Creating Wealth Through Real Estate

Sweeping off the dust

It has been way too long since my last blog post and I apologize as I have just been swamped with work. So this post is to sweep the dust off my blog and also update you all on our Granada Hills REO flip.

We had multiple offers in the first three days several of which were over asking price. We accepted one at $485k (ask price was $480k and started a 30 day escrow with our conventional buyer who was placing 20% down. After approximately two weeks, just shy of the 17 day inspection/appraisal contingency expiration, the buyer's appraiser came back with the figure.

To our dismay, the buyer's, the buyer's agent, and us, the home was only valued at $450,000! This comes after showing evidence of true and real comps (within 1/2 mile, most within the same subdivision), all within the last 3 months, that the value was indeed in excess of the $485 offer price. Again, we have an able and willing buyer wanting the home at that price and the damn HVCC steps in with their overly conservative appraisers who just don't get it and through out a number $30,000 lower.

Since we were very confident that the appraisal would come in at least close to the offer price, we did allow the contingency. Now we had three choices. Let the buyers walk, have them come to the table with $30k more to cover the difference (which they were not willing to do), or start negotiating.Now the negotiations re-started between us (the sellers) and them (the buyers) To start over and go to the next buyer and start a new 30 day escrow would have wasted another 3-4 weeks, so it was in everybody's best interests to resolve the issue. The result was that we were to reduce the purchase price to $477,500 and convert the front two bedrooms into one master suite. I agreed to do this, take the hit, and just move on.

We did have the room in this deal because we bought right, did a lot of the work ourselves, and were able to control the repair budget and keep it lower than most could do for the work we did. The place was a palace in case you didn't see the videos.

This decision was also based on the concept that by taking less profit now, we could get our money back out of this home and into others which would yield more income. Starting over may have got us a higher ask price, but we would still end up with a potential appraisal issue again (which would be resolved by not allowing that contingency), and we would lose out on another 3-4 weeks were are money was earning nothing.Let this be a lesson to all in this ridiculous appraisal market. Make sure you either do not give the appraisal contingency, or limit it to only 5-7 days, or have in place a stipulation stating that no matter what the appraiser come back with, the buyer is responsible for any difference. This could in fact reduce your buyers pool, but then again, it is such a large pool these days that it appears to be worth it so far.

William Barnard is Managing Partner of Nationwide Property Investments, LLC and President of Barnard Enterprises, Inc. Will participates in millions of dollars in real estate transactions each year and has experience in nearly every aspect of real estate investing, including REO rehab flips. Join his next "Make Me An Investor" program by going to www.nationwidepropertyinvestments,com/education and start your journey to creating wealth through real estate!

Negotiations, Part III - 15 Tips

As promissed, here are your tips to negotiating:

1. Find out what the other party wants and help them get it.

2. Don't get defensive. Stay positive and confident.

3. You will have better negotiations if the other party knows you have other options and with those other options, they will lose the deal.

4. Blame Someone Else. If you do not want to give a concession, blame your spouse, partner, attorney, etc. etc. This way, it appears that you want to give the concession, but can not due to the other blamed party.

5. Perception - Make it appear that you do not want the deal, or that you don't need them as much as they need you.

6. Refer to a third party or bring in an expert to back up your position.

7. Work ONLY on issues that can be resolved. If you are stuck on an item, then move on to something else and come back to it.

8. Question the other party's statements with your research. Example: Question their appraisal with a statement of, "based on my reasearch," then show them actual comps.

9. Challenge the written word. If you do not like what you see in a contract, then cross it out. Just because it is written, does not mean you have to agree to it. Everything is negotiable.

10. Give positive verbal and non-verbal feedback.

11. Ask permission to take notes. If there is ever a discrepancy down the road, you can refer back to your notes and show them.

12. Never respond to hostility with hostility.

13. Only issue an ultimatum when you are willing to force their hand and if need be, walk from the deal.

14. Never leave the offer open ended. Be sure there is a deadline which creates urgency on their part.

15. Always come out the winner. The other party may "think" they got what they wanted, but you know who won! Use the negotiating tips and techniques given in this blog series and you will come out the winner more often than not.

William Barnard is Managing Partner of Nationwide Property Investments, LLC and President of Barnard Enterprises, Inc. Will participates in millions of dollars in real estate transactions each year and has experience in nearly every aspect of real estate investing, including REO rehab flips. Join his next "Make Me An Investor" program by going to and start your journey to creating wealth through real estate!

