In my more than 24 years as a real estate investor, I have seen real estate investors ranging from neophytes just starting out to self-proclaimed seasoned veterans get snookered into overpaying for property, all because they were unable, for whatever reason, to master the fundamentals of negotiations. This hapless group of investors failed to grasp the very basic concept that when it comes to the terms of a real estate transaction, everything, and I do mean everything, is negotiable. They did not understand that, unlike your local Home Depot where every item in the store's inventory has a universal product code or UPC that lists the product's non-negotiable sale price, how much you pay for a real estate option or property really depends on how good a negotiator you are. And if you are a shrewd negotiator, you can buy low-cost real estate options and properties at below-market purchase prices. But, if you are a poor negotiator, you will probably end up paying way too much for your first and, most likely, your last real estate option. In this business, when you start off by overpaying for a real estate option or property, you put yourself behind a sort of financial eight ball, which can be very hard to get out from behind unless you are extremely lucky and can resell the option or property to an uninformed investor who is willing to pay more than what it is worth. However, if you cannot find an unwitting adherent to the greater fool theory, your costly mistake will come right off the top of your resale profit, which may result in a breakeven deal at best. And I have yet to meet anyone who has become a profitable real estate option investor by doing breakeven deals!
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