The Negotiation Shift That Got Me $35M in Real Estate With No Money

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0:00 It's not that hard. You just have to get
0:01 used to how do I say yes to everything
0:03 they want, everything I want. And
0:04 instead of saying, "Oh, it doesn't fit."
0:06 We would say, "What would it need to fit
0:08 and hit all of these?" And then it's
0:09 like a really basic puzzle. When you
0:11 find that thing, you get a yes every
0:12 single time. You close a ton of deals.
0:14 This is how I bought $35 million of real
0:15 estate starting with no money. The final
0:17 part, number four, when you actually
0:19 have a deal, we're talking negotiation.
0:21 You know, yes, all the other videos in
0:23 this series play a role here. You have
0:25 to book the meeting to meet the owners.
0:27 You have to actually have a good meeting
0:28 with them. You have to understand
0:30 tonality and telling a story arc and
0:32 putting a deal in negotiations. This is
0:35 my favorite part. Favorite book on this,
0:36 by the way, is Never Split the
0:37 Difference by Chris Boss. Fantastic
0:39 book, fantastic author. If you haven't
0:41 read it, highly recommend the goal. You
0:45 win, the sellers win. If you have
0:46 investors, your investors win. Everyone
0:48 wins. I want to hit 100% of their goal
0:50 and 100% of my goal. So, the first thing
0:53 that I do is literally hold in your
0:55 mind. By the way, welcome to the
0:56 channel. My name is Christian. I own a
0:57 ton of rental properties. I started with
0:59 no money because I built these skills.
1:00 If you don't have a ton of money, you do
1:02 want a ton of skills. Watch this video.
1:04 Take notes. All right. You have a soccer
1:06 pitch. Imagine it in your mind here. You
1:09 have a soccer pitch. On one side,
1:12 there's a goal. On the other side,
1:14 there's a goal. Well, this is very much
1:15 like a real estate deal. I have a goal.
1:16 They have a goal. If everyone scores,
1:18 we're all happy. Now, granted, you don't
1:19 want to tie a soccer game, but that's
1:20 about as far as this analogy needs to
1:21 go. The first thing that you're going to
1:23 do is you're going to map out what the
1:25 goals are for each member. So, for me,
1:27 what is it? It's long-term cash flowing
1:29 fixed rate debt. I want to buy a piece
1:31 of real estate and I want to pay it. I
1:33 want it to pay me
1:34 forever. So, I buy it. It pays me as
1:37 soon as we buy it for all time. I never
1:41 have to lose this property. It's an
1:42 income stream. My income's gone up. I'm
1:43 now wealthier than I otherwise was. The
1:46 seller, we have to map what the seller's
1:48 actually looking for. Now, are they
1:50 after a specific price? Are they
1:53 flexible on the terms? Do they have a
1:55 partnership that they're trying to break
1:56 up? Do they want to roll it into a
1:58 bigger building? There's a ton of
1:59 motivations a seller has. Most people
2:01 don't know how to ask, which by the way,
2:04 it goes by asking as a seller, what is
2:06 your reason for selling? Like literally,
2:08 the people have all these crazy theories
2:09 on how you do this. I just ask them,
2:11 awesome, what is a win for you? What do
2:13 you want this to look like? Now, the
2:15 goal here, I want to negotiate with
2:17 everyone's cards on the table. I don't
2:18 want to miss anything. I will show them
2:20 my hand. There's so many people do this
2:22 super guarded. There's a lot of methods
2:24 that I just absolutely hate. Easiest way
2:26 to do this to the extent that you can
2:28 reveal as many cards as you can and ask
2:30 them to do the same. The end of the day,
2:33 what is it that you are looking at for
2:35 this transaction? What is a win for you?
2:36 I love the
2:38 building. I like the numbers. I would
2:41 like to be the buyer for this deal. What
2:43 does it look like for you? Oftentimes,
2:45 they're going to give you a price. It's
2:46 like,
2:48 awesome. Do you have any idea what you
2:50 want terms to look like? What is your
2:52 end goal? Are you trying to roll this
2:54 into a new deal? Are you trying to cash
2:56 out? What is it that we're trying to
2:58 accomplish? Often there's more story.
3:00 And what I'm really trying to get out of
3:01 the seller is an actual story. And if
3:04 they were represented by a broker, it's
3:06 a little bit harder, but you try to get
3:07 the broker to get this out of them, too.
