Price is NOT Everything
As a full-time Canadian real estate investor, we have to be conscious of how we structure our deals, monitor our cash flow and profits, and build our net worth. As we continue to grow our portfolio of properties, we must be very aware, obviously, of what we are paying for each property.
All too often, however, negotiation is focused entirely on price, when perhaps a much better deal could be had if we’d only consider what terms we can negotiate in our favour whilst giving the owner his price that he demands.
In any negotiation, we at Canadian Wealth Builders, maintain it is of primary importance that each party walks away as if they had won. Encountering an owner who is fixed on their price, even if their price is above the true value of the property, we may still be able to do that deal where others would not, and still benefit greatly from that property.
What do we mean by terms?
Here are a couple of examples:
1) Closing – If the owner is insisting upon getting the price of their choice, you may have to get the closing of your choice. This might not turn out to be a quick sale anymore, even though that may have been the reason for the initial call between the owner and you. Instead of a quick sale, we may have perhaps a longer closing and a longer due diligence time which will give you more time to be able to either get the funds to close on the property, or more importantly, create a different exit strategy which involves zero of your money.
2) Chattels – The other thing we could consider would be getting extra chattels (a chattel being any item that is not directly attached to the property). That could be an appliance such as a washer, dryer, microwave, fridge, stove, dishwasher, etc. These are obvious, but it can go far beyond this. We can negotiate for the furniture or the tools in the basement or the shed in the backyard(and the contents) or the lawnmower, snow blower, boat, car, even motor home. Depending on what people have, what their situation is, you can negotiate for anything.
3) Fixtures– People may want to naturally take their expensive fixtures, such as an expensive chandelier or ceiling fan. We can also negotiate these into the price as well.
4) Closing costs– When the owner is getting their price, you can negotiate that they pay all your closing costs including legal fees, all taxes and even any lending fees.
Remember, if an owner is stuck on his price, we may be able to negotiate much more into the deal for ourselves to be able to substantiate paying that price.
Canadian Wealth Builders offers many unique, practical, "out of the box" real estate investor trainings which offers the student hands on, in the trenches style instruction to facilitate both a different mindset as well as a successful and lucrative real estate investment business. To find out more, please go to www.canadianwealthbuilders.com
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