Strategies for Successful Off-Market Deals with Mulisa Ndlovu of Mosros Property

[00:00:00] As investors and developers, we see the world differently. This podcast uncovers the untold truths of what it really takes to become a multi-million dollar residential developer. I'm Nathan Battishall, let's get to work.

[00:00:18] Well, welcome to another episode of the Residential Developer Podcast. I'm the host of the show. My name is Nathan Battishall and we've got one of our favourite guests back again, Melissa from Mosros Property. Good to have you back, buddy.

[00:00:31] Great to be here, mate.

[00:00:33] It feels like we were only here yesterday. It's time flies, hey, when you're getting stuck into doing what you love.

[00:00:39] Exactly. Get accustomed to it, mate.

[00:00:41] Yeah, that's it. It's obviously since we'll talk about a couple of deals maybe later on in this episode, but I thought today it'd be really good just to pick your brains and really talk about negotiation tactics, site negotiation tactics, because I think just with the way we've talked a lot about,

[00:01:01] it's tricky to get sites to stack up on market. So I think people have had to become really good at negotiation and I've seen it where people might know a neighbour or know someone who's a vendor that is interested in maybe selling their site and all of a sudden a residential investor or developer might want to do some negotiation or they want to engage someone in negotiation.

[00:01:22] But I think it's important for people to understand that there is an art to site negotiation and there are tactics involved.

[00:01:31] And yeah, I guess just first and foremost, what made you sort of fall in love with the art of negotiation and dealing with personalities and different people?

[00:01:44] What do you like about negotiation and the art of it?

[00:01:46] I think the main thing I like about it is that I'm good at it.

[00:01:51] Yeah.

[00:01:51] So if I wasn't good at it, I wouldn't like it, but I like it because I'm good at it and there's a lot of things involved into it.

[00:02:01] It's not one particular thing.

[00:02:04] There's so many variables of human beings you can deal with and you cannot negotiate with everyone the same way.

[00:02:12] So there's always different outcomes.

[00:02:15] So it's one of those things that you never know how you're going to work the situation, but you'd have to be equiped with the tools to deal with the situation there and there.

[00:02:30] So you have to think quick on your feet.

[00:02:33] Yeah.

[00:02:33] Yeah.

[00:02:34] And I thought what we might do is just bounce around between some different elements of negotiation tactics.

[00:02:40] But like, are you, what made you good at being a good negotiator?

[00:02:45] Is there anything in your upbringing or anything that in your personality or your wiring or anything in your previous sort of career or life?

[00:02:53] What actually, what do you think are some skills that made you naturally good at negotiation?

[00:02:59] Obviously, it's an art.

[00:03:00] You've got to continue to, like a skill, you've got to continue to get better at it and hone on it.

[00:03:05] But some people do naturally have natural skills.

[00:03:08] Is there anything you did in your life that brought that about?

[00:03:12] Well, let's see what I can think of.

[00:03:13] When I was much younger, my father was a priest.

[00:03:17] He was a preacher, right?

[00:03:19] And we had to go to church every Sunday without a fail.

[00:03:23] Yeah.

[00:03:24] But we didn't want to go.

[00:03:25] Yeah.

[00:03:26] Because we were kids.

[00:03:26] We wanted to play.

[00:03:27] Yeah.

[00:03:27] So I guess negotiation starts from there, really, at an early age, you know?

[00:03:33] And sometimes you win the negotiation and sometimes you don't.

[00:03:40] So where we come from, we never really had much.

[00:03:44] Our parents only had enough just to raise us, you know?

[00:03:49] But we wanted more.

[00:03:51] So you kind of also had to negotiate to get more.

[00:03:56] And you sort of knew when and what to negotiate for.

[00:04:02] So you had to know the right timing, the right way to speak about it, the right tone to use.

[00:04:08] Yeah.

[00:04:08] And so on and so on.

[00:04:10] So I think you start learning these things at an early age.

[00:04:15] Some people just don't take hype into it.

[00:04:18] But I think it's went from there on.

[00:04:21] And the older you get, where I come from, shops don't really have pricing in Zimbabwe.

[00:04:27] There wasn't pricings on the shopping rack.

[00:04:30] Yeah.

[00:04:31] You kind of used to just grab your bread.

[00:04:33] You go to the front.

[00:04:35] They'll tell you a particular price.

[00:04:37] And then you go, nah.

[00:04:38] Negotiate.

[00:04:38] How about we drop 10 cents?

[00:04:41] So I guess my whole life has been negotiated.

[00:04:45] And it's been something that I'm sort of used, sort of second nature.

[00:04:50] I'm sort of used to it.

[00:04:51] Yeah.

[00:04:52] Yeah.

[00:04:52] Yeah.

[00:04:53] That's really good.

[00:04:54] And look, I guess, I think it's a good place to start to really look at the vendor.

[00:05:01] Because I think a lot of people focus too much on just what they want.

[00:05:04] But I think, do you want to just speak a little bit into understanding the vendor's perspective

[00:05:08] and I think, you know, it's really important, I'd imagine, to really understand their needs.

[00:05:13] What are their needs and what are their motivations?

[00:05:16] Is that something you try and discover early on?

[00:05:19] Do you want to speak a little bit into that?

[00:05:20] Like how do you discover their needs, their motivations?

[00:05:24] What motivates them to sell or to not want to sell?

[00:05:27] What are you doing in that space?

