the-abcs-of-real-estate-investing-ken LifeFeeling

have on your team. And you’ll find that the goals you set for yourself will actually define
the team. People you know today may or may not be the ideal people for your team once
you determine what you want to gain from your real estate investment business.
Just get started and you’ll be surprised how many people you’ll get to know and how
much they will teach you. You’ll have “friends in the business” before you know it. Here’s
what I mean. We’re doing a deal in Portland, Oregon. I live and work in Arizona. I hadn’t
been to Portland in over ten years. Anyone I had once known there was long since gone.
Neither I nor anyone else in my company knew a soul in Portland. What we did know was
that the city was situated on two rivers and that unemployment was high. The latter meant
that the people who owned property were probably not doing so well. And to me that spelled
buying opportunity. We had one big problem: We knew about the city, but we didn’t know
a single person in the city. We figured the market conditions were at least worth a plane trip
and a few days in Portland.
Before our trip, we made our minds up to find our team, at least the start of it. So we
went on the Internet and looked up property managers, city officials, brokers, and so on in
preparation for our trip. We were not about to travel that far and not meet with anyone who
could educate us about the market. As a result, we had ten or twelve meetings over a period
of two days. It cost us a few lunches and dinners, but we had the beginnings of our team.
Myth #8: You Have to Be a Seasoned Negotiator and Businessperson
Again, this is just not true. Experience in business may make that first walk into an
investor’s office more comfortable, but that’s all it will do. Your true power and confidence
won’t come from your past experience. Instead, it will come from the solid deal you
assemble that is a win-win for everyone involved. This book will show you how to find and
evaluate property with the ultimate goal of establishing a realistic purchase price that
maximizes your monthly income and appreciates the asset. Find a deal like that and
everyone will want a piece of the action.
Over the years, I’ve walked away from a lot of deals, and negotiation had nothing to do
with it. One of those deals was a 205-unit building in Glendale, Arizona. About a year ago
the listing price was $7.9 million, and the broker told me there were other offers the highest
one being $7.2 million. We did our homework on the property and by my estimation; $7.2
million was fair based on the operations of the property. The seller declined every offer and
pulled the listing. Six months later, the seller relisted the building for $8.1 million. If I had
still been interested in the property I would have made an offer based on operations. It
would have been the same $7.2 million offer I made before. The seller would probably kick
me out, along with everyone else who made him an offer based on operations. Are you
surprised to learn that he still owns the building today?
With the method in this book, you’ll find out that the listing price is meaningless. There
is no point negotiating based on this number, and actually doing so is a recipe for disaster.
That’s because in most cases, the listing price is the seller’s opinion of what the property is
worth. It is not founded on the actual operations of the property. What most people consider
negotiation meetings are for me more accurately described as presentation meetings. That’s
when I present the numbers, and they are pretty much take-it-or-leave-it deals. When I get
kicked out, and in truth, usually it is a mutual parting of the ways, it’s because the numbers
don’t work. Walking away is a good thing.