If you have very little cash and a slim-to-none chance of borrowing money, you want a landlord-seller who is motivated to receive his or her same regular income from his or her property but is fed up with dealing with tenant headaches. Meet his or her needs by buying the property with seller financing, and you have a deal. If you are meeting someone's needs, even if it works out tremendously to your advantage, never apologize or feel reluctant to do the deal.
Other seller motivations might include a willingness to sell at a reasonable price, but only if the seller can obtain another investment. Some have unreasonably high prices because of what they need to make in order to pay other bills, not what the property is actually worth. Talk to them, help them solve their other problems in a more creative way, and you can make a deal. Many, many sellers want a buyer who will love their property and take care of it. These are very emotional decisions. The more you can communicate your plans and enlist their buy-in, the more successful you will be.
Sometimes, negotiations depend on creating an emotional response in the other person. Emotional responses play an important role in negotiations, which is why you are wise to worry about insulting sellers. You might say, "I really love your property, but in order to make the numbers work on this investment, your asking price will make the deal impossible. It's nothing about you or your property, but this offer is the most I can justify under the circumstances." This approach avoids insulting the seller and enlists his or her aid in making your numbers work. Perhaps the seller knows something that might make your financial analysis different. Perhaps not. Either way, you have taken the emotion out of the situation.
You have seen lawyers negotiating a settlement on television. They face each other across a conference table. One of them grabs a piece of paper and scribbles a dollar amount on it. He or she folds the paper and slides it carefully across the table. The other one sneaks a peak at the number, and then scribbles another one and slides the paper back. This goes on for several minutes until they agree. High drama, but it illustrates a point. Put the deal points in writing. After that slip of paper finishes its journey back and forth across the conference table, some other lawyers in the firm will spend the next three days drafting the ninety-two-page settlement agreement. Most of it will be boilerplate. The deal almost never falls apart in haggling over the boilerplate, once the parties agree on the deal points.
The mechanism for this is the letter of intent. At the top, it should say, "This is not a contract. This illustrates the current stage of negotiations only." That way, you do not find yourself accidentally locked into a contract because of some legal technicality you did not know about. Write the date and the time at the top, also, in case you have several versions floating around. Never destroy earlier versions. They are good proof regarding what the parties discussed, agreed upon, and rejected. That might become important later. You never know.
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