[00:05:30] So if you don't know what the vendor wants and when they want it and how they want it,

[00:05:37] there is no negotiations really there.

[00:05:41] So your first thing is to find out the vendor's needs and when they need them

[00:05:47] and how likely they want this done.

[00:05:51] And your job is to see if you can facilitate that and still be able to get what you want from their side.

[00:05:59] So if you can give them that, they'll obviously give you what you're looking for.

[00:06:04] But that's the very first thing.

[00:06:07] You have to know what the vendor's needs are because they have to be met at the end of the negotiation.

[00:06:14] Yeah.

[00:06:15] Yeah.

[00:06:16] And I guess a lot of their needs can then determine if it's a red light, a green light or a white light,

[00:06:23] an orange light to wait.

[00:06:24] Yes, yes, yes, yes.

[00:06:27] Like hypothetically, I'll speak about another property we're going to deal with.

[00:06:31] So there was one where the vendor, beautiful property, we need this property.

[00:06:36] It's an exclusive area.

[00:06:38] The vendor is a bit older.

[00:06:40] She's very old and she doesn't want a place where she wants to move into a smaller place but with no stairs.

[00:06:48] Doesn't like stairs.

[00:06:50] She wants this to be two bedrooms but still close to the same area.

[00:06:54] So we knew what she wanted.

[00:06:57] We just have to make sure we can find it.

[00:06:59] So I had to put some fillers out there, see if I can find it and luckily we find one and then now you try to see if you can match the settlements together and so on.

[00:07:11] But if she wanted something even more, something harder to get than that, then you couldn't do it, right?

[00:07:19] Yeah.

[00:07:19] Something where you're going to have to go off market would have been just another job.

[00:07:23] Yeah.

[00:07:23] You replace a job with another job.

[00:07:25] Is there any common indicators you get just from your experience when you can tell someone's quite motivated or keen to sell?

[00:07:34] Is there any common traits or common things that you're listening for or picking up when you can tell someone's quite motivated?

[00:07:43] Yes.

[00:07:44] Yes.

[00:07:44] So usually if they start talking about, so what's next?

[00:07:51] How's the process like?

[00:07:53] If they're the ones, if they start asking questions about what's going to happen, how it's going to happen, at that point it's done.

[00:08:04] It's only a matter of time.

[00:08:06] So one thing with dealing with vendors off market, right?

[00:08:10] So it's a different process to on market.

[00:08:13] On market, everything is already there on paper.

[00:08:16] Terms, pricing, everything.

[00:08:20] Contracts.

[00:08:20] They're just – anyone who buys, they're just ready to sign in vendors, they're ready to sign and so on.

[00:08:25] Off market, these vendors don't even know what they were doing – what they were meant to be doing next year.

[00:08:32] Let alone now they get this letter, they have you negotiating these prices.

[00:08:37] So what they usually do, they will negotiate a price, negotiate settlement terms and so on, and now they will get called.

[00:08:45] In that period of time they're getting called, I believe they're either looking for a new place to stay, looking for new jobs, looking for this, this, this, this and that.

[00:08:56] And then soon after that they come back along and they want to play.

[00:09:00] So that's usually how it works off market.

[00:09:04] But yeah, there's patterns.

[00:09:05] They're pretty much the same.

[00:09:07] You get used to them.

[00:09:09] I believe some days I have the same conversation over and over and over and over.

[00:09:14] Yeah.

[00:09:14] Yeah, with different people.

[00:09:16] Yeah.

[00:09:16] Yeah.

[00:09:17] And look, this day and age, trust is a huge thing I think in any industry.

[00:09:22] But I think more so in this one is you've got to build rapport, you've got to build trust and you've got to build it quickly I'm guessing.

[00:09:28] Are you, what are some of your tactics?

[00:09:30] What are some of the, what are the, what are some of the ways you've found to be able to build rapport and trust quickly with vendors?

[00:09:37] Because essentially you've only got a window of time and obviously various different people are sceptical about different elements.

[00:09:45] They're sceptical about, you know, the strategy and essentially bypassing more traditional methods of real estate agents and various different things.

[00:09:58] How do you build that rapport and trust quickly?

[00:10:01] So it depends on which type of vendor you're dealing with, you know.

[00:10:05] I usually make them laugh.

[00:10:07] So I usually have good conversations with them and they're just straight to the point, letting them know why we're contacting them, right?

[00:10:17] So they understand that these properties we're looking for do not come on the market.

[00:10:24] They don't.

[00:10:25] Otherwise, if we went on the market to buy development properties, we'd maybe get one or two a year if that.

[00:10:31] Yeah.

[00:10:32] Right.

[00:10:32] So they don't come on the market.

[00:10:33] We have to be out here exclusively coming for the property to get it.

[00:10:39] Yeah.

[00:10:40] That's, hence why we're calling and so on.

[00:10:42] So we let them know that and we'll just jerk around with them.

[00:10:45] We keep it light.

[00:10:45] We let them know we're not in a hurry.

[00:10:47] They can take their time and so on.

[00:10:49] Keep them comfortable.

[00:10:51] Yeah.

[00:10:51] And yeah, that's just, that's the first line of contact.

[00:10:54] But we have to contact them more, but not too often.

[00:10:59] And depending on which kind of vendor it is, some vendors, you know you only have two conversations with them.

[00:11:07] Yeah.

