Negotiating Prices With Your Buyers

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Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, www.thelandgeek.com. and on this week's roundtable, we have a nice, small, intimate group. We've got the most feared woman in the country, the terrorist hunter, Mimi Schmidt. Mimi, how are you?

I'm great. How are you, Mark?

I'm a little insecure about my mic at this point in time, but other than that, I'm great. We've got the technician, Eric Peterson. Eric, how are you? I'm good. Really good, really good. Good to see you. And of course, we got the Big Papa Tate Litchfield. I love it when you call me Big Papa Tate. How are you?

I'm good. Yeah, really good. Happy to be on the call today.

Awesome. Awesome. Well, let's just get into it. Let's just skip the pleasantry and Eric Peterson, walk us through it.

All right, so our topic for this week is going to revolve around the idea of negotia prices with your buyers. So, you know, a lot of times we talk about our terms pricing and our cash pricing. You know, we might discount a cash price, etc. But we don't really talk a whole bunch about just the idea of a potential customer calling you and saying, hey, you know, I know you're, you're asking for $99 a month on that property, but I want to do it for $90 a month or whatever the case might be. And so we thought we'd have a discussion around that and just whether or not we do that in any way. And I guess I could start off with a recent situation I ran into. I had a investor reach out to me who owns lots of different parcels of land, has worked with other land investors, and basically said, you know, I like this property you have. However, when I work with John Doe land investor, he sells to me for the same as cash, but I pay it off over two or three years or maybe four years, as opposed to your eight year term or whatever it might have been. So essentially he's asking for a term's price that is the equivalent to the cash price which I would collect now. And, you know, sometimes that's, it's a little hard to swallow. It's not the same terms that we're used to. It's not the Same return, but it's a sale, potentially. So is it a good choice to go ahead and accommodate that investor, especially in a case where this person might buy a lot of land in the future? I think so, but I thought we could talk about that.

I think it's a really good topic. And let's just go to somebody who won't negotiate with terrorists. Mimi Schmidt.

Mimi, I'm always willing to negotiate and make the terms more palatable for the buyer as long as my yield, you know, as long as it's still profitable for me. Right. Someone today, particularly if they want to, you know, pay a little more cash up front. Right. If they make sure they give me 20% cash up front instead of 10, I'm all for that. But definitely if they want to pay 199 versus 99, that's fine with me. I just have to run it through the yield calculator and make sure it's not below about 80.

What if they want to pay 85 rather than 99?

Oh, definitely. I'll go for that and make it a longer term. Yeah, and it depends upon how much down they're going to put down too. Right. So they want to put a couple hundred dollars down and then to go to $85 a month, I'm all for it. Nothing wrong with that.

Big Papa, you've got a skeptical look on your face. You're really noodling on this hard.

I am, because I'm kind of viewing this as two different questions. And the first question is, is my monthly payment negotiable? Let's say I'm looking for 100, and he comes back and says, hey, I want to do 85. As long as the numbers make sense, I'd accommodate that. But I don't think I'd ever take, say, my cash price and discounted or owner finance the cash price over a shorter period of time. That's where I'm struggling with it, because ditto. I'm willing to work with people because I see the value in keeping a customer happy and building that relationship. But when I buy a piece of property, I'm taking in a lot of different variables into consideration. You know, time value of money just being straight out, you know, off the top of my head. That's something that if I invest $1,000, I know that on every other property, that thousand should Yield, you know, three to $4,000 in profit. So if I'm cutting that down and saying my thousand dollars is now only going to produce maybe $1,500 in profit, am I doing my shareholders.

Harm?

Essentially? So I don't know. I think it would depend on how serious the guy is. But cash price is discounted and terms price is higher. So I know if Scott were here, he'd be saying, like, listen, all of my properties are sold at the exact same price. The cash price is the terms price. And so you already are getting a discount because I'm even considering working with you without a credit check or owner financing. So Scott, really, I don't see Scott, like bending over backwards and slashing the overall value of the property by 20, 30% just to keep somebody happy. I don't know.

