Have you ever negotiated your way out of a good business relationship? I certainly have and I have often regretted it. Novice investors typically fall into two camps: the pushover or the bulldog. While there are certainly times to be both, the context of the situation should remain paramount. Some times the biggest winner in a negotiation can really be the biggest loser in the long run because of relationships that get crushed over a few dollars.
I will start by sharing a personal story. First, let me say that I fall squarely in the bulldog category. I have been getting my way since I was knee high by just about any means necessary (all ethical of course). Add to this all of seedy things I have heard about contractors and real estate agents and I became a real pain to negotiate with. In my first rehab, my wife and I were able to secure two workers, who happen to be down on their luck. They did great work, but really needed to be micromanaged. We really had all the power in this situation because they needed the work and didn’t really have any other leads. Long story short, they did a lot of work very cheaply, but as soon as they began getting other jobs we got the shaft (deservedly so). I squandered an opportunity to build a great relationship with two good contractors to save myself a few thousand dollars.
One of the most important life lessons I have learned is to pay people what they are worth. There will always be times when you have the power to under pay someone. I suggest you steer clear of that apple, no matter how good it may look. The hidden cost of putting the screws to someone when you can is evident in the form of decreased loyalty and a deteriorating relationship. Reflect back on the personal story I just shared. At the rate my wife and I were buying houses, we could have keep them in work for years. We would have enjoyed the benefits of getting honest reasonably Read more
Richard Nacht and Paul Chaney at