[00:11:08] Some you only have one.

[00:11:09] Yeah.

[00:11:10] And they'll block your number.

[00:11:11] Yeah.

[00:11:11] Some you have two.

[00:11:13] Some you can talk for months.

[00:11:15] So they're a little bit different.

[00:11:17] You kind of just have to gauge them as you go.

[00:11:21] So, but main thing is keep them comfortable and just run them through the process and make sure that they can understand you as well.

[00:11:33] Yeah.

[00:11:34] Oh, it's good.

[00:11:34] And obviously another big one obviously is pricing because price really can dictate whether the project's feasible or not.

[00:11:42] And not everyone's got that ability to easily talk about pricing.

[00:11:49] But what are some, how do you broach that conversation of pricing with the vendor?

[00:11:54] How do you, what are some skills that you've found are beneficial for getting down to the nitty gritty where getting an idea of what they want to, what they're willing to sell the site for or what they'd be willing part for?

[00:12:09] Or how do you find that comes about those conversations around price?

[00:12:13] Do you find it's an easy conversation to have?

[00:12:15] Is it a difficult one?

[00:12:18] Well, for me, all of it's an easy conversation to be had, right?

[00:12:24] But the pricing thing one, at the same time, all of these vendors are different.

[00:12:30] Some people, you have to be as close as to the price you actually want to purchase it at because you're only going to get one time to give them an offer, right?

[00:12:41] Some of them, you understand that they're not so money motivated.

[00:12:46] So you want to make sure the price is just close enough for them.

[00:12:51] But most of the value they're going to get is that they're going to have all the pressure of this purchase taken off them and then on to us.

[00:13:00] So we'll give them a long settlement, help them find a new place.

[00:13:05] They won't pay any legal fees, no agent fees, so on and on and on.

[00:13:12] So they don't have strangers walking through their doors.

[00:13:15] And some of these houses need fixing and so on.

[00:13:18] So it really is just much easier for them to sell through us.

[00:13:23] But with that said, just last week, we've done the same with a good property in Huskison, right?

[00:13:30] So we organized a good pricing, very, very good pricing with a vendor.

[00:13:37] And she goes back for a week and she comes back and I'm getting called by an agent now.

[00:13:46] She's went and put the property to an agent.

[00:13:49] She said, can you talk to my agent?

[00:13:51] This property was off market, mind you.

[00:13:53] She wasn't selling it.

[00:13:54] Now she said, this agent's going to negotiate for me.

[00:13:58] And then the agent got the same price that she was going to get.

[00:14:04] Yeah.

[00:14:05] And now she's commissioned now.

[00:14:06] Mine is commissioned now.

[00:14:08] I couldn't believe it.

[00:14:09] In my mind, I'm thinking, why did she do that?

[00:14:14] Yeah.

[00:14:14] But I guess some people, they see this process, it's new to them, they're a little bit older.

[00:14:21] They just don't know how to take it.

[00:14:24] Yeah.

[00:14:24] Yeah.

[00:14:25] So I guess you've got to be agile, don't you?

[00:14:27] You've got to be willing to adapt.

[00:14:29] And like you said, really discovering the needs, really understanding the motivations and the

[00:14:34] needs of that vendor.

[00:14:35] Yes.

[00:14:36] I guess really determine how you present that price, I'm guessing.

[00:14:40] Mm-hmm.

[00:14:40] Mm-hmm.

[00:14:42] Sometimes you might want them, if they're really that tough, you can tell they're going

[00:14:48] to be a headache, they're best off bringing the price to you.

[00:14:52] Yeah.

[00:14:52] But most of them would not.

[00:14:54] If you ask the vendor, how much do you want for a property?

[00:14:57] They'll say, nah, mate, you called me, give me your offer.

[00:15:00] Yeah.

[00:15:01] So yeah, it's, you never know who you're going to deal with.

[00:15:06] Yeah.

[00:15:06] Yeah.

[00:15:07] You never know.

[00:15:07] But the main thing is, when you take these leads on, at that point, they're just early

[00:15:13] leads.

[00:15:14] Then you need to kind of mature them, which takes a little bit of time.

[00:15:17] Yeah.

[00:15:18] I guess maturing the lead is them getting to know you better and getting to trust into you.

[00:15:23] And soon enough, they'll sell through to you.

[00:15:26] That's great.

[00:15:26] Yeah.

[00:15:27] I guess another huge key thing is negotiating terms.

[00:15:31] And again, probably a lot of it does come down to understanding the needs and the motivations

[00:15:36] of the vendor.

[00:15:38] But obviously, you've got needs.

[00:15:40] You've got the needs of your client as well.

[00:15:43] The investor, the developer who's wanting to do a project.

[00:15:47] How are you balancing that?

[00:15:49] How are you juggling that, I guess, that negotiation beyond price when it comes to the terms, the

[00:15:58] terms of the deal?

[00:16:00] Well, what I do, I just put my mindset in the client's mindset.

[00:16:06] And I just negotiate it from there.

[00:16:08] So I negotiate as if the terms the client wants are mine.

[00:16:14] Yeah.

[00:16:15] And I just negotiate it from there.

[00:16:17] Yeah.

[00:16:18] Yeah.

[00:16:18] But terms are usually most of the easiest.

[00:16:21] Yeah.

[00:16:23] It's funny, isn't it?

[00:16:24] You know, we talk a lot about red brain, green brain, obviously red brain.

