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The Power of Using Video For Negotating Apartment Deals

by Michael Blank on July 14, 2014 · 7 comments

  
The Power of Using Video For Negotating Apartment Deals

In last week’s article “Apartment Building Deal Negotiating Tip # 1: Agree on Methodology BEFORE Making an Offer” we talked about the importance of agreeing on HOW we’re going to come up with our offer price before we actually submit our offer.

In today’s article, we’ll talk about a highly effective way for submitting your offer, which is via video. It sounds a bit odd at first, but it’s worked well for me, and it might also work for you.

The Problem

As we talked about in last week’s article, negotiating apartment building deals is all about the numbers. One challenge is that you rarely get the chance to negotiate with a seller face-to-face because it’s normally done through a broker.

Therefore, you have to get good at communicating your rationale (i.e. how you “underwrote” the deal to arrive at your offer price) to both the broker and the seller, without the luxury of doing so in person. If they can follow your underwriting process then you have a better chance at getting agreement on your offer price.

Related: Getting to the Lowest Purchase Price Possible: The Skinny on Real Estate Negotiation

Solution # 1: Write a Long Letter

One thing I’ve done for a long time is to put my offer and underwriting process in a long letter to explain how I arrived at the offer price. This is a perfectly acceptable way to accomplish the same goal, but it’s time consuming.

Solution # 2: Submit a Video along with your Offer

I think a better way to achieve the same goal is to email the broker and/or seller a video recording of your analysis and assumptions.

I use a free program from Techsmith called “Jing” which lets me do a video capture of all or part of my screen. The free product is limited to a 5-minute recording, but you shouldn’t need more than that to articulate yourself.

Here’s an example video submitted to a broker for a deal that I’ve been negotiating. I’m capturing parts of my analysis spreadsheet to demonstrate how I’m arriving at my offer price.

I then emailed the video to the broker along with my offer price. Here’s how he responded:

Brilliant!  It reminds me of the Kahn Academy videos I often watch.  I will have to use this going forward.  I am going to forward this to my clients and we will jump on a call together to discuss and I should have some feedback for you by tomorrow hopefully.

Perfect, that’s exactly what I wanted. I wanted the seller to understand my rationale, and the video makes sure that nothing is lost in translation.

He also added: “We have other offers coming in on this property, but my clients were pleased with your presentation and the details in your offer. We anticipate a level of savviness engaging you as the buyer as opposed to the others whom we are in the process of vetting.” So the video analysis also adds a certain level of professionalism which will set you apart from other buyers.

Related: YES! 6 Proven Elements of Persuasion That Actually Work

Conclusion

It’s critical that you can effectively communicate to the seller how you are underwriting the deal and how you are arriving at your offer price. And since you’re normally negotiating through a broker, a video is an excellent tool to help get your next project under contract!

Do you have any additional negotiation insights? 

Be sure to leave your comments below!

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{ 7 comments… read them below or add one }

Vania July 14, 2014 at 1:46 pm

Michael,

Brilliant indeed! Very creative way to use technology to reach your goal.

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Nick July 14, 2014 at 5:04 pm

Great post Michael! I never even thought about using video to explain your thoughts to the seller.

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Michael Blank July 15, 2014 at 9:48 am

Thanks! I’m still negotiating that 46 unit in Richmond VA and I am continuing to use this as a tool. Let’s just see if it gets me the deal -;) the sellers are set on the asking price, so I’m going to try suggesting terms (like seller-financing).

Reply

Nick July 15, 2014 at 10:01 am

Awesome! Keep us posted :)

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Carrie July 15, 2014 at 6:59 pm

Even though it’s all about business when it comes down to the financials of buying and selling properties, a personal connection wouldn’t hurt. The video idea is great, showing the seller how much you care by seeing real emotion through a story or connection.

This would be greatst advice for our listeners on the Creating Wealth Show (www.jasonhartman.com), where our host, Jason Hartman, interviews several successful real estate investors who share their negotiating advice and expertise as well. Check it out and let us know what you think!

Reply

Kyron July 15, 2014 at 10:58 pm

Great idea Michael!
If you don’t mind I’m going to do the same on my 48 unit deal.
I used jing to do a few screen captures when I started my negotiations and the video will be a great follow on to further justify my position.
One thing to note…you know that the first buyer fell thru and like you the seller is sort of fixed on the asking price. However, given the time that has expired and this being an out of state deal, the seller has come back and offered to c’arry back’ some of the deal AND has offered me a 4plex that seems to be below market price given the prelim numbers I ran on the deal analyzer.
Developing a relationship with seller’s agent has been good too. The bottom line is creative things canhappen as a deal works through it evolution…patience is also a key ingredient. All the best and I hope you get the deal under contract near your terms!

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Bryant Maten July 18, 2014 at 5:17 am

Newbie investor longtime entrepreneur. This is great! Wouldn’t it be even cooler to develop a platform that would allow us wholesalers to send out videos to prospect sellers instead of letters?! I working on a way to gather the email and telephone number of potential sellers. Or am I barking up the wrong tree? Any advice is appreciated. Thanks!

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