3:09 What is it that they're really trying to
3:11 do? Often there's a painoint. You're
3:13 always solving a problem when you're
3:14 buying a piece of real estate. So, are
3:17 they having a leasing problem? Are they
3:18 having a partnership problem? Are they
3:20 just tired of owning the property? Are
3:21 they trying to scale up to a bigger
3:23 building? There's still a problem. It's
3:24 like, "Hey, I wants to be bigger. I
3:26 don't want this size building anymore. I
3:27 want a bigger building." Are they trying
3:29 to downsize? Are they trying to do a
3:30 state plan? There's a ton of reasons. I
3:32 want to know what that reason is. If you
3:34 map it correctly, if my goal is
3:36 long-term cash flow, fix rate debt, I
3:39 just have to figure out how do I say yes
3:40 to everything that they need. If
3:42 everything they need over here is met,
3:44 wow, my camera loves that symbol. If
3:47 everything over here they need is met,
3:49 they're going to buy like they're sell
3:52 in this
3:53 case. Try this
3:56 again. If everything they need on this
3:58 side is met. If everything here is
4:02 met, they are going to sell to you. You
4:04 have a deal. They always say yes if you
4:06 hit all of their objectives and you map
4:07 it correctly. So once I know their
4:10 story, that is how I'm going to close
4:11 them. So whatever the story is behind
4:13 the deal, log that away. I have this
4:15 partnership problem. Got it. Really hard
4:17 time leasing this up. Got it. I paid
4:20 this off. I'm
4:21 downsiding. Logg away what the
4:23 motivation is. Now figure out what the
4:25 price and terms are. All right, cool.
4:27 What were you thinking for price? You
4:29 always want them to throw the first
4:30 number. I will try everything in my
4:32 arsenal not to throw the first number.
4:34 Sometimes they will negotiate against
4:36 you. Don't be weird about it. If they're
4:38 like, "Just send me an offer." Be like,
4:40 "Well, give me a ballpark. Where are the
4:42 what what are you thinking in general?
4:45 If they're just not going to give you a
4:46 number, don't be weird about it. This is
4:48 not a game of chicken. They have the
4:49 property, you don't. You lose. Uh try to
4:52 get them to throw the first number. If
4:54 they do not, you have to come up with a
4:55 number with the pieces that you have,
4:57 which means it's probably going to be a
4:58 lower offer. So, I always go through
5:00 with like, okay, what do we know about
5:01 income? What do we know about expenses?
5:03 What can you guys
5:04 share? Based on what I have, I'll submit
5:07 an offer and it will be soft. They'll be
5:09 like, I'm thinking it will probably be
5:10 priced around here and it's going to be
5:12 a lower
5:13 offer. Now, as I get more
5:15 information, I'm flexible on this
5:18 number, but right now with the pieces I
5:20 have, we're probably going to be in the
5:21 ballpark of X. Say I'm willing to buy it
5:23 for 800,000. Uh, you know, I may come in
5:25 like, hey, it probably works at 650
5:28 based on what you've told me so far. I
5:29 am flexible on this. I just want to let
5:32 you know that's about where I'm
5:34 at. Simple. Then they'll come back, oh,
5:37 that's not going to work.
5:39 Okay, give me some pieces here. Either
5:42 either the property is making more than
5:43 I think it is or you have a specific
5:46 price, in which case I've given you my
5:48 number. What are you thinking? Let me
5:50 see if we can come to agreement. At the
5:52 end of the day, they're going to toss a
5:53 number out. Now, I know what they want
5:55 for price. Now, if it's, hey, I want to
5:58 scale another property I need to cash
5:59 out. You're probably need to get bank
6:00 financing or hard money depending on how
6:03 strong the cash flow is on the deal. if
6:06 they have high equity in the position or
6:08 if they're trying to exit and they're
6:10 flexible. So, say they're downsizing
6:11 their portfolio, they're doing estate
6:14 planning, they have a property problem
6:16 that they're trying to get rid of. These
6:18 are all reasons why someone might create
6:20 a finance because now, okay, well, if I
6:22 can't get cashed out right now, I can
6:24 get payments, but I can have you solve
6:26 my problem. If it is a painoint that
6:28 changing management, if you take over,
6:31 if that fixes the problem, seller
6:33 financing actually may be what they end
6:35 up doing. I want to know how creative
6:37 they can get because that can negotiate
6:39 terms, special clauses. You can be crazy
6:41 with it. If it's bank financing, you
6:43 eventually are going to have to come out
6:45 somewhere on the price or maybe
6:47 short-term seller financing while you
6:48 fix whatever the problem is in the
6:51 building. But generally speaking, I want
6:52 to be able to say yes to everything. In
6:54 this example, let's say they say, "Yeah,
6:56 I'm I'm interested in seller financing.
6:58 I've owned the building for a long time.
7:00 I would like a price of $2
7:02 million, and I realize that it's not
7:04 going to work with bank financing, so
7:06 I'm willing to get a little bit of
7:07 creativity if I can reach my price."
7:09 This happens to me all the time. In
7:10 fact, it happened with the 25 unit. I
7:11 bought it for $2 million. They wanted at
7:13 least 5% interest, which was fine. Only
7:16 problem is the rents were super super
7:19 super low. So while it was a great price
7:22 for a 25 unit building in Steville,
7:24 Texas and while 5% is excellent interest
7:26 while rates were 7 and a half at the
7:28 time the deal still didn't cash flow
7:30 which is not a goal for me. Solution all
7:33 right we can say yes to 5% we can say
7:35 yes to your price. How do we say yes to
7:36 everything? I need my payments to be
7:39 lower than the interest. What does that
7:40 look like? The interest extra interest
7:42 is added acured onto the principal
7:45 balance of the loan for the first two
7:47 years. I took the rents from 550 to
7:50 1,100. We literally doubled the rent on
7:53 this property. By the way, tenants
7:55 didn't pay that. The government did.