[00:16:28] The red part of your brain is all compliance and all the things that tell your brain to

[00:16:33] stop, whereas the green brain is obviously the emotional side of your brain that means

[00:16:36] go.

[00:16:37] Yes.

[00:16:37] Essentially, you're trying to get them into that emotional state, I'm guessing, are you,

[00:16:42] where they start to imagine what they can do once they sell this property.

[00:16:45] Like you said, what's next?

[00:16:48] Yes.

[00:16:48] Once they start talking about what's next, like the lady needs to get the two-bedroom house,

[00:16:53] you know, she's motivated.

[00:16:55] Yes.

[00:16:55] But she needs to get that next.

[00:16:57] Yes.

[00:16:58] Yes, yes.

[00:16:58] Do you find that's a big thing?

[00:17:00] That is a big thing.

[00:17:01] Like getting them into that place where they are beginning to actually imagine, this is

[00:17:07] what I can do with the finance, with the sale, especially if it's a run-down property, it's

[00:17:12] falling apart, all of a sudden they imagine they can downsize, especially if they're older,

[00:17:17] brand new property, you know.

[00:17:19] Do you find that sometimes?

[00:17:20] Yeah.

[00:17:20] Yeah.

[00:17:21] They start to actually tell you about what's next in their journey?

[00:17:26] So this is what I usually do.

[00:17:28] Once we start talking pricing, right, I always ask, and this is not for negotiation, this

[00:17:36] is just out of curiosity, right?

[00:17:38] But I always ask, hypothetically, you're to say yes, you do this deal, you get the money.

[00:17:45] What are you doing?

[00:17:46] Where are you going to move to?

[00:17:49] What are you going to do?

[00:17:51] You've got three million in your hands, what are you going to do now?

[00:17:54] Yeah.

[00:17:54] So I always ask them that and you always get different stories, different stories.

[00:17:59] Oh, this for my kids, I've got to buy this, then I'll probably save this.

[00:18:05] In that point, they're just literally planning in their heads without even knowing.

[00:18:10] Well, they're putting a vision forward, aren't they?

[00:18:12] Yeah.

[00:18:13] And you're getting into that green brain.

[00:18:14] Yeah.

[00:18:15] They literally have a notepad to just write down what they're going to do with it.

[00:18:19] Yeah.

[00:18:20] Yeah, and then soon enough they'll call you to collect.

[00:18:24] That's great.

[00:18:25] And look, what about, obviously objections come up and that's part of any negotiation in life

[00:18:33] and everyone views objections differently.

[00:18:35] How do you overcome objections?

[00:18:39] Firstly, what are some of the common objections you hear from vendors during your negotiation

[00:18:45] and how do you address some of those objections?

[00:18:48] Really?

[00:18:49] What are some common ones?

[00:18:50] What's an objection?

[00:18:51] What would they say?

[00:18:52] The price is too low.

[00:18:54] We're not ready to sell.

[00:18:59] Yeah, we're just not ready to sell.

[00:19:02] That's the main one, right?

[00:19:04] So.

[00:19:05] What are some, maybe this is another way to craft it.

[00:19:08] What are some objections that you know most of the time basically mean that you've got to park that deal?

[00:19:17] Yeah.

[00:19:17] And then what are some objections that you know you can, there's an in for you to be able to help them overcome those objections.

[00:19:28] So what are some, what are a couple of objections you know most of the time when they bring up that objection that it's basically,

[00:19:35] this deal's probably either not happening or it's quite a while away?

[00:19:40] If they tell you that they're not doing nothing with this for a year or two and I always have to keep going, right?

[00:19:49] If they come back with the price of like a million dollar property, so they say the only reason, the only way we're doing it is five million dollars for the property, then they really mean it.

[00:19:59] So those type of people, yeah, you just park them to the side, but they're still there.

[00:20:04] Yeah.

[00:20:05] You know, and the rest, when people say they're just not ready yet, you find out where, well, why aren't you ready?

[00:20:13] And most people don't want to tell you why they're not ready.

[00:20:15] Yeah.

[00:20:16] Oh, I just want to do this.

[00:20:19] There's always some type of excuse, right?

[00:20:21] But the best thing to do is just to give them space because they have to make sure they know that you can leave.

[00:20:29] Yeah.

[00:20:30] If they think we're always going to be there regardless, they can then go talk to anyone else, knowing that they can just come back and take this offer that was there.

[00:20:41] Yeah.

[00:20:41] So if that's the case, we let them know, well, we're in our buying period now.

[00:20:45] So, yeah, if we can't purchase it by then, we can maybe see what we can do with it later on.

[00:20:52] Yeah.

[00:20:52] And, yeah, the best thing is just to leave them.

[00:20:55] Yeah.

[00:20:56] They'll call.

[00:20:57] So put a bit of urgency back on them.

[00:20:59] Yeah, and just leave it.

[00:21:00] Yeah.

[00:21:01] Yeah.

[00:21:01] And it's funny, isn't it?

[00:21:02] Like a no today doesn't necessarily mean a no next week.

[00:21:06] Exactly.

[00:21:06] Because people's circumstances can change in a day or a week or a month or two months or three months.

[00:21:14] Have you found that where someone was a flood out no today but all of a sudden a life circumstance changes even in the course of a couple of weeks or a month?

[00:21:24] Yes.

