- Knowing your bottom-line price — Where you want to end up at. Whether you are negotiating with tenants, new property, new business ventures, you need to know what your bottom-line price is. Also knowing what price you would get excited about and aim for that as your target price.
- Get them to say a number – This is very crucial. Try to never negotiate first. Have the other party give you a price first. I see a lot of “Open for offers” deals in real estate, but you can get a price out of the broker. Always get the other party to say a price first if possible.
- The more you know the better – This is especially important when dealing with tenants in the retail sector. If you track their sales and you know the tenant is doing well in your center, this gives you a lot more room to negotiate and up their rent. You MUST collect sales if you own any kind of retail. But doing due diligence in ANY real estate field when negotiating is crucial. So, do as much due diligence as possible.
- Countering Proposals – After you get a price always counter their proposal with a number that is better. When I am dealing with tenants and they send me a proposal, I almost never accept the proposal right away. We go through several counter proposals until we land on a mutually acceptable agreement.
- Learning to walk away – This is when you can’t come up with a mutually acceptable deal and you know what your bottom-line is. It is important to communicate that this is your final offer/price and walk away. But, the crucial part of this step is to walk away with your door opened. I have seen so many seasoned investors use this method and they have received calls back weeks later for the deal at the bottom-line price. Don’t ever settle and know what your bottom-line is.