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March 21, 2023

Ep 360: Staying In Negotiations With A Difficult Seller With Aileen Prak

Ep 360: Staying In Negotiations With A Difficult Seller With Aileen Prak
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0:00 Hey, welcome to today's episode of the habit this podcast, I have a special guest Miss Eileen prac. If you have not seen the other episode, please go check it out. We cover a lot of cool stuff. Interesting stuff. Please go check it out. But Miss Eileen. Hi, what is your cool, interesting story for today's deal breakdown. 0:18 So we had a seller that we had actually went to go buy was a multifamily unit that we went and we had actually put a bid in and we ended up being the best and final on that one. And the seller ended up choosing another buyer at that time. And so a couple months later, we checked back in with a broker find out that the deal had actually fallen through. And so we asked if it was still available, and the seller came back. And they said yes, they wanted to work with us. Because the other buyer was unable to close. So what happened was, you know, we ended up going back and forth for several months during negotiations. And the seller had a lot of requests that they wanted to put in, they wanted to write our entire operating Miranda memorandum and like negotiations, and they put in a ton of different requirements inside the terms and conditions. And as we were going in doing our due diligence and deep diving and reviewing of the documents were like, Oh, wow, this is all in favor of the seller. And they were kind of quite interesting requests, to say the least. But short stories, or long story short, it took us several months, going back and forth with the seller, and he decided to finally everything cleared up, we were good to go. And then he goes, okay, yes, I'm ready to sign the purchase and sale agreement. So we go in, and then we put in all of our Terms and Conditions again. And then he comes back and says, Oh, wait, hold on, I need to check with my CPA to make sure that all my taxes stuff, I'm not going to get this huge tax bill at the end. So he goes back and does all this back and forth. Again, it took another couple of months afterwards. And we ended up almost walking away several times because it was quite difficult negotiating with the seller. But we ended up signing, getting under contract for the deal, we got the deal for $1.6 million less than what we had originally put it in about a year before. So that ended up working out for everybody. 2:21 Wow. So the whole contract period of negotiation was a year long. 2:27 Well, when we put the initial offer in was more than a little more than one year ago. And then we had done then we checked back in a couple months later. And that contract had fallen through with the original buyer. And we decided to stick it out and work with the seller, we got into different options like oh, maybe seller financing would work, maybe, you know, you could become a limited partner on some of this and putting some of the equity back in. And we did a lot of creative type of financing with them. And all of that kind of went back and forth went back and forth. And it was really difficult to communicate because he was really adamant about getting very specific terms and conditions that you we never saw from anybody else. But we were very persistent. Because we're like, Okay, this is a great deal if we can make it work for all of us. And making sure it's like kind of a win win. But it ended up working out the end because we got a $1.6 million discount. 3:27 Now that's amazing. One thing I liked about I liked the retreading part, it's kind of annoying when it comes when it depends if you're buying or selling the retreating part. Like I had recently had had I had a buyer come in and they're like, Oh, can you pay closing costs? I'm like, yeah, if you just buy it at our price point, I don't care and like the whole retreat factor, like it's kind of annoying when you're the seller. But when you're the buyer, you come in retreating. It kind of it's I feel like the fun of real estate comes out and you have the transaction. So like, I had had an offer come in today that the he sent to his attorney, and they're like, oh, we need, we need these red lines, stuff changed. And like, Oh, if you're gonna read by this, I'm going to ask for something else. So I'm always like, it's always the negotiation factor that comes with these types of transactions. And it's always like, well, if you're gonna pull here, I'm gonna pull from the side a little bit. And if you're pulled there, and it's always it's always very interesting. Like, you don't always want to pull too hard, because you might blow up the deal. But it's a it's a, it's a level of finessing between his attorneys, your attorneys and your negotiation tactics, and your strategy of what you can make it make it work and how you can make it work. So it's always I think it's your, your negotiation that has to be out when he when it comes to retraining. And you have to be ready to you have to know what to ask for. 4:41 I think that's the biggest thing. Yeah. And the funny thing is, if you had gotten with us originally, a year ago, you would have gotten the higher price and with the interest rates that we had at that time, the deal worked out great, but because of where the environment is now, you couldn't get the same price. That was offered a year ago. And so it ended up costing more money than what they expected. So you kind of pick and choose, 5:08 even that alone, like, I'm glad to say it was even negotiable at that point. Because sometimes like, I want my price and you come up, I'm sure you hear those words will come across all the time, too. But it's just like, you gotta you gotta give me a break, like a year goes not right now. Right? So it's a good thing, you got the deal. And it shows the negotiation and the struggle, you have to retrain sometimes and to get get a win win. But some of these sellers are crazy. 5:36 Yeah, but then at the same time, you've got to understand, like, what's important to the seller? And what are they willing to give up, and what are some of the things you're able to give into, and then you're able to strike some type of balance, because at the same time, you don't want to leave a bad taste in the sellers mouth as you purchase their property. Because they could potentially have other deals, it could open you up to other other opportunities as well. So you kind of have to strike a nice balance in between, you know, given a little bit, but a little bit, they have to give a little bit back to you, too. 6:08 So I have a side story about that, too, that you mentioned. So our first our first deal we did over a million dollars, we're signing another contract with that same seller again, and he knows we do good business or getting a second deal from him. And that's a perfect example of that you always you always need to be be at least negotiable. And Nico winwin happen and you never know it might come back to you with another another property. 6:33 So you want to be known as being good to work with not the difficult person because you got to think about this in the long terms and you know, how do we build up our relationships and and work with people for long periods of times instead of just transactional like one time deals. 6:50 And you'd be surprised that when you start operating at a at a higher level, you'll come across the same broker seller, maybe buyer every once in a while, and you'll come across that same person again. So you have to you have to be right all the time. This is such a great episode. I hope everybody learned a lot on this one. Where can people find you online? I have your bone invest capital. I don't know if I said that. Right. On invest. Don't invest one of his capital. And then of course you have your podcast. How they did it? 7:23 How did they do it? Real Estate? That's right. 7:25 So please go check out our podcast, please. But she got her her website online and please go check out the other episode. It's amazing. You'll see. Thanks, guys. Thanks for tuning in. We'll pin joints up so thank you Eileen. 7:36 Thank you

