Christian Osgood bought a guitar for $2,650 after the seller dropped from $6,000, then applied that same negotiation method to real estate: underwrite your max price, offer it, stay firm, and follow up consistently. He's acquired over 600 rental units in five years using this approach.
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You negotiate a real estate deal like you negotiate the price of literally anything else, but I think the size of the deal, the multimillion dollar deal, or even the multiple hundred thousand dollar deal, the numbers are so big that we get stuck in the math. We get stuck in the how and the why. It feels like a bigger thing than it is. But how do you negotiate the price of a real estate transaction? You negotiate it exactly like you would anything else. I often get asked on this channel, why is there a guitar in your background on the real estate channel? And it's not just because I like guitar. This guitar in particular is negotiated exactly the same way I would do any real estate transaction. The difference is the dollar amounts are a little bit different. This was listed on Facebook Marketplace 6 months ago. It was listed for $6,000. Now for context, this is a Heritage Custom Shop H530, which is a super cool guitar. I love this guitar. In my entire collection, this is probably my favorite guitar. However, for me to want to buy it, a true deal for me would be $2,500. Now for context, it's worth about $4,000, maybe $4,500 for the right buyer. So on this particular guitar, I offered the $2,500 that works for me. And the seller said, when it was listed at $6,000, uh, absolutely not, go away. 2 months later, I'm looking at guitars, this is still listed there. They've dropped their price to $4,000, which is again probably about what it's worth. I reached out and said, hey, just checking in, I saw this was still around, I'm still ready to go, I can pick up tomorrow, I can bring cash, and I can give you $2,500. To which they said, absolutely not, I'm thinking about dropping this to $3,500 next week. Said, awesome, no problem. 2 months later, it's dropped to $3,500. It's still on Facebook Marketplace. I reach out, I see this still hasn't moved. I'm still at $2,500. Now at this point, we're approaching 6 months to when I first saw this deal, this guitar. It was listed at more than twice what I was willing to pay for it. I wasn't pushy, I wasn't obnoxious. I just occasionally followed up and just let them know this is where I am at. They dropped it to $3,000. I reached out one more time. Hey, look it, I'm still good to go at $2,500. I know we've been back and forth on this for a while. I can do this tomorrow. Same thing I've been saying the whole time. They said, instead of no, they said, well, look it, you're only $500 off. Just bring the extra $500. Let's make this happen. I responded, you know what? My real maximum I'm willing to go on this is $2,650. I can pick it up tomorrow. I can run to the bank right now. They messaged back, okay, let's do it. I came up $150 on price. It was listed for $6,000. I bought it for $2,650. My original offer was $2,500. Does this mean that I'm an amazing negotiator? No, this is just how people work. If someone lists a deal online, and so you're looking at a listing on CREXi and the price is ridiculous, what people tend to do is not offer on it, which is absolutely stupid. Talk to the broker, get to know the deal, and come up with your price. Where is it worth? When you know where the deal works for you, reach out and offer that. If you're way off the price, approach the broker like this. Hey, I know we're coming in quite a bit lower. I ran the math. This is where I think the bank's gonna look at it. It's where I'm at personally. I know it's a lot different than the price that they're looking for. Is it worth putting together an offer or a letter of intent, or should we hold off? Sometimes they'll say, you know what, they're ready to negotiate. Let's go ahead and write it up and just see what comes back. Sometimes they'll say, no, that's too low. Either way, thank them for their time. If they want a letter of intent and you want to start negotiating, go ahead and submit that at this point. If they say no, leave, but come back 2 months later to it. It's probably still around because other people aren't usually going to overpay for the deal. If the deal's still there, come back. Same exact thing. Hey, I'm still at the same price. I'm curious if you guys have had any new action on this or any motion on it. Brokers are usually going to respond with, oh my gosh, yeah, everyone and their sister is interested specifically this week. Oh, awesome. Let me know if my price still works or where it's going to fall out at. And they always go, oh yeah, no, you need to get that offer in right now. It needs to be higher. Stick with your number. They're probably bluffing. And then a month or two later, come back. Hey, it sounds like none of those buyers came together. I'm sorry to hear that. Are they willing to entertain my offer yet? And what ends up happening is you'll offer at or near what your actual starting point was. You should be able to win almost every negotiation, or at least get almost everything you want if you're willing to underwrite the deal and just stick with your number. But I do this once or twice a week. I'll submit an offer on a deal where I know the deal works for me. I'm not lowballing everyone. Sometimes asking price totally works, but I'm always underwriting where does the deal actually work for me and submitting an offer. Where I think most people get lost in real estate as opposed to any other item is they don't do the part where they actually put together the offer. If you start negotiating, you just keep this flow going. You're going to find that consistently if you're doing 1 or 2 offers a week, you'll buy somewhere between 4 and 6 multifamily transactions per year. Truly excellent transactions that, you know, work for you. I have followed this model for 5 years. I have a little over 600 rental units. It's not magic, it's just consistency. The cost to you, much like buying this guitar, is a few minutes a day. I hunt for guitars online. I do the exact same thing with instruments. I have way too many in my house, uh, because I just love doing deals. It's super fun. This is a little version of the same thing, but the model is the same thing. You buy apartments like you buy anything. Where does it make sense for you? It does not matter if the listing price Doesn't make any sense. It doesn't matter if the seller wants too much. I'm not offering them what they want. I'm offering them where it works for me, and then I'm just sowing the seed and waiting to harvest the building, or the guitar, or whatever it is you want to negotiate. This is how you actually do deals. Any other online, you know, guru-y, like, "Ooh, try this secret method," this is how it actually works to buy anything, including real estate. Hope this helps. See you guys on the next episode.
