I just came across a professional blogger who reminded me how important it is to wear the hat of "poverty mindset" when negotiating the purchase of income property. Okay "poverty mindset" goes completely against the grain of all us Tony Robbins disciples. You know, "you are what you think", "I can do what I believe I can do", etc. All good and important stuff, but not helpful if maintained at the "WRONG" time.
Have you ever noticed that when you've got a few bucks in your wallet, you tend to spend it? And later, you discover you didn't have as much as your remembered having, when you really wanted it? And then couldn't remember where the money went in the first place?
This is exactly what happens when we've got money in the bank and lots of credit when buying income property. We're tempted to spend and use up what we've got without REALLY analyzing whether or not we are actually negotiating the "best" deal for ourselves or not. We get lazy, and give in to prices that are too high. We are tempted to "get along" when we've got cash and credit.
When I first star ted investing I didn't have any cash or credit (I had some of each, but not enough for what I wanted to accomplish). As a result, I was literally forced to get creative and force deals to work that I could actually close on. This meant waiting for the juiciest deals and the most motivated sellers. I necessarily could not put a lot down, or depend on my credit and "overpay" for any real estate. It kept me on the narrow path of wealth. Later, when I had money and credit, I got lazy and would think "average" deals were just peachy. After all it didn't require all that pesky hunting and pecking for the really profitable deals. That was of course unbelievably stupid. This is where "buyer's remorse" was invented, I'm sure.
I am hearing about investors all the time, who over-pay and under-negotiate their real estate deals. Yep. I cringe at their ignorance and impatience. I really cringe that I would do that today, if I didn't know better myself...as I have done in the past.
Frankly, the laziness is short-lived regardless, or at least can only occur in spells, because eventually we run out of credit and/or cash once again. Then what? If we want to continue to invest we have to rediscover how to be creative in our real estate financing. Guess what? That's when we start really making the money again.
What's better, is we can just simply pretend we have neither credit, nor cash, and keep that hat on accordingly when we negotiate for deals, and then we can know that we're striking the most profitable deals for ourselves and not giving away too much...or paying too much.
It costs us a lot to wear the wrong hats during a negotiation.
Let me simply sum this all up with the instruction: "Keep the right hat on, at the right time".
If you'd like to know how to buy income property without one ounce of credit, and no down payments and keep the right hat on at the right time... click here.