I do have some in particular locations also where I don't care who you are, I can't budge on the price. They sell quickly and there's a demand for them and it would hurt my business. There's too many other buyers that would pay the full price.

I think that's a really good point, Mimi, because I don't think when we negotiate with buyers, we can sort of have this rigid set of rules. Every property is unique, every county's unique supply demand can be unique. Your pricing model could be unique. And so you almost have to think about it in terms of not only just yield time value of money, but also just what's going on with you at that moment in time. Financially, would the cash flow at that point in time benefit you where you could put that money right away into another deal? Or do you know, like, Mimi knows that, hey, the juice isn't worth the squeeze on that deal? Because I know that if I wait three more days, I'm gonna get my retail buyer. And also I think Eric brought up a good point, was that they're saying, hey, look, if you do this for me, I'm gonna be a really good buyer in the future. So I'm not just buying this one. I'm gonna be buying lots and lots of from you in the future that also has value. But I think what Tate said in the philosophical, you know, idea of terms is terms, cash is cash and that's it. We're not going to give you a cash price and finance it. We're just not. I wouldn't be able to go to bed and with any self respect, right. If I. If I was doing that. So a lot of times you go ahead, Tate.

Well, I was gonna say. But then I'm thinking about what I just said and now I'm even questioning what I just said because, you know, it's not about what I want. Right. It's about what the market wants. It's about what my buyer tells me he's willing to pay. And if I come out here and I'm saying this Property should produce 10, it should sell for 10,000, and somebody comes and says, Here's 7,500, am I really gonna let that deal go? I mean, if the numbers work and I'm still making money, I guess. I don't know, Mark, I'm beginning to second doubt or second guess even my own, my own opinion here.

Well, I don't think you're second guessing. I think what you're saying is that you would discount the price. If they offered 7,500 and you had it at 10,000 and you had no other market comps to go on, you might at that point in time do it. But if you've been selling that same property for ten thousand, ten thousand, ten thousand, I come to you and say, okay, Tate, Here you go, 7,500. You might tell me to go pound sand because you know, Mimi is gonna be picking up the phone in a day or two and doing it for 10,000. So, Eric, given all these different responses, what's your big takeaway?

Well, I think ultimately it comes down to a property by property basis. I mean, kind of like Mimi said, you know, if you're in an area where you're turning those properties really quickly and your margins are maybe tight, there might not be room for negotiation there. However, if you're in a different area where maybe the property takes a little longer to sell or maybe you have higher returns than normal, maybe you have that room to go ahead and discount and essentially take a cash price for a terms deal. In this particular case, I think I'm going to do it because the bottom line is my cash price was higher than 300% return on this property. And by this potential customer financing the property, his payments are going to be more than double what I was asking for.

So.

I'm probably going to do it. But I did struggle with it for a long time yesterday, going back and forth because I'm like, no, I don't do this. I don't sell a property at a cash price on terms I'm just not doing it. But then the more I thought about it, I'm like, it's a win, like I'm making money. Why would I not sell this property? So this morning I sent the guy the email and I said, do you want to do the deal at this price, Eric?

Ultimately, we're in the business of selling property. So I think it's a, you know, it's easy for me to say, I would never negotiate, but if I had somebody who was serious making those kind of offers, I would accommodate them. I'm almost certain I would. Because it's all about building that passive. And yeah, it's gonna be shorter time, but we're in the business of selling land. And if you're selling land, you're making money. So.

Yeah, and if he's buying, if he's buying more properties. Okay, so your margins might be thin on this one, but that doesn't mean it won't be on the next one or the next one.

Right.