7:56 That's a strategy for a different
7:58 episode. We doubled the income on the
8:00 property. So, when we went to the full
8:02 5% payments, we were cash flowing
8:04 thousands and thousands and thousands of
8:06 dollars a month. We only added $50,000
8:08 to the principal balance. So, it's
8:09 exactly like I bought it for
8:11 $2,50,000. However, however, I said yes
8:14 to the price. I said yes to their terms.
8:16 They got 100% yes on everything they
8:18 asked for. I dictated what that looks
8:20 like and made it work for me. Goal here,
8:23 goal here, deal closes 100% of the time.
8:25 That is how you map out a negotiation.
8:27 Everyone needs to win 100%. One might
8:30 have looked at that deal and said, "Oh,
8:31 shoot. It's a great deal, but is
8:34 negative cash flow. I can't lose money
8:35 on this deal. I can't do 5%." And this
8:38 price. That's where a little bit of
8:40 creativity comes into. All you have to
8:42 ask is this question. This is the magic
8:43 question.
8:45 How would I make this deal cash flow and
8:47 still say yes to everything that they
8:50 want? Another deal, 38 units. This is
8:52 the first large deal that I bought.
8:54 Seller financed 15% down. They were not
8:57 wanting to seller finance, but it was a
9:00 deal that needed a lot of love. It
9:02 wasn't conventionally financed based on
9:04 the condition of the
9:05 building. It was on market at the same
9:08 price for 12 or 13 years. I think it was
9:11 actually 13. 13 years on market listed.
9:13 Everyone could have bought it. No one
9:15 had asked what they actually want, which
9:17 was, "Hey, we would like to retire on
9:18 $10,000 a month." The property should
9:20 bring in $30,000 a month gross cash flow
9:23 about
9:24 $12,000. That's what it should be
9:28 doing. That being said, it
9:31 wasn't. So, how do you say yes to
9:34 $10,000 a month when the property
9:35 doesn't bring in $10,000 a month? Most
9:38 people would say, "H, there's no deal
9:39 here. We can't do it. Where else could
9:41 buy?" All we did is, well, how could we?
9:43 What if we had no payments for the first
9:46 six months or very low payments for the
9:48 first six months, then the payments went
9:50 up to $10,000 a month? We want most of
9:53 that to be principal so it pays down to
9:54 the loan. So, what if we said 4%
9:56 interest and then just a custom amount
9:57 of principal up to the $10,000 mark.
10:01 Now, we pay off our loans super fast.
10:03 We're cash flow positive the entire
10:05 time. And they get their $10,000 a month
10:07 at $2 million price, which is what they
10:09 wanted.
10:11 It's not that hard. You just have to get
10:13 used to how do I say yes to everything
10:15 they want, everything I want. And
10:18 instead of saying, "Oh, it doesn't fit."
10:19 We would say, "What would it need to fit
10:22 and hit all of these?" And then it's
10:24 like a really basic puzzle. This is like
10:26 fifth grade stuff. You think about it
10:28 like, "Well, okay, here's their pieces.
10:30 Here's my pieces. They don't seem to fit
10:31 together conventionally. What is needed
10:33 to make them fit together?" When you
10:35 find that thing, you get a yes every
10:37 single time. You close a ton of deals.
10:38 This is how I bought $35 million in real
10:40 estate starting with no money. I'm not
10:43 smarter than anyone else. I'm not a
10:44 genius. If you watch this channel for
10:46 any amount of time, most my stuff's
10:47 pretty simple because this isn't all
10:49 that hard to do. It's real estate. It's
10:50 been around for a while. If you can get
10:53 used to asking yourself how instead of
10:55 look at a deal and say, "Hey, I don't
10:56 get it." Get comfortable enough
10:58 analyzing a deal so when you see it, you
11:01 can go, "Okay, I understand what the
11:02 pieces are." Now, I need to be the one
11:05 person who solves the how. If you can do
11:07 that, you're gonna buy infinite real
11:08 estate. You're gonna be very, very
11:10 wealthy. I've made millions of dollars
11:11 doing this. And that's all I do. While
11:13 other people say no, I just say, "How
11:15 would it work?" And then I put in an
11:16 offer. And lo and behold, they often get
11:18 accepted. All right, that's an episode.
11:20 That's negotiation. That's part four of
11:22 the series. Sales, marketing,
11:24 negotiation. How do you actually book
11:26 appointments? Nail the appointment, find
11:28 a deal, and negotiate it. Well, now you
11:30 know. See you on the next episode.