Aileen PrakProfile Photo

Aileen Prak

Aileen Prak is a real estate investor and the Co-Founder of Bonavest Capital. Her focus is on investing in multifamily syndications both actively and passively across different markets in the US. Aileen is also the co-host of the weekday podcast How Did They Do It? Real Estate, where they have interviewed over 600 real estate experts.

Daniel Esteban MartinezProfile Photo

Daniel Esteban Martinez

Host/ Ceo/ Speaker

I have been an entrepreneur since 2018. I come from a regular home just like most people. My dad worked on the roads in the Chicago area for over 30 years. He always taught me to work with my brain, instead of my body. Your body can only take so much abuse. I learned so much from my father. He always pushed me to work smarter and not harder.

I have owned and operated a trucking business for 2 years. I started learning real estate in 2019. Fell into the Data & Skiptracing business in 2020. My partner Anthony & I started Hivemind in 2021.

I have done a ton of different jobs coming up from painting, to door-to-door sales, telemarketing, truck driving, and loading trailers. What I learned most is that I want to stay in the digital business space. The leverage you can have delivering digital products to the marketplace can yield limitless possibilites.

I started The List Guys in 2020. It is a data and skiptracing service. We provide seller and buyers list nationwide. My clients have been getting great results and I am proud to help people killing it.

I started the Hive in 2021 with my partner Anthony Gaona. It is a real estate and business mastermind. It also comes with a all in one CRM, that can host unlimited websites and users.

Starting the Hivemind has been an amazing journey so far. Seeing one of our users make his 6 figure month in June 2021 leveraging our software, I know there will be plenty more to come!