How do I negotiate with sellers when I am make offers on self-storage?

When you are making offers on self-storage properties, one of the most important things is how you structure your offer. Many of these sellers have had these properties for a very long time. Some have been in the family for generations. As a result, there is a lot of emotional attachment to them. You need to keep that in mind when you present your offer.

When you write your offer, there are a few key areas of the contract that you need to be aware of. First of all is the earnest money. If you plan on putting down $1,000 on a million dollar property, not very many sellers are going to take you seriously. You need to remember that this is the deposit that says, “I’m serious!” If you structure your offer correctly, you can make it so that your earnest money is refundable up until a certain point. This allows you to do your due diligence without risking your earnest money.

The second area of the contract that sellers look at is the price. Everyone wants to get the best deal for their property. However, if you can show them that there are four different areas to the contract and they have to choose which ones are most important to them, they may be willing to negotiate a little on price.

The third area of the contract is due diligence. If you are going to have your contract be contingent on everything, the seller might get a little spooked. You definitely want it contingent on your feasibility study. You need it contingent on a variety of other things depending on what you are buying. However, many people put in so many escape clauses that the seller isn’t willing to work with them.

Finally, the seller wants to know when you are going to close. They want to know when they get to spend that big fat paycheck. If you tell them that it is going to be three to four years down the road, your offer no longer looks good. Try to be reasonable about how much time you need to do your due diligence so that they feel comfortable working with you.

When you are able to give them three out of the four areas, they are more likely to negotiate on price. Do everything you can to present your offer in a positive way so that they feel like they got everything they wanted, even when you actually got exactly what you wanted. As always, happy investing.