Do not make the mistake that most investors make when they perform due diligence on a property and fail to check out the owner at the same time. I like to know as much about a property owner's physical, emotional, legal, mental, and financial condition as I do about the physical and financial condition of the property under consideration for purchase. The reason I want to do the equivalent of a strip search on property owners is to find out if there are any outside factors, such as bankruptcy, engagement, divorce, death, arrest, criminal charges, and imprisonment, that could influence a property owner's decision-making process. Case in point: Last year I was able to buy a two-year option on a vacant, run-down, rail-front warehouse that is worth well over $500,000 for only $5,000 with a fixed purchase price of $375,000. I was able to negotiate a low-cost option and a below-market purchase price because I had done my homework on the elderly owner and found out by reading a newspaper article that he was engaged to be married to a prominent socialite and was going to be cutting back on his workload and unloading some of the properties in his portfolio. And because I had taken the time and effort to learn about the owner's personal situation, I was able to strike a deal with him for the warehouse.
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