I actually wanted to prove it up front and say, look, I'm willing to work with you, but you gotta, you know, you gotta buy two more properties for me within the next month, you know, 30 days, and just, you know, give me a Good Faith $500 deposit right now so I know you're serious, because I've got lots of people always talking to me about how they're gonna be this great long term buyer, they're gonna buy from me over and over again. But there's this guy Mark at Frontier Properties, and as soon as he calls you, I never hear from you again. So I really want you to lock down your loyalty to Landopia right now. And then I'll be flexible like a yogi, and I'll work with you. I'd want more than the one deal personally if I was going to give that kind of discount. So if anything, I'm going to, anything I'm going to give, I'm going to ask for something else in return. Tate, what do you think?

I think that's smart. I really like that. I mean, if the guy is gonna be kind of one of your VIPs, have improve it, you know, with loyalty comes added bonuses and perks. So I agree 100%, give a shot. I mean, the worst case is he says no, and you say, okay, fine, let's just go with what we originally talked about.

Or you say, well, look, in that case we'll just meet in the middle between cash and terms. Yeah, that's fine. And then we can kind of go from there. Because you're saying one thing, but you're doing another. And I, you know, I'm going to negotiate too. I'm not going to give you what you want. It's a negotiation. Mimi, what do you think?

Great. Yeah, I'm on board.

Yeah, absolutely. I mean, you could even Eric say as a bonus, if you have a pesky neighbor, have the terrorist hunter, she's got a drone. We'll take care of it. No worries. Right. So I'll really have your back.

So you did the deal?

Not done yet, but I did make the offer.

All right.

All right, great. And you're making the offer with your self respect intact, all right. Right.

I think so.

Well, I mean, the numbers. The numbers are right. I mean, you're not going to go on the mastermind call and be like, oh, I, you know, I only made 350% on this deal. I feel horrible about it. I mean, yeah, the numbers are the numbers and, you know, it's. It's still an amazing return.

A deal's a deal. A deal's a deal. At the end of the day, I mean, I'm not going to get upset at anybody for selling property and making a profit. I mean, if you're doing that, you're doing okay by me. So I would do it, Eric. I'm glad you did.

And, you know, I think ultimately, you know, we in the community, we all talk about our deals and we don't ever really talk about, you know, do we negotiate those at all? And I think it's important that the community does know that there is a time where it does make sense to negotiate. You don't always have to stick to those numbers. Don't walk away from a good sale just because you're not going to make that desired percentage. As long as you're going to make a decent profit, it's worth accepting and moving forward.

Yeah, I'll never forget that. One of the earlier Mastermind calls with Bob Demick, and he sheepishly had to announce to the group that he only made 250% on his deal. And he was really just embarrassed about it. And we're like, no, that's amazing. It's 250%. Like, where else are you getting that kind of return on your money? He's like, well, yeah, but you guys are always making, you know, 300 to 1,000%. Like, no, it's not always that way. So I think the moral of the story is you have to be flexible in business. Yeah.

Yeah.

All right, well, I just want to remind the listeners that today's podcast is sponsored by Flight School. Learn more. Go to the landgeek.com training. Wouldn't it be great if you could start working this business in 14 weeks with your Sherpa, Scott Todd, taking you up the mountain of land, investing step by step, making sure that you get up there quickly, efficiently, safely? That's what flight school is all about again. Learn more@thelandgeek.com training schedule call with the zen master, Max Zaino or the nightcap meister, the dude buddy, Scott Bossman. All right, so Tate had an interesting mastermind call last week that he's going to extend to everyone. Tate, what's going on?

Yeah, so last week on the mastermind call, I challenged all of our attendees to tell me how many properties they were going to sell between that Wednesday and October 11th. And just as an example, we had people saying as many as two or as many as seven. So, like John Burnett, he came out and said, I'm going to sell seven properties in the next basically 30 days. And the reason we're doing this is we want people to really put the pressure on themselves and on their marketing and get these sales that really move the needle. And there is a catch. Everybody that committed to participate in this told me how many deals they were going to do. And if they don't achieve hit that number of deals, they have to make a $25 donation for every property that they don't sell to the charity of their choice, and they will need to submit a receipt. So I know that they lived up to their end of the bargain. So we're doing this because the market's hot. There's tons of buyers out there. And you guys, if you're marketing every single day, if you're posting new ads on Facebook and tons of ads on Craigslist and hitting the land Moto buyers list, you should be getting leads. There's no reason for you not to. So we wanted to extend this challenge to all of our roundtable listeners. If you'd like to participate in it, please feel free to shoot us an email. Let us know how many properties you're going to sell and commit to it. Do whatever it takes to move the needle. You know, this is a. It's a good opportunity. And what we found in the land geek coaching community is when we set these hard deadlines with kind of a. I don't know, a challenge, I guess, people tend to step up and they tend to achieve these. So we're extending it to everybody. Join in with us. Sell some properties. Eric's about to get his first of the last couple days. So that's good. Let it be an example. Do whatever it takes to get these deals closed and join us. You know, build that passive.

I love it. I think it'd be great if everybody could celebrate together at the Phoenix Boot Camp, which is coming up in five short weeks. Five short weeks. Just go to lanky.com forward/boot camp. We do have a few spots left. And then you can go up to Tate and just drop the mic and be like, yeah, I took the challenge, sold my three properties. Boom. Just not one. Imagine, you know, like a fake mic. Those things are expensive.

Yeah.

All right, we're at that point now of the podcast where we get to pick on Mimi and ask her for her tip of the week. A website, a resource, a book, something actionable for the art of passive income listeners to go improve their businesses, improve their lives. Mimi Schmidt, what do you got?

Well, it's a tip that isn't mine. I'm going to share it, though. We were talking about it before we started the podcast. It is called landgrid.com and it is similar to Firstam or Datatree for acre value. Right. First Am is hard to get access to. Acre value is expensive and you have to sign up for each state one by one. It's more money with each state. So this, this is very interesting. This landgrid.com because it's 10 bucks a month or a hundred dollars a year for the pro version. So you can click on county, the county, find out some interesting information about the county itself, but then you can actually make lists, import and export data from it. So this might be worth really tinkering with. I might make a switch.

Yeah, I'm signing up for it right now. This is really cool. And it's really cheap, actually.

Yeah.

Amazing. And there's a free account too. You just start playing with it for free.

Yeah.

Wow. This is a great. Yeah, great, great tip. Mimi Schmidt.

I can't take look at all this stuff. Might save me a couple hundred dollars next year.

Wow. Yeah. If anybody wants to know how big the market is, 145 million parcels online. Wow. 3.8 million square miles. Yeah, I mean, I actually, I think it's bigger than that. I just think that's what they have on their software.

Oh, I think it's way bigger. It's kind of interesting because we went, Scott and I attended a conference recently, and the market for that one was just over 40,000. And as soon as that number got thrown around, the scarcity mentality really started setting in. And Scott and I were kind of laughing because we thought 40,000. I mean, we know people who own almost that many parcels. So it just goes to show you how this market is just. It's beyond the control of any 5 or 10 or 20 people or organizations. There will always be room for the little guys. So if you're on, if you're hesitating, there's no reason.

Yeah, I mean, the great thing about this market is let's say that you've been negotiating with a bulk seller. I don't know, let's say Colorado. All of a sudden, a guy like Eric Peterson starts negotiating for it as well and actually takes the deal from you. You can always go to Eric, and at some point, he's gonna run out of money. Maybe he'll wholesale a couple of those deals for you. Eric, what do you think, buddy?

It's possible.

Running low on some of those fives in Colorado. What do you think, pal? On the podcast right now, will you commit?

See how quiet he is, Mark?

I know, he's. He's slippery, that one.

He's, like, biding his time. He's like, maybe if I don't say anything, they'll just move on to the next topic. Or Mark will get hungry or tell us about intermittent fasting or something else. Like, he'll just lose his. And then, boom, he's on to the next topic. Pelotons.