[00:21:24] And all of a sudden they were not motivated and now they're motivated.

[00:21:27] Have you found that?

[00:21:28] Like the Austin Mere property.

[00:21:29] Yeah.

[00:21:30] Yeah.

[00:21:31] Like the Austin Mere property, same thing.

[00:21:33] Five weeks ago it was no, there's too much attachment.

[00:21:37] Now they're ready to go.

[00:21:39] Yeah.

[00:21:39] So the timing is always the issue.

[00:21:46] So it's not the money, the pricing, it's always timing.

[00:21:51] Yeah.

[00:21:52] Timing, timing, timing.

[00:21:53] But timing, when you're dealing on market, timing is already there so you don't need to worry about it.

[00:22:01] Off market, timing is what's going to really declare when you're going to purchase the property.

[00:22:09] Yeah.

[00:22:10] Yeah.

[00:22:10] Whenever the vendor's ready and they're comfortable and they have all their ducks in the row.

[00:22:15] Yep.

[00:22:16] And I guess it's funny, like you probably more come from the side of the fence where I'm talking about balancing the vendor's needs versus the developer or investor's needs.

[00:22:28] Obviously every different consultant comes from a different angle, like an agent generally is coming from the needs more so of the vendor.

[00:22:35] You're probably more coming from the needs of the developer or the investor that you're consulting to.

[00:22:41] How do you balance the needs between what the developer wants and the investor wants and what the vendor wants?

[00:22:48] Because obviously it can be a juggling act and a balancing act.

[00:22:51] Yeah.

[00:22:52] Because obviously you know you've got a good understanding and knowledge of what, as a consultant of what the vendor, oh sorry, what the developer is looking to achieve.

[00:23:02] But it's a balancing act, isn't it?

[00:23:04] Because at the end of the day you've still got to pull the deal off.

[00:23:07] How do you balance that between the needs of the two different parties?

[00:23:13] The main thing, listen, I stand by these words, right?

[00:23:18] You can never be in a deal where not all parties involved benefit.

[00:23:23] So your job is to make sure that all parties involved benefit.

[00:23:30] Yeah.

[00:23:30] Because if one gets one on the other, yeah, that's momentarily, but all things come to light.

[00:23:38] Within six months there's going to be problems.

[00:23:41] This person won't want to play along.

[00:23:44] It causes headaches.

[00:23:46] Yeah.

[00:23:46] So you want to, the vendors are just as protected as well.

[00:23:52] Yeah.

[00:23:53] Because you don't want to hurt anyone in this process.

[00:23:58] No.

[00:23:59] Because this is a small world and this is all just for money and money is a momentary thing.

[00:24:05] Exactly.

[00:24:05] You know, so.

[00:24:06] That's it.

[00:24:06] And I always say in the property game, like it's a big world but it's a small world.

[00:24:11] Very small world.

[00:24:11] I'm amazed that everyone knows everyone.

[00:24:13] Very small.

[00:24:14] And I agree.

[00:24:14] I think when you've got a life, not just a business philosophy but a life philosophy that you want to see everyone win.

[00:24:23] Yes.

[00:24:23] Or I've got a good friend that says I want to see that all the boats rise.

[00:24:27] When the tide rises that all the boats rise.

[00:24:29] Yes.

[00:24:30] I just think that's a great life philosophy that you want to see everybody win.

[00:24:38] Because you might be able to speak into this but nothing frustrates me more than when you want to see a developer.

[00:24:44] An investor wanting to try and get a property.

[00:24:47] They're asking for an absolutely offensive price for a property that is so, so, so far below the market value that you just, you kill the deal from the start when you make such an offensive.

[00:25:01] Yes.

[00:25:02] Have you seen that?

[00:25:03] Have you seen that where you've had a developer where you've had to basically not work with them because purely they were so ruthless that they wanted to offer prices that were just not possible that you would literally, it would be unethical to actually go down that path.

[00:25:20] Have you seen that?

[00:25:21] Yes.

[00:25:22] Yes.

[00:25:22] Yes.

[00:25:22] I've seen that.

[00:25:23] And it happens, right?

[00:25:24] And this is what I keep saying.

[00:25:26] So for as a client, right, it's easy.

[00:25:31] You should say, I'll just offer this, right?

[00:25:34] Because you're on the other side of it.

[00:25:35] You're not the one talking, right?

[00:25:37] I'll just offer this.

[00:25:38] Yeah, yeah.

[00:25:38] I know it's law, but just offer that.

[00:25:42] But we can't be known by the people going around offering $1 million for $2 million properties, you know?

[00:25:51] It's unethical.

[00:25:52] It's unethical and it gives us a bad name, right?

[00:25:56] And ethanol, you are not going to get that property for that price anyway.

[00:26:00] So that's not how it's done.

[00:26:03] Things have to be fair.

[00:26:05] Yeah, there's setting a bar in negotiating, right?

[00:26:09] You can set a bar where you want to start negotiating from.

[00:26:16] But, yeah, there's some people who just go way too far with it.

[00:26:20] Yeah.

[00:26:20] You know, way, way too far with it.

[00:26:23] There's people who like a bargain.

[00:26:25] Yeah.

[00:26:25] But one thing with these people who like a bargain, they'll only ever do one project a year if that.

[00:26:30] Yeah, that's it because they're impossible to find.

[00:26:33] They're looking for something that doesn't exist most of the time.

