They’re so tough. Just listen to the stories they tell about the deals they turned down because they might only earn twenty or thirty thousand dollars from them next month. They describe in colorful detail how they chewed up and spit out a seller for having the audacity to try to peddle that piece of junk. And they cackle about how that poor seller turned into a puddle of quivering jelly.
You’d never want to do business with them, they’d eat you alive.
Are they really that tough? Take a good snoop of their real estate investment portfolio. One of my favorite things to do is to find out about a non-performing, or less than performing property, they own and try to get them to talk about it. Watch the subject get changed.
When you do pin these tough guys down, when you catch them off guard, when they get a couple of drinks in them, you get the story about how they happened to buy that place that doesn’t earn them $20,000 a month, in fact, it barely breaks even. Even so, they still treasure the property.
Mind you, these investors know what it takes to make money in real estate. Yet something prompted them to buy a property that doesn’t measure up to their high standards. That something is emotion.
Everyone always buys on emotion. Usually the tough investors get all emotional about how much money they’re going to bring in. Sometimes other things about a property make them agog, though.
We all know that not every is the super buy that folks are always looking for. You know you don’t want to be the seller of a “super buy”; and properties sell every hour that are simply “good” investments. These properties sell because they bring out some emotion that makes investors have to have it. You can do things to bring out those emotions.
Have you ever had a building jump out at you that you thought you’d like to own. One apartment building always piqued my interest. It was an older building, probably built in the 1910s or 1920s. But there was a look about it that said “solid, with lots of value.” I analyzed why this particular building made me want to own it.
The shrubbery was always neatly trimmed and the grass was always mowed with crisply defined edges. The entire exterior always looked like somebody doted on it. I could just envision all those contented tenants living in that building, eager to pay the rent on time. I could feel the rent checks handed me by smiling tenants. Even though I never went inside, or even looked in a window other than through the glass front door into the showplace lobby, I would have tried to buy the building if it ever came on the market. Imagine that, without knowing the rents, the cap rate or the over-all condition of the place, I would have jumped at the chance to make an offer on the building. I must not qualify as a tough investor, huh?
Other investors are just like I am. Even the tough guys will fall for a meticulously-kept building. It appeals to all real estate investors’ emotions and makes them rationalize dollar signs.
So if you’re going to sell an investment property, make it look doted on. Make somebody think, “I’d get excited about owning that building.” Appeal to buyers’ emotions. Once a buyer is emotionally attracted, you’re halfway to the sale.
An interesting side effect is that emotion works on prospective tenants, too.