2,500. Now,
0:57 for context, it's worth about four,
1:00 maybe four and a half for the right
1:01 buyer. So, on this particular guitar, I
1:04 offered the 2 and 1/2 that works for me.
1:06 And the seller said when it was listed
1:08 at six, uh, absolutely not. Go away. 2
1:11 months later, I'm looking at guitars.
1:12 This is still listed there. They've
1:13 dropped their price to 4,000, which is
1:15 again probably about what it's worth. I
1:16 reached out and said, "Hey, just
1:18 checking in. I saw this was still
1:19 around. I'm still ready to go. I can
1:20 pick up tomorrow. I can bring cash and I
1:23 can give you $2,500." To which they
1:25 said, "Absolutely not. I'm thinking
1:27 about dropping this to 3,500 next week.
1:30 I said, "Awesome. No problem." Two
1:31 months later, it's dropped to 3,500.
1:34 It's still on Facebook Marketplace. I
1:37 reach out. I see this still hasn't
1:38 moved. I'm still at 2,500. Now, at this
1:41 point, we're approaching 6 months to
1:43 when I first saw this deal, this guitar.
1:46 It was listed at more than twice what I
1:47 was willing to pay for it. I wasn't
1:49 pushy. I wasn't obnoxious. I just
1:51 occasionally followed up and just let
1:53 them know this is where I am at. They
1:55 dropped it to 3,000. I reached out one
1:57 more time. Hey, look it. I'm still good
1:58 to go at 2,500. I know we've been back
2:00 and forth on this for a while. I can do
2:02 this tomorrow. Same thing I've been
2:04 saying the whole time. They said,
2:05 instead of, no. They said, well, look
2:06 it, you're only $500 off. Just bring the
2:08 extra five. Let's make this happen. I
2:10 responded, you know what? My real
2:12 maximum I'm willing to go on this is
2:13 $2,650. I can pick it up tomorrow. I can
2:16 run to the bank right now. They messaged
2:18 back, okay, let's do it. I came up $150
2:20 on price. It was listed for $6,000. I
2:23 bought it for 2,650.
2:25 My original offer was 2500. Does this
2:28 mean that I'm an amazing negotiator? No.
2:30 This is just how people work. If someone
2:32 lists a deal online and so you're
2:33 looking at a listing on Crexy and the
2:35 price is ridiculous, what people tend to
2:37 do is not offer on it, which is
2:39 absolutely stupid. Talk to the broker,
2:41 get to know the deal, and come up with
2:43 your price. Where is it worth? When you
2:45 know where the deal works for you, reach
2:47 out and offer that. If you're way off
2:49 the price, approach the broker like
2:51 this. Hey, I know we're coming in quite
2:53 a bit lower. I ran the math. This is
2:54 where I think the bank's going to look
2:56 at it. It's where I'm at personally. I
2:58 know it's a lot different than the price
2:59 they're looking for. Is it worth putting
3:02 together an offer or a letter of intent
3:04 or should we hold off? Sometimes they'll
3:06 say, you know what, they're ready to
3:07 negotiate. Let's go ahead and write it
3:08 up and just see what comes back.
3:10 Sometimes they'll say, no, that's too
3:12 low. Either way, thank them for their
3:14 time. If they want a letter of intent
3:16 and you want to start negotiating, go
3:18 ahead and submit that at this point. If
3:20 they say no, leave, but come back two
3:23 months later to it. It's probably still
3:25 around because other people aren't
3:26 usually going to overpay for the deal.
3:27 If the deal's still there, come back.
3:29 Same exact thing. Hey, I'm still at the
3:31 same price. I'm curious if you guys have
3:33 had any new action on this or any motion
3:35 on it. Brokers are usually going to
3:36 respond with, "Oh my gosh, yeah,
3:38 everyone in their sisters interested
3:39 specifically this week. Oh, awesome. Uh,
3:42 let me know if my price still works or
3:44 where it's going to fall out at." And
3:45 they always go, "Oh yeah, no, you need
3:46 to get that offer in right now. It needs
3:47 to be higher." stick with your number.
3:50 They're probably bluffing. And then a
3:51 month or two later, come back. Hey, it
3:53 sounds like none of those buyers came
3:55 together. I'm sorry to hear that. Are
3:56 they willing to entertain my offer yet?
3:58 And what ends up happening is you'll
4:00 offer at or near what your actual
4:03 starting point was. You should be able
4:05 to win almost every negotiation or at
4:08 least get almost everything you want if
4:10 you're willing to underwrite the deal
4:12 and just stick with your number. But I
4:13 do this once or twice a week. I'll
4:15 submit an offer on a deal where I know
4:17 the deal works for me. I'm not
4:19 lowballing everyone. Sometimes asking
4:21 price totally works, but I'm always
4:23 underwriting where does the deal
4:24 actually work for me and submitting an
4:26 offer. Where I think most people get
4:27 lost in real estate as opposed to any
4:29 other item is they don't do the part
4:31 where they actually put together the
4:33 offer. If you start negotiating, you
4:35 just keep this flow going, you're going
4:37 to find that consistently, if you're
4:39 doing one or two offers a week, you'll
4:41 buy somewhere between four and six
4:42 multif family transactions per year.
4:44 truly excellent transactions that you
4:46 know work for you. I have followed this
4:48 model for 5 years. I have a little over
4:51 600 rental units. It's not magic. It's
4:54 just consistency. The cost to you, much
4:57 like buying this guitar, is a few
4:59 minutes a day. I hunt for guitars
5:01 online. I do the exact same thing with
5:03 instruments. I have way too many in my
5:05 house uh because I just love doing
5:08 deals. It's super fun. This is a little
5:10 version of the same thing, but the model
5:12 is the same thing. You buy apartments
5:14 like you buy anything. Where does it
5:16 make sense for you? It does not matter
5:18 if the listing price doesn't make any
5:20 sense. It doesn't matter if the seller
5:22 wants too much. I'm not offering them
5:24 what they want. I'm offering them where
5:26 it works for me and then I'm just sewing
5:28 the seed and waiting to harvest the
5:31 building or the guitar or whatever it is
5:33 you want to negotiate. This is how you
5:35 actually do deals. Any other online, you
5:38 know, guruy like, oh, try this secret
5:40 method. This is how it actually works to
5:44 buy anything [music]
5:45 including real estate. Hope this helps.
5:47 See you guys on the next episode.