“I’m Rick Harrison, and this is my pawn shop. I work here with my old man and my son, ‘Big Hoss’. Everything in here has a story and a price. One thing I’ve learned after 21 years – you never know what is gonna come through that door.”
That’s the beginning of one of my favorite TV shows right now. While I spend almost no time in front of the TV, every once in a while there’s a show that catches my attention because of the life lesson values that it teaches. With Pawn Stars there’s one GOLDEN NUGGET that’s priceless for a Real Estate Investor. So what is it that Rick does that puts a little smirk on my face every time he does it?
Real Estate Investors NEGOTIATE
Just like you as a Real Estate Investor Rick’s in the business to make a profit. Not on just a few deals, Rick’s focus is on making a profit on every deal and he’s not afraid to tell people that.
Whether it’s an old sweet grandma, a slick car dealer type or someone in between he doesn’t hesitate to use the line, “I need to make money on the deal”.
In all the years I’ve been doing Hard Money Loans and Flipping Homes…
I’ve worked with a lot of people breaking into real estate investing and too many of them are afraid or too timid to tell the seller they need to make a profit. No one expects you to invest like you’re doing it for charity or just for fun.
Acting timid is a mistake. Go into the conversation knowing that you will be telling the seller that you need to make a profit. My rule of thumb is 10% or $10,000 whatever is greater. Lay it out for the seller, “Look I’ve taken on a lot of risk both financially and in time, not to mention a few sleepless nights. “ Making a profit is why you do what you do and don’t be ashamed of it. Making a profit is what defines you as a Real Estate Investor.
Back at the Pawn Shop Ricks is famous for comebacks when someone comes in with an item and tells him how much they want for the item. Rick almost always responds with one of the following…
“What do you REALLY want for it?”
“That price is never going to happen.”
“What do you want for it in TODAYS ECONOMY?”
We would all benefit from channeling our inner “Rick” and use these with home sellers. For example, don’t just ask them what they want for the home, ask them, “What do you want for your home in TODAYS economy?” and when their response is unreasonable, “THAT PRICE IS NEVER GOING TO HAPPEN”.
Then shut up and wait to see how the seller responds and how much they drop the price. I will tell you right now you’ll make or lose more money as a Real Estate Investor in that 15 minute conversation then most people will work for in 3 months. You could save tens of thousands of dollars just in that few minute meeting.
All of that being said when you need hard money loans from DHM take a deep breath, I’m no Rick Harrison, there’s no haggling, we’ll offer you the best price you’re going to find. So save your Pawn Star negotiating skills for someone else.