What are the two most important words in commercial real estate investing? Some of you may have answered any of the following:
- Cash Flow
- Cap Rate
- Income Property
- Value Add
- Debt & Equity
- Sales Price
- Purchase Price, etc.
If you answered the question with any of these two word combinations, I’d agree with you. These are important words, but the most important words are yes and no.
You do not have the opportunity to move forward with your opportunity without the words yes and no.
Binary (yes/no) answers provide transparency into your deal. You discover what’s possible and what’s not, allowing you to move your process forward. It’s simple, limited in scope, and easy to understand. An owner wants to sell or he doesn’t. You want to buy or you don’t.
“Maybe’s” and “I’ll think about it” are worthless. The deal’s available or it isn’t. Most property owners are card players. Their favorite expressions are designed to delay decision making for as long as possible while they gather more information from you and decide whether they want to do business. These expressions are polite ways for them to say “no”. Give them permission to say “no” when you first meet, telling them there are no hard feelings if the opportunity is not a fit. Not only will you diffuse the situation, but you’ll uncover reasons why the deal may work for both of you.
With yes and no answers, you attain superior market intelligence because you see “what’s really out there.” When you obtain a yes/no outcome for deals you evaluate, you gauge return expectations in the market, price flexibility, term possibilities, and an understanding of the problems owners face as well as whether you can solve them.
You accelerate your investment decision making and avoid wasting time on dead-end opportunities.
It’s guaranteed to produce investment opportunities unique to you. If you’re evaluating and opportunity that has been reviewed by many of your competitors and the answers they obtained were “maybe”, “I’ll think about it”, “Why don’t you come back to me with something”, then no commitments exist for moving the conversation forward. When you obtain a yes/no outcome with the opportunity, you choose to spend more time with the deal or move on, thereby increasing the number of opportunities you evaluate and likelihood for success.
When you have more information than anyone else, you minimize your risk and maximize your return.
Because no is a difficult word to say and when you or your adversary may be uncomfortable, therein lies your opportunity to unlock value.
By the way, where should we send your free 10 part email mini course? It’s 100% commercial real estate investing focused and you can get it here.