How many times have you been told that you have before you the opportunity of a lifetime?
I know that I regularly receive approaches about such once in a lifetime opportunities. Although the person promoting such outstanding opportunities often genuinely believes this to be the case, I have realised that this is just sales talk. My belief is that a) if it’s such a good deal, it will still be there tomorrow and b) the opportunity of a lifetime comes past at least once a day.
Let me illustrate this to you with an incident that happened to me recently and which I describe in my book,
Due Diligence Made Simple.
One of my children is studying at university in a regional country town. For the past two years she has been living in a college on the university campus and she told me that she wanted to move out into a place of her own. I showed her how to research the rental market and I also explained the formula I apply as a real estate investor whenever I buy a rental property. This is the same formula that I teach in my
Super Secrets® to Wealth do-it-yourself real estate investment home study course. I encouraged her to do some market research and then report back to me.
Her findings were that because of the strong rental demand in the town, she would be better off buying a property rather than renting, since the repayments would be about the same as the rent payments. Once she had finished her degree, the property could be rented out to other tenants and therefore the investment made sense.
After some research, she found her ‘dream home’ in the agreed price range and advised me that it would be going to auction on a certain date. It so happened that the auction date also coincided with the day that we were going to pick her up for her semester break.
My wife and I arrived at the auction and found that apart from ourselves there was only one other serious bidder. Fortunately for us he was an investor who had done his research and his sums prior to attending the auction. As it turned out, he had valued the property at exactly the same amount as I had. This became obvious when he stopped bidding once we had reached his pre-determined price and he stopped bidding. At the strong urging of my daughter (fathers are always a soft touch, aren’t they?) I bid an extra $500 to become the highest bidder. The bidding had not reached the reserve price and the vendor rejected our bid. Despite urging from the real estate agent on the one hand and my daughter on the other, I refused to go higher to meet the vendor’s price. As far as I was concerned, the property had a certain value to me as an investor and I was not going to go any higher.
My daughter was dismayed and told me that according to her research, this was the only property in that price range in town! I calmly explained to her that I did not believe that to be the case and promised to find her some alternatives within the next hour. We simply drove around the area for a little while and found two other properties within two kilometres of the house that she was interested in. Six months later, the house we were interested in at auction was still on the market looking for a buyer. We are still willing to buy, but at our price. I’m sure that if we are willing to wait (which I am) then we will have the opportunity to buy the house on our terms.
If we miss out, that’s OK too because I am sure we will have no trouble finding another property on our terms. There are a number of important lessons to be learnt from this little story.
The first lesson is: don’t become emotional about your investment decisions. Buying the home you want to live in is partly an emotional decision and partly an investment decision. On the other hand, buying an investment property should be a totally non-emotional decision. You should do your figures and stick to them. When you are willing to walk away from the deal at any time the real estate salesperson has no emotional hold over you. If you let them work on your emotions, they will drive the price up on you.
The second lesson is: be willing to wait. From experience I can tell you that I have had numerous situations where estate agents have come back to me after several months and asked if I am still willing to go ahead with the offer I made on a property several months prior. At the time, they rejected my offer, believing that they could find a buyer at a higher price. Then they found that they could not sell the property at the vendor’s asking price. They then came back to me as a ‘buyer of last resort’. It puts you in a great negotiating position if you have the nerve to wait. If you want to find out how to make a fortune with positive cash flow real estate check out the Super Secrets® to Wealth do-it-yourself real estate home study course.
The third lesson is not to become attached to the outcome. Take the attitude, if it comes off – that’s great. If it doesn’t, that’s OK too. You should not be attached to the actual investment. In other words you should be willing to sell at any time at the right price. You should also not become attached to the buying or the selling process. In other words, don’t be an anxious buyer or an anxious seller.
The fourth lesson is to realise that sometimes you’ll miss out on a deal. That’s part of the process and it doesn’t matter. If you negotiate as hard as I do, you’ll miss out on lots of deals because you drive a hard bargain and you’ll only want to buy on your terms and only the type of investment that meets your investment criteria. It’s a part of the investment process that I willingly accept because I know that the deals I do succeed with are excellent buys. They are the deals that make me money.
When you understand and adopt these lessons as a part of your investment creed you’ll believe as I do that the opportunity of a lifetime comes past at least once a day!
The book Due Diligence Made Simple explains how to understand yourself better and your attitude to risk so that you can optimise your wealth building strategies.
About Hans Jakobi
Hans Jakobi is an educator, author and investor. He is the author of six best-selling books including,
How To Be Rich & Happy On Your Income which is available at:
www.supersecrets.com and the presenter of the Super Secrets® to Wealth do-it-yourself real estate home study course. Join Hans Jakobi’s FREE Super Secrets® Online Newsletter
© 2002 Hans Jakobi. All rights reserved worldwide
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