Candidates have been selected and informed

We completed almost two dozen interviews for potential candidates interested in our Make Me An Investor Program which begins in one week. This will be round two of the program. The program is an intensive 8 week, hands on educational experience which teaches the students how to buy REO properties, rehab them and sell them for maximum profits, just as we do.

Every detail is covered and all of the strategies we use to succeed or divulged to the students. Most importantly, we teach them not only the how, but the what to do, what to say, how to do, how to say, down to every last detail. Then we make them do it and report back. This form of education has proven to be most valuable to our first round of students.

Don't forget to watch our video series available here on this BP blog as well as on our website. We look forward to reporting back this round of students' experiences and progress as they go through the program which covers the following:

-     Finding The Deal Before MLS Listed
-     10 Biggest Rehab Mistakes
-     Building Your Team
-     Raising Private Money
-     Calculating Repair Costs
-     Working With Contractors
-     Liability Protection & Insurance
-     Exit Strategies - including Wholesaling

Negotiations, Part II

Part II of my Negotiations educational series here on BP Nation. Please provide any comments or questions you may have.

Negotiations are often all about compromises but should never be the goal itself. It is only a negotiating tool to use if and when you need to. When you are attempting to get something you need and the other party is not obliging, often you can turn to a compromise to get what you are looking for. In other words, give them something small to get something that is necessary or important to you. You should also find commonality with those you negotiate with. As stated in part I, if the other party tends to like you, you will be a more successful negotiator.

Mirroring and matching is also an important tool for usage in negotiations. This requires you to use the same words your opponent uses, the same rate of speed at which they speak, and the smae volume at which they speak. Match their body language and their gestures and always match the same eye contact they give you. This process does not mean that you are not being yourself as suggested you do when starting off negotiati9ons, but it is adjusting your physical gestures, approach, eye contact, etc. to match your opponents'.

Here are some questions to ask yourself BEFORE you begin negotiations: What is my desired outcome? How do I stand to lose if I don't get the desired outcome? What is the other party's motivation? What is my walk away point? Are my expectations realistic for this situation? What support material can I gather and use? What list of alternatives or concessions am I willing to use? What compromises am I willing to give? Knowing the answers to these questions is imperative to better prepare you in advance for the negotiations.

In Part III, I will discuss negotiating tips, don't miss the next blog post!

William Barnard is Managing Partner of Nationwide Property Investments, LLC and President of Barnard Enterprises, Inc. Will participates in millions of dollars in real estate transactions each year and has experience in nearly every aspect of real estate investing, including REO rehab flips. For all short sale and REO investors, Will can provide your transactional funding needs. Contact him by email today for more details.

Negotiations, Part I

Negotiations has been brought up several times in forum threads and I felt it was important to blog about them so here it goes, Part I of several:

Treat negotiations as a game, remember, it is business, it is NOT personal! Never take negotiations personally. Allowing your emotions come into play during negotiations can give your opponent the edge they are looking for.

To be a great negotiator, you must be a great problem solver. Find out what your adversary's problems are and deliver solutions to those problems. You can not come into a negotiation stating "This is what I want!" You need to present in such a manner that by your opponent giving you something, it solves their problem.

Another important aspect of being a good negotiator is to start off by being yourself. Establish a rapport and utilize good people skills. These are essential elements to becoming a good negotiator. If your opponent likes you, you will have much more success in the negotiations. Coming across as arrogant or selfish will hinder your chances of a successful negotiation.

Always listen to what your opposing party wants. In many cases, their most important needs are mentioned right off the bat. Having this information and knowing what is most important to them will help you in your negotiations. Remember the 80/20 rule during negotiations. Listen 80% of the time and speak 20% of the time.

Part II of this series will include compromises, body language and gestures, stay tuned . . . .

William Barnard is Managing Partner of Nationwide Property Investments, LLC and President of Barnard Enterprises, Inc. Will participates in millions of dollars in real estate transactions each year and has experience in nearly every aspect of real estate investing, including REO rehab flips. Join his next "Make Me An Investor" program by going to www.nationwidepropertyinvestments.com/education and start your journey to creating wealth through real estate!

Final video in our rehab series

I hope you all have enjoyed our videos as much as we had producing them! They were a lot of fun and hopefully eye-opening for you.

Nationwide Property Investments has a new hands on program called Make Me An Investor which is an 8 week program teaching students EXACTLY how to maximize profits on REO rehab flips. Our next program starts soon, so take a look at our final video right here: