When you’re in the process of negotiating, or in the process of getting the deal and getting it done, it’s not only about the way you’ve made an impression or how you talk and the connections you have. Your decisions, your ways, your habit… at the core of it is how you have set your mind to do the deals.

There were once two real estate investors. Both were having trouble with getting a deal. One was in the verge of giving up. But he thinks, “Just get it done. If it doesn’t work, there are plenty more out there.” The other was about to give up, but then he thinks, “It’ll work out! I just need to set it up nicely and do more.”

Which one of them do you think will last longer in the real estate business?

Generally, the answer would be that it would depend on the situation of the two investors. It’s either they’ll find more properties to invest in or they get no luck at all. Let’s face it: Luck is also part of the succeeding in this business. Yes, you’ll need techniques. Yes, you’ll need skills. But you’ll also need luck.

Right? Not quite.

You see, luck is only a part of it. It doesn’t make the whole of it. Just because you weren’t lucky with a couple of your deals doesn’t mean you won’t win over the others. Besides, it’ll take more than luck for you to succeed and stay floating the world of real estate. While luck can have an effect on your deals, there is one thing more that will keep you on top.

What is important in a world where luck can be either an ally or an enemy is your mindset. Do you think positively or negatively? Do you think that after a series of failed deals, you can get another deal that will strike you rich? Or do you think that after a couple of deals that went wrong, you have no more chance to get back on track?

Your First Deal

Go back to your first attempt in investing in real estate. What did you feel when you completed it? If it was a failure, what made you stand up again to try another one?

It’s all in the mind. It is how you’ve set your mind to play the deal and make something out of it. Techniques and skills would be nothing, would mean nothing if you don’t have the mindset that you can use them properly in your negotiations.

You’re probably going to ask why. Why is the mindset so important for a real estate investor?

Looking back at your first deal, what was it that you were thinking? Did you think that you would succeed? Did you think that if your first deal would fail, then you would just forget about being a real estate investor? What if you really had failed?

Losing a deal would drop your confidence big time, wouldn’t it?

So in order for you to stay and be successful in the real estate business, you have to have a long-term business behavior as a part of you. And one way to acquire this behavior is setting your mind on the right path.

Subconscious Programming

There is a conscious part and a subconscious part in our minds. The conscious part is responsible for making your business goals. However, it is the subconscious mind that effectively retains your behavior.

The subconscious part of our mind absorbs about 83% of the information we take in. It stores your beliefs and behavior and has a prominent spot inside us that it can stop you from taking action because of fear, doubt, and anxiety.

In setting your mind on the right attitude to take, you will need to control your subconscious mind. Controlling your subconscious mind will enable you to ignore fear, doubt, and anxiety. It will help you create a confidence in yourself that will become apparent in how you negotiate and go about your business.

It’s Not the Market

In analyzing and re-patterning your mindset, you will see that if you lose in a deal, it is not the market that it at fault. You will see that the problem does not lie with any external factor. It’s all just in your head.

The biggest challenge is YOUR HEAD.

You should put in the right attitude, and put your head in the right place. Do not think of negative thought. Don’t ever think that this deal is not made for you and that you’re not worth the profit. If you want to be successful, you should not allow negative thoughts to enter your brain. It’s because people think that they can’t, that they focus on a thought that they can’t, that they self-destruct and fail.

Re-Pattern Your Brain!

Start first with your vision — a vision that you can succeed in the real estate business. People would say that imagination is more powerful than knowledge. Use your imagination to push you forward. If reinforced with experience, then surely you would succeed!

There is a saying: “Nothing stings like a dream unfulfilled.”

So stop focusing on why you can’t and why you’ll fail and start to focus on how to achieve high level performance! Focus on positive thoughts, focus on your vision. Then work, experience the real deal, and learn from them. Take the correct massive action. There is power in belief, and it has been proven by the many real estate investors that have succeeded in the real estate world.

With the many tips and advice being given by successful real estate investors, it can become difficult for beginners and striving real estate investors to take in everything. All those mounting information will become a jumble in the head in the process.

That’s why it is important to have a system in investing in real estate, a system that you have researched on and one which you have tested and corrected.

T – time tested

R – results proven

U- unique

E – effective

S – save

Y – your

S – self

T – time

E – energy

M – money

This will become the code of the TRUE SYSTEM of real estate investing.

Within this system, the process of real estate investing can be broken down into ten steps. This process will be your guide in how to buy right and win, gaining wealth and profit!

THE TEN STEPS

1. Put together a “Power Team”

Your power team will be made up of the entire team that you’ll be working with throughout the process of investing in a property. The power team consists of realtor or brokers, lenders or bankers, home inspectors, contractors, appraisers, attorneys, accountants, and other people who are necessary to start and finish the project.

2. Locating Properties

In locating properties, you can either look for it in your area by driving around and looking out for notices of sales or foreclosure, or you can look in the Internet and do a wide search on properties that you can invest in. The following are some sites that can help you search for property:

www.ocwen.com

www.homesales.gov

www.foreclosures.com

www.resales.usda.gov

www.buybankhomes.com

www.firstpreston.com

www.hud.gov/homes/

www.homesteps.com

Other sources to know where to find properties are just around you. You only need to ask. Ask your family, your friends, associates, or people in the business. You can look it up on record services or auctions, too.

3. Research Property

Once you’ve found a potential property, you normally don’t go in and take the plunge. First, you need to do a thorough research on the property — its area, the market, the deed, insurances, mortgage, and a lot more.

Here is a list of websites that can help with your property research:

www.hpapts.com (Hendricks and Partners publication and website)

www.city-data.com (for specific city information)

www.census.gov

www.bea.gov (Bureau of Economic Analysis)

www.rentslicer.com (market rents)

www.huduser.org

4. Inspect Property

The home inspectors in your team can handle this. But, of course, you should still know what the property has and needs.

Here are websites that can help when you’re looking for home inspectors:

www.ashi.org (American Society of Home Inspectors)

www.hometeaminspection.com

5. Financial Analysis

A financial analysis is needed, and it is crucial that you have one. You need to come up with a solid assurance that this project won’t go down the drain. Project budgets and calculations as to how much the property will cost you and how much it will bring back to you.

One of the bases in the financial analysis of whether or not a property is worth investing in is the CAP rate. It is the rate of return on net operating income considered acceptable for an investor and it is used to determine the capitalized value of a property. The higher your CAP rate, the better results you’ll get. A cap rate of 10% is considered a very good deal. Just remember that it has to be your personal CAP rate and not the market CAP rate.

6. Negotiate and Structure Your Contract

The results of the deal will mostly be determined by how well you negotiate and structure your contract. So it is important that you pay close attention and be very critical of how you handle this process.

Within the negotiations, always ask for seller financing. Ask if the seller will be willing to pay all or a portion of the closing costs. This may not always be the case, but it would never hurt to ask.

Compare the market value of the property, and try to reduce the offered price of the property for the needed maintenance. Make sure to estimate construction costs, holding costs (mortgage, insurance, utilities, etc.), and estimate the time needed to cover them all. Estimate the other finances that have to be considered, such as the required profit for a great deal, the income to be generated to determine the profitability of the deal, and the closing costs.

Always confirm 1031 funds if there are any, prior to making your offer and prior to closing escrow. Make sure there are no prepay penalties, and negotiate a lower sales price if you find that the property has defects and requires maintenance. Confirm that there are no hidden leases existing and base your estimated income based on actual copies of the leases. It is clearly evident that you have to obtain all the documents and contracts on the property to make your decisions and for the negotiations to go smoothly.

Make a clear inventory of the property. Makes sure specific equipment are privately owned by the seller, and require an inventory list of the things that go with the property. Research and ask for the building plans, engineering, bids, and estimates that have been completed or are in the process of completion.

These are mostly some critical points that you shouldn’t forget when going through a negotiation. Remember that negotiating is just equal to producing your profit!

7. Buy it Right!

When buying and investing in a property, there are precautions and check-ups to be made with the property. First of all, you have to procure landlord insurance for your protection before doing anything with the property. Obtain bids on all the necessary components of rehab and check on the lights, plumbing, and other utilities. Make a proper budget plan for the rehab, and immediately put your rehab team to work. Time also costs money, so it is important that you optimize every second of it.

Develop contract with the default language, with specific penalty clauses, and clearly define your terms and conditions regarding payment and costs. Don’t forget to obtain copies of insurance and licenses, too!

In your rehab and improvement project, it is normally wise to start with the exterior of the property. Remember that every second counts, so you might want to start advertising the place after you’ve renovated the outside. You can work on the inside even if the advertisements are still going since it’ll be the outside that will first be shown to the public.

In offering your price for the property, remember not to offer too much too soon. You should proceed with this negotiation as conservatively as possible. Remember that you have to buy it right!

Here is a list of websites where you can get contractors for your team:

www.angieslist.com

www.everycontractor.com

www.renovationexperts.com

www.nahb.com

8. Get property appraisal

The appraisal of the property can be either done by you or a recommended contact of your lender. Always ask first if your lender has a list of appraisers. This will also help in fostering your relationship with your lenders and in building a healthy network in real estate investing.

If you’re going to choose the appraiser yourself, ask and confirm if they have any errors and omissions insurance. Most lenders do not actually accept appraisal without errors and omissions insurance so be particular about this one.

Here are some websites that you can look up for property appraisal:

www.zillow.com

www.firstamres.com

www.housevalues.com

www.cyberhomes.com

www.realestateabc.com

www.naifa.com

www.appraisalinstitute.org

www.ana-appraisers.org

www.appraiserdatabase.com

9. Refinance for Tax Free Proceeds

The financials continue to be first priority, from the start to the finish of the deal. Refinance for tax free proceeds and go over your income and profit. Remember that proceeds from loans are not taxed.

10. Retain property or do a 1031 Exchange

You have either the option to retain the property and get residual income and monthly cash flow or you can sell the property and do a 1031 exchange to protect your equity.

Throughout the process of investing in a real estate property, remember to be critical. At first glance, consider looking at purchase price, the amount of money needed to fix it up, the rent, the existing market pressures, and the uniqueness of the property and the benefits it can give. Do not forget to base your purchase price based on today’s value.

To be a real estate investor and talk to people who’s about to sell their properties is to be confident in your words and actions. Let’s face it. No one would be interested in you if you talk like a boring salesman. No one would believe you if you seem so scripted and robotic. No one will listen to you if you feel small and unprepared.

This is why before getting there on that front door and ringing that doorbell, you have to be a master of your words and actions. Because if the first thing a person sees when he or she opens the door is a fumbling, slow, and soft spoken man or woman, they’ll be dubious when you state that you’re willing to help them with their property. Who would? Would you believe that a very unsure guy could possibly help you solve your problem with your property?

In approaching a possible client and taking hold of a deal, you must say the right words, say them right, and show them that you’re sure in everything you do and say! Communication is one of the main factors that will either give or deny you a great deal.

The Handshake

Let’s start with the first contact with the homeowner. Naturally, you shake hands as a sign of the start of a business relationship.

While it may only be a form of contact to some, it should be more than that. This is the first sign of contact, and you are conveying your confidence along with it.

Your handshake should be firm and sure! A firm handshake gives the homeowner the feeling that you’re ready and confident in helping him or her. A limp and loose handshake, however, shows that you’re not that enthusiastic about your job, that you are not confident. It also somehow shows that you’re not the type who’s in control of a situation.

Words, Body Language, and Tonality

Words, body language, and the tone will set off what can be a fruitful conversation… if you say and do things right, of course.

Being polite and respectful will give the homeowners the impression that you’re there to help them out. It would be offending to most people if you would just barge in and demand that they do business with you.

Words aren’t the only determining factors. People would say, “Actions speak louder than words.” Simply put, nobody would believe you when you say you’re sad when you’re laughing or when you say that you’re happy when you look downtrodden.

The tone of your voice also conveys to the homeowner if you have the confidence and if you’re in control. If you know what you’re about, then your way of speaking would be easy-going and smooth. If you’re unsure of what to say, the homeowner will get a hint of it by the way your tone is slightly rising or softening.

Combining these three elements will make up a confident air and composure in you. Employing only one or two of the three won’t really cut it. You need all three to make a good impression and make the homeowner remember you. After all, it’s not really what you say that they’ll remember. They’ll only remember how you made them feel. And if you carry on with your business with that determined and confident atmosphere, you will surely be remembered to be one who can be called on for the job!

Downswings VS Upswings

You might have noticed that some people, when asking a question, swings their tone upwards while others state it like a sentence or a request? What did you think of the two different approaches?

Consider this sentence and try to say it both downswing and upswing:

I can tell you the options you can take. Would you like to hear it?

Try to say it upswing. Listen and fathom how it would seem to you if you were the one it was addressed to. How did the speaker seem to you? It would seem that the speaker is unsure of how to proceed, right? The speaker placed handed control over to the one he or she was addressing. The upswing tone made it seem like the speaker was weak and was not sure of how to handle the situation.

Now try to say it downswing, like a simple request. Doesn’t it sound more confident to you when it was stated downswing? It made your statement sound firm and serious. It made you sound like you’re in control of the conversation even when you’re asking if the homeowner would like to hear it or not. Hearing this kind of tone, the answer would most likely be a “yes.”

Tag Phrases

There is a tool in the English language that you can use to reinforce and bring in the homeowners to a conversation that you control. These are tag phrases. Some example of tag phrases are as follows:

… don’t you?

… haven’t you?

… that’s what you want, isn’t it?

… won’t that be great?

As you can see, tag phrases are mostly masked as questions, but are phrases that are used to offer gentle reassurances to the listener. These tag phrases are used by many highly trained people that focus on bringing in the attention of the listener into the conversation. It also serves as a reinforcement to your offers and you will be able to be more assertive, confident, and in control.

Keep It Natural

Polishing your communication skills isn’t only about making a script, memorizing it, and practicing in front of the mirror. There is one thing more that’s important, and that is to keep things natural and easy-flowing.

Don’t try to sound so scripted. You could try practicing a few lines but you don’t have to sound like it when you’re in front of the homeowner. The more scripted you sound the more the homeowner will think that you’re not sincere about helping them. The results may not be good.

Being natural and friendlier, however, can help to make the results favorable to you. Making your first conversations with the homeowner simple, easy, and natural can lead to a fruitful conversation. The homeowner will be more willing to open up and be attentive to you when you sound more conversational.

In the real estate business, everyone goes for the best price for the deal. It is with this thought that people would first consider every option that is being offered to them before settling on the winner. It is with this thought that real estate investors try to outwit one another so that they’ll be able to get the deal.

The general picture of this heavy competitive market is that investors try to outrun one another using price as the main factor. If one offers a price, the competing investor tries to offer a better one.

But it doesn’t always have to be about the price. There are people who would go for deals that have more benefits than just a good price. And, believe it or not, using this approach may be your ticket to the top!

You’ll notice that in general people do what their colleagues would do and think that working harder than the others would make you successful. That isn’t always the case. That is especially not the case when you’re in a competitive market wherein majority of you are seriously fighting to succeed over the rest.

In a market that’s full or hardworking businesspeople, it’s not enough to just work hard. You also have to work smart!

There are a few in the real estate business that have discovered a way to compete with each other without worrying about what most would worry about — the price to offer. Most investors worry about how much to offer to get a deal. Clearly, this isn’t smart way to get deals.

There may have been instances wherein an offer that is much higher than yours was chosen? Have you thought of why that happened, when your price was better?

It’s because price isn’t everything when you’re making a deal.

One thing you have to consider when trying to get a deal is what the seller wants and needs. Practicality would inspire you to think that they need the money. They do, yes. But that isn’t the only thing that they would want when you consider their emotional and psychological needs.

A person about to move out of his property would still be trying to adapt to the idea that he’ll lose his property and move into a new one. This uneasiness and the transition period to changes can be used as your weapons in getting a deal from them.

Instead of focusing on price, you focus on the seller’s needs. This is because most often than not, it’s these needs that will be prioritized more than the money.

So how do you use these needs to your advantage? Cater to it. Offer selective services that will be greatly appreciated by the sellers that they won’t care if your price for the property isn’t very attractive for them.

Here are some ideas and services that you can use for this strategy:

• Offer them a place to stay in for some time to help get used to the prospect of moving to a new place
• Offer to do the packing and moving of their stuff to their new place
• Hold back a portion of their profit which you will only give them when they have moved out of their sold property

These are just some of the services that you can offer to help the sellers accept your offer and do business with you.

In the business world, we call this a unique selling proposition. This is a well-known tactic used by many businesspeople to stand out from a very competitive market. Real estate business is no exception in having a very heavy competitive atmosphere and one way to stand out and get to the top is to offer something different and unique. Talk about working smart!