[00:26:35] And the problem is I think a lot of social media and marketing and things haven't helped

[00:26:39] because sadly there are people out there who portray this unrealistic image of life.

[00:26:47] Yes.

[00:26:48] And I think thankfully a lot of people are carrying that mantra now of actually being someone who lifts others up

[00:26:58] rather than treads on everyone to get like stepping, seeing people as stepping stones to get to their destination.

[00:27:04] Yes.

[00:27:05] Rather than saying, well, let's, what's a lonely place if you tread on everyone to get to that destination

[00:27:10] rather than want to see everyone win, whether it be your consultants, whether it be your builder,

[00:27:15] whether it be, you know, the vendor, all that sort of thing.

[00:27:18] And I think the key is really just making sure you're not paying, you're not chewing the development margin out of the site, isn't it?

[00:27:27] Because that's where you make your money is buying a site for what it's worth.

[00:27:33] Yes.

[00:27:33] What it's currently worth at its current value and making sure you've left that margin in the site for when you develop it

[00:27:40] so that you can get the uplift.

[00:27:42] Yes.

[00:27:42] That's the key, isn't it?

[00:27:43] Yes.

[00:27:43] That's exactly what it is.

[00:27:45] I think people see off market, they think, oh, that means I can pay half price.

[00:27:50] No.

[00:27:50] Oh, it's off market only because these properties don't come on the market.

[00:27:55] Yeah.

[00:27:56] They don't.

[00:27:57] Yeah.

[00:27:57] If you can wait for them on the market, you won't get them.

[00:28:00] And if any property that can be developed does come on the market, it's already been looked at and it's there for a reason.

[00:28:07] Is there because it's already priced too high or there's a reason it's there?

[00:28:16] Yeah.

[00:28:16] And also what makes you think you'll get it at that cheap price?

[00:28:20] Yeah.

[00:28:20] You know, it's not going to happen.

[00:28:23] Yeah.

[00:28:24] No, it's right.

[00:28:25] And look, we touched on timing before but I think timing obviously plays a really critical factor in negotiations.

[00:28:34] Is there elements of timing that you can preempt or is there elements of timing that you can almost pick?

[00:28:43] Or is timing one of those things that's very much out of your control as in your game of negotiating, of dealing with people?

[00:28:53] Have you learned to understand timing?

[00:28:57] Like have you learned really listening to people to be able to really get a preempt, the timing of a deal?

[00:29:05] Yeah.

[00:29:06] Timing as in the time of the day or?

[00:29:09] No, more so timing of like pulling the trigger on the deal.

[00:29:15] Yeah.

[00:29:16] Knowing when.

[00:29:17] Yeah.

[00:29:18] Really just knowing when, how to determine the right moments to push a deal.

[00:29:21] And essentially all the right time to give the vendor more time.

[00:29:29] When do you know, okay, we can put the foot down now?

[00:29:34] It's kind of a feeling.

[00:29:37] It's a feeling.

[00:29:38] I think what it is, all these things coming together but it's a feeling.

[00:29:45] As soon as you see the vendor giving in, it's starting to talk more into the future about the property but not into the future where they have it,

[00:29:57] into the future of what, of the deal.

[00:30:01] You know, they're talking about this purchase but the future of it, talking about solicitors,

[00:30:06] talking about settlement times, talking about things that you only talk about when you are going ahead.

[00:30:14] Sort of let's say when you're talking to a vendor, you've been going back and forth of an offer and they end up going,

[00:30:21] can you send this offer in writing to my lawyer?

[00:30:25] Yeah.

[00:30:26] They don't want to say, they don't want to accept but that's them accepting.

[00:30:31] Yeah.

[00:30:31] Yeah.

[00:30:32] You know, so these type of things and they always do the same things.

[00:30:36] Oh, you're just sending in writing.

[00:30:38] There's not one time I've ever been asking something in writing and it wasn't done.

[00:30:43] Yeah.

[00:30:44] Yeah.

[00:30:45] But when you mean timing, actually timing, negotiation, this is my little secret, you know.

[00:30:51] So what I believe with hardcore negotiations, right, I think 11 a.m. is the latest you can negotiate.

[00:31:01] So I reckon it's between that 9 to 11, maybe 11.30 a.m.

[00:31:06] Yeah.

[00:31:06] That's it.

[00:31:07] So if there's a negotiation where all you're looking for is the word yes,

[00:31:15] not something complicated, just the word yes,

[00:31:18] you'll most likely get that yes before 11 a.m.

[00:31:22] Yeah.

[00:31:23] Yeah.

[00:31:23] Yeah.

[00:31:24] What do you think that is?

[00:31:25] Have people slept on it?

[00:31:26] Have they?

[00:31:27] No, I just really, I think it's too easy to say no.

[00:31:33] So when you're tired, you just say no.

[00:31:35] I think they just have more energy to think.

[00:31:37] They can think a little bit clearer.

[00:31:38] Yeah.

[00:31:39] Yeah.

[00:31:39] So saying the word yes when you're tired, it doesn't feel right.

[00:31:44] Yeah.

[00:31:45] So they'll most likely say, nah, let me think about it.

[00:31:47] Oh, mate, I'll think about it.

[00:31:49] That's what they'll say.

[00:31:50] If they're tired, nah, nah, let me think about it.

[00:31:52] If they're energetic to think about it, they can make a decision.

