Seller with unrealistic asking prices
Hey BP community! Excited to announce that I have just closed on my first investment in August. Have been meaning to get back on here for some time. Anyway, I have finally gotten my first investment under control and running the way I want, now I'm eager for the next one. I have met some owners ( three partners) that own a mix of commercial and residential building. They are willing to owner finance, and they have done lots of upgrades such as new rooves, boilers, windows, porches, all the big stuff. Here is the issue, they had the mentality that you buy a building cheap, put a bunch of money into it and see it for a boat load. They don't quiet understand that the income a building produces plays a big part in determining the value. For example, they bought a 6 unit building for 40k put 300k into it, and are expecting to get somehwere aroind 350k. The town only has the building assessed at 225k and One of the buildings I just bought was a 6 unit that appraised at 195k. Granted my purchase was all 1 bedroom, and their building is all two bedroom, in a better location, and better condition. Absolutely this justifies a higher price, but not 155k more!
My question to you guys is this, what negotiation tactics can I use to make these guys realize that their prices are much to high and unrealistic?
P.S. I'm typing this on the BP app and it's being a bit finicky, I'm sorry for typos