As a nationally recognized real estate mentor I have become acquainted with scores of REI “gurus” who have large followings…to whom they sell a lot of REI “education.” I say this completely tongue-in-cheek because, as you know, the real estate investing business is full of charlatans and scam artists. These are constantly pitching some new technique, software or seminar that is supposed to be a “magic pill” for those naïve enough to write big check for it.
So, today I am going to talk about the heartbeat of successful business, both in and out of real estate investing. I call it the “psychology of the deal.” You’ve no doubt heard that real estate is a “people business.” This is especially true of residential real estate. Why? Whenever you are buying or selling a house, you are occupied with a property that is likely someone’s home. Behind every door is a family with a unique set of circumstances. Regardless of what direction your real estate investing business is taking, life goes on. Now, understanding the nuances of life in general will arm you to become a better scout of motivated sellers as well as a ninja negotiator.
This is why, in my mentor for life!® REI mentorship program I FIRST teach the “psychology of the deal” before we ever get into the REI techniques associated with the transaction. One must be adept at reading people as well as fully aware of the signals they themselves give to others. This is why I often have my students review this particular training module BEFORE writing their first few offers.
It’s funny, but I have actually gotten deals where my competitors have failed. In fact, at times I have even paid less than for those properties than they offered. Again, understanding the human dynamic has served me well. I believe that putting ourselves in the shoes of others gives us insight into what makes them tick. What will compel them to sell us their property at a huge discount?
For us, as Real Estate Investors, it’s always about the money. We must have a wide margin for profit. With an enhanced understanding of human behavior, we are able to perceive the issues that mean most to them…and it’s often not just money. When working with new mentees this concept takes them a little time to embrace. At first it is fully comprehensible, but I have found that new students will often revert to their old patterns of thinking. Making the transition to an REI pro with the natural ability to view matters from the paradigm of the other person simply takes practice. I live by the words of Covey: “Seek first to understand; then to be understood.” Try it and watch your REI business grow as a result.
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