Is it time for Let Freedom Ring?

It is time. It is time. Are you guys ready? 1, 2, 3. Let freedom ring. Oh, my gosh.

I don't think it was that bad.

It wasn't that bad, but it wasn't that great. You think it'd be easier with a smaller group, but not necessarily.

I mean, I can't just. I feel like I should close my eyes and just kind of feel it, but I don't know if that's the right way to do it either.

Yeah. Oh, by the way, Tate, I was watching Top Chef last night. I love that show. Have you guys watched Top Chef on Netflix?

I told you, it's the most amazing program ever.

The stories of these chefs and how they come to be is absolutely incredible and inspiring. And really, it's not even so much about the food and the creativity of it. It's more about their origin story and how they came to be. It's really just incredible show.

But you gotta.

I always. In what way?

If you watch it too late at night, next thing you know, you're raiding the pantry and just, like, stuff in your face because they're making something fantastic. Or in my case, I find myself on, like, Uber Eats and delivering food to the house at, like, 9:30 at night. Then the guys ringing the doorbell, waking up the kid. You know, Allison was not happy about that. So just be careful. That's kind of like a word of caution to. To everyone.

You Know, it's so funny is I was actually watching Yesterday Jiang Kuan, the Korean monk, and she was talking about soy sauce, and all of a sudden, I'm like, you know what? I'm gonna get kung pao shrimp today for lunch, and I'm gonna, you know, do the soy sauce thing, and I'm gonna eat the chopsticks, because the whole time they're eating with chopsticks, you know? You know, Jean Kwan in me, even though she's Korean, she'd really be going for Korean food.

But you need to do that.

She makes modest. Well, she's like. She's a monk. She makes monastery food. It's very simple vegetarian food. So it's. I'm not. Not ready to take that vegetarian leap quite yet.

It's a cool program. Really cool program.

It's really cool. So go ahead, Eric.

I was just gonna say it is. I enjoy that show as well.

Yeah. Mimi, what are you watching these days?

Well, I'm hoping to go to the Downton Abbey movie this weekend. We'll see. It's coming out. I'm excited. We had a Top Chef come to Japan when we lived there and cook for us. That was like, a presentation. There were, you know, like 50 people. It was the best food I'd ever eaten. It was absolutely amazing.

Really? To this day.

Yeah. It was so good. I mean, literally, he, like, made this basket out of woven cucumbers, and he had salt cure to salmon. It was super interesting to. It was just. Yeah, they do interesting stuff.

Yeah, it's amazing. Yeah. But I mean, incredible stuff.

Yeah. I'm hoping to see Downton Abbey. We'll see.

Have you. Did you watch the entire season? Like, all the seasons?

Yes, I did.

See, I. You know, once it started getting real dark and I couldn't watch it anymore, I think. I think season three, I stopped. But I'd love to watch the movie.

Yeah, it's good. The two grannies are funny. The way they take jabs at one another. It's hilarious.

I quoted Downton Abbey the other day on Facebook for Labor Day, because there's, like, that scene where, you know, one of the laborers says to the royalty, one of the grandmothers, hey, have a great weekend. And she says, what's a weekend? Yeah, that's like, all of us. What's a weekend? Our Saturdays and Mondays are the same.

Yep.

Yeah. All right, well, thanks, everybody. Dear listener, thank you so much. If you're enjoying and getting value from the podcast, please share it on the interwebs, and hopefully you'll be, you know, doing three little favors. You got to subscribe, rate and review the podcast. Send us a screenshot of that review to support@thelandgeek.com we are going to send you for free the $97 passive income launch Kit. And if you just put in the subject line, you know, listen to the bonus material, because this is actually the bonus material. After the official podcast, we're going to send you our wholetailing course, how to flip, plan 30 days or less and double your money 30 days or less for free as well. All right, thanks everybody.

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