[00:31:55] Yeah.

[00:31:56] Yeah.

[00:31:56] Yeah.

[00:31:56] So I've done it, it works.

[00:31:59] It's good.

[00:32:00] Yeah.

[00:32:01] What about market knowledge, like leveraging your market knowledge?

[00:32:04] Obviously that plays a key role in negotiation because essentially you do have,

[00:32:09] if you've got a good understanding of the market knowledge of that particular area,

[00:32:13] when someone is possibly a little bit outside of the true value of that property,

[00:32:21] do you find really just arming yourself with good, sound market knowledge,

[00:32:26] does that help you in negotiation when it comes to just really being able to put realistic,

[00:32:31] real life comparables and pricing in front of people?

[00:32:36] Or do you think, or does it not play much of a role?

[00:32:39] Oh, it doesn't really play much of a role.

[00:32:43] These people, the more you give them most of the times, the more you confuse them.

[00:32:48] So you want to keep it as simple as possible, right?

[00:32:54] But the thing with what I've learned about market research,

[00:32:58] so there's market research of what you see online when you look at realestate.com.au

[00:33:05] or all homes is that.

[00:33:08] And there's market research when you're calling the agents around the area

[00:33:12] and the actual market research of the few people that actually know the area.

[00:33:20] Yeah.

[00:33:21] So I feel like there's three tiers.

[00:33:23] So you could see, someone could see a property

[00:33:26] and they could think it's worth less,

[00:33:30] but you could look at it and go, ping, that's worth more.

[00:33:34] Yeah.

[00:33:34] You know, same as, remember, 8-9 Evans.

[00:33:38] You've seen that one?

[00:33:39] Mm, there's something there.

[00:33:41] Yeah.

[00:33:41] And headland as well.

[00:33:43] Mm, there's something there.

[00:33:45] But not most people will see it.

[00:33:49] Yeah.

[00:33:49] You know, if headland was sitting on somewhere else, it would be worth less.

[00:33:53] Yeah.

[00:33:53] But those views there, the ocean views, make it very expensive.

[00:34:00] Yeah.

[00:34:00] So I guess you just, you end up with an eye for these type of things.

[00:34:05] Yeah.

[00:34:06] And look, what about, do you want to just tell us a bit of a,

[00:34:09] just for a case study, I guess, or even just a success story?

[00:34:13] What's a deal that you're probably the most proudest for in terms of where it came down to negotiation,

[00:34:18] where you had to possibly overcome some objections?

[00:34:21] You had to really use all the tools in your toolkit and skills and your skill set to pull off an amazing deal,

[00:34:28] whether it be for yourself or for a client.

[00:34:30] Have you got a particular deal that sort of stands out, one that you're most proud of when it comes to,

[00:34:36] you know, you really just had to work hard to pull it off?

[00:34:42] I'll tell you what we just done.

[00:34:46] Eight headland.

[00:34:47] Yeah.

[00:34:48] Yes.

[00:34:49] Oh, this thing was crazy.

[00:34:52] So this property, we were talking with the vendors months ago, right?

[00:34:57] It's a deceased estate.

[00:34:59] So we talked to the vendors months ago and then gave them an offer.

[00:35:05] Offer was all right.

[00:35:06] But then now they wanted to go sell it with the agent for some reason.

[00:35:10] And we sent it up with the agent and now they don't want to sell it.

[00:35:15] They said the daughters too are touched.

[00:35:19] So they let go.

[00:35:21] So stopped looking at it.

[00:35:23] Good property had done some numbers on it, liked it.

[00:35:26] And then from nowhere, someone calls me, the vendors call.

[00:35:32] People were happy to sell you this property at that price.

[00:35:39] I said, no, it has to be less.

[00:35:42] They said, okay, we can sell it to you for less, for about $2 million roughly, right?

[00:35:48] And, okay, agree, six-month settlement agreed.

[00:35:52] But the auction is in like two days.

[00:35:57] Yes, auction is in two days.

[00:35:59] So now I'm calling.

[00:36:02] I've got to find the client who's looking for it already has a property.

[00:36:06] Now I've got another client who's going to be purchasing it, but his budget was low.

[00:36:11] So he has to call another investor to jump on with him.

[00:36:15] And this is all two days.

[00:36:16] We're doing all this type of stuff.

[00:36:17] So we're putting all through this together.

[00:36:20] They're using a deposit bond.

[00:36:22] By the time we finish, it's Friday 5 p.m.

[00:36:27] And the auction is the next day.

[00:36:30] And then I had to call the vendors, beg them, beg them, make some deals with them to move the auction.

[00:36:36] Then luckily they moved the auction just to Wednesday.

[00:36:41] Bang.

[00:36:41] Starts again Monday.

[00:36:42] The whole process starts running forward doing this.

[00:36:46] Now they're starting to change your 10% deposit, changing back and forth.

[00:36:50] But then we got to the end and we signed.

[00:36:52] That was a nightmare.

[00:36:55] That was a nightmare.

[00:36:56] Yeah, yeah.

[00:36:57] But then I can tell you the easiest one at the same time.

[00:37:01] Yeah.

[00:37:02] So you remember how I sent you the other property last week?

[00:37:05] I said, Nathan, could you ever have a look at this property for Barry?

[00:37:09] Yeah.

[00:37:10] In Hustison, right?

[00:37:12] And then looked at it.

