Real Estate Investing Basics

It Can Take Time to Work the Deal

Expertise: Landlording & Rental Properties, Real Estate Investing Basics, Flipping Houses, Business Management, Personal Development, Mortgages & Creative Financing, Real Estate News & Commentary
210 Articles Written
real estate negotiation

Real estate is an exciting and interesting field to work in.  Sometimes the deals quickly fall into your lap.  That’s exciting!  Other times the deal is not made right away.  It can take months, even a year or more to get the deal worked out.  That’s when it can get interesting.  For example, I recently purchased two small apartment buildings which took me over a year of working with the owner to get closed.  I am glad I persisted as these properties are great additions to my portfolio.

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Often these deals that take a bit of time to put together are the result of an uneducated owner. The owner may still have those 2007 values in their head and need to be educated on current values. They may not realize the conditions of their properties and may need to be educated on the costs and time involved to bring things up to current standards. Or there could be a whole host of other variables.  Whatever the cause, what the seller needs is time; time for him to become educated on the current market conditions.

Here are some pointers on taking time to deal with an uneducated seller.

  • Always be nice and considerate.  Never be rude, condescending or disrespectful.
  • Make an offer based on numbers that work for you and submit it.  If rejected at first, let the sellers know they can contact you at a later date if they wish.
  • Check back with the seller (or their agent) every few months or so if the property continues to sit on the market. Let them know your offer is still valid.
  • If you can, be open and meet with the seller and show him how you have arrived at your offer price.  Describe for him the anticipated rents, repair costs and the costs of money.  Sometimes seeing the numbers is the best education.
  • If the sellers are firm on a number, perhaps you can work the deal another way, through soft terms.  Perhaps the sellers would hold a second mortgage with a nominal interest rate.  This strategy has worked for me in the past.
  • Do not lose the deal over a few thousand dollars.  If the seller does come down close to what you are asking, but will not budge anymore, you have to ask yourself if it worth it to lose the deal for a few thousand dollars. Can you make it up in cash flow later?
  • Above all do what you say you will do and remember my first point.  If you make them mad or insult them, they may never call you back.

At some point however if the seller refuses to budge you must move on.  You cannot tie up your money and resources forever, and there will always be another deal out there.  When should that point be?  It depends on you, the seller and the particular circumstances of the deal.  Trust me you will know when it is time to move on.

Until next time, hopefully not too long, happy investing!

Photo: Aleutia

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.

    Michael Borger
    Replied over 7 years ago
    Nicely put, Kevin. All your points are spot on. Sometimes the deals we think are slam dunks end up taking the longest time. I have one I’m working on that’s about six months past when I thought it would close! Patience is key, but I think your first point is very valid and often overlooked as relationships are so very important in this industry. Even if the numbers don’t make sense today, maintaining the image of a polite and respectful professional can be the difference in securing the deal at a later date.
    Kevin Perk
    Replied over 7 years ago
    Michael, Thanks for reading and commenting. One can never be too polite, respectful or patient with a seller. Many times we may be dealing with something that has sentimental value to them and in a multiple offer situation, they will remember the person that treated them well. I personally know other investors who have gotten the deal despite higher offers from other investors simply because they were nice and took the time to get to know the seller. Like you say relationships are key in this business. Again thanks for commenting and good luck with your deal. Let us know how it turns out. Kevin
    Replied over 7 years ago
    Hi Kevin! great posts and all the points mentioned above in the post are spot on and certainly a great advice of how one should deal with the long time taking deal and how you can be tricky to get the deal at the end almost as you wanted for. Thanks for providing wealthy information 🙂
    Kevin Perk
    Replied over 7 years ago
    Thank you for the kind comments!
    Replied over 7 years ago
    Kevin, this is so important for investors to understand. So often, we are viewed negatively as “taking advantage of people’s unfortunate circumstances.” Educating them and others about when we are the best option and why our numbers are what they are, is the best way to thwart that kind of attitude.
    Kevin Perk
    Replied over 7 years ago
    Kristie, I could not agree more. Thanks for reading and commenting. Kevin