[00:37:14] And then I called you about two hours later and I was like, yeah, okay, yeah, he's bought it.

[00:37:19] It's done.

[00:37:19] Yeah.

[00:37:20] He said, what do you mean?

[00:37:21] You only showed it 20 minutes ago.

[00:37:23] What do you mean it's done?

[00:37:24] I said, yeah, he's paid the deposit.

[00:37:26] He's got it.

[00:37:27] Yeah.

[00:37:27] So that was a record.

[00:37:29] So I got the property, showed it to a client.

[00:37:34] The only reason I showed it to him was he just finished exchanging on another property.

[00:37:41] That's why I was talking to him and showed him this one.

[00:37:43] And then he bought that one too straight away.

[00:37:46] So that was about two hours the deposit was paid.

[00:37:50] Yeah.

[00:37:50] Yeah.

[00:37:51] So you get this, they happen.

[00:37:53] Yeah, that's it.

[00:37:54] And it's like anything, isn't it?

[00:37:55] Like you've obviously shared one nightmare or tricky story and then one great story.

[00:38:02] And I'm sure we'd be here for 20 episodes to talk about all the deals that haven't gone through.

[00:38:07] Yes.

[00:38:08] Because of the indoors, not being ready, pulling out at the last moment, you know.

[00:38:14] And the reality is it takes time, doesn't it?

[00:38:18] Yes.

[00:38:19] It's a timing issue.

[00:38:21] And that's why it's important not just to put all your eggs.

[00:38:24] I was only having this conversation with an amazing client of ours who I just encouraged them to.

[00:38:30] There's a site they really love, but it's what we were talking about with timing.

[00:38:36] The timing's just not quite right for the vendor at the moment.

[00:38:39] They were motivated, but then all of a sudden they got a little bit cold.

[00:38:43] Not so much cold, but they just, just complexity came into play.

[00:38:46] Yeah.

[00:38:47] So the timing issue came into play and I just said to them like it's important in property to not put all your eggs in one basket,

[00:38:54] but to really until you literally exchange, you haven't got that deal.

[00:39:00] Yes.

[00:39:01] So emotionally you can't get too invested until it's signed.

[00:39:05] And sealed and delivered.

[00:39:07] Otherwise you set yourself up for disappointment if something falls through.

[00:39:11] Yes.

[00:39:11] Because I guess that's the reality, isn't it?

[00:39:14] You're dealing with all different personalities and people and different needs and wants and motivations.

[00:39:20] Yes.

[00:39:21] And their lives, so many things going on in their lives these days.

[00:39:25] So yeah, you just, this thing, you just never know.

[00:39:29] Anyway, so I've got used to it now.

[00:39:31] At first I wasn't.

[00:39:33] I used to just think, mate, just hurry up.

[00:39:36] Yeah.

[00:39:36] You know, but now I just realise you can't push them.

[00:39:40] The more you push them, the more they push back.

[00:39:43] So you can be there, but just be there in comfort, sort of.

[00:39:49] Yeah.

[00:39:50] Yeah.

[00:39:50] So there's an art to it.

[00:39:52] And you can only know it by doing it and getting used to it and making the mistakes.

[00:39:57] Yeah.

[00:39:57] It's great.

[00:39:58] Yeah.

[00:39:59] Very good.

[00:40:00] Well, I think that's been a great episode.

[00:40:01] And I think obviously there's people out there that want to have people in their circles

[00:40:07] that they know, whether it be through sporting groups or groups or families or neighbours

[00:40:12] or where they want to do a little bit of their own negotiation.

[00:40:16] Obviously, you offer that service to investors and developers who don't have the time or the

[00:40:23] skill to do that negotiation.

[00:40:26] But yeah, thanks for sharing the insights.

[00:40:28] It's always so valuable.

[00:40:31] Obviously, you've already spoken on two of our episodes and I get great feedback on

[00:40:36] the insight, the knowledge that you share.

[00:40:39] And I know you shared with me some great feedback you've been getting from developers

[00:40:43] and investors as well.

[00:40:45] But thanks again for coming on.

[00:40:47] Yeah, your insights are invaluable.

[00:40:50] Have you got one last little parting thought just when it comes to negotiations, maybe for

[00:40:54] a developer investor who does, who is in the process of talking with someone or they

[00:41:00] know about negotiating a side?

[00:41:03] Have you just got maybe just a little snippet of wisdom that you can share?

[00:41:07] Maybe I'd say be happier to walk away than to buy it.

[00:41:12] You'll be all right.

[00:41:13] Yeah, that's great.

[00:41:15] Good insight.

[00:41:16] Well, thanks for coming on, mate.

[00:41:17] Appreciate it.

[00:41:18] Thank you very much.

[00:41:19] Appreciate it.

[00:41:19] Look, thanks again for listening in.

[00:41:22] I hope you've got a whole lot of value out of this session.

[00:41:24] I know I sure have.

[00:41:27] Feel free to share this with friends, family, colleagues.

[00:41:31] Just share it around.

[00:41:32] Don't forget to like and subscribe.

[00:41:34] If you want to get in touch with Melissa when it comes to site acquisition and property consultancy,

[00:41:41] his details will be in the show notes so you can reach out to Melissa.

[00:41:45] Thanks again for listening in and we'll see you next week.

[00:41:49] Masterbug.

[00:41:50] That was good.

[00:41:51] That's good, eh?