I once represented the CEO of a large publicly trade company in a few real estate transactions in our market. He thought he would teach me how to negotiate.

He told me to “Get as much as you can. Push it till they are about to walk. Then back off and be friendly. They when it is time to sign the deal, refuse until you get just a little more”.

I didn’t represent him very long.

In a world of scarcity, where in order to win, someone has to lose, this approach makes sense.

In a world of abundance, where there is enough for everyone, this approach makes no sense.

Neither is “true”. One approach just seems to be more workable, especially in today’s self storage environment.

It really takes a special something to buy self storage today and have it work.

Here’s what I recommend as you are out there trying to close a successful self storage project:

Help the Seller achieve what they want.

Now this isn’t as easy as it sounds today because it is often hard to actually talk to the Sellers. Real Estate agents often act as a buffer, or a wall, between Buyers and Sellers.

I always try to have the Seller be present as I look at a facility. I want to talk directly to them and really get into their world. Try to find out what their real goals are. What is really motivating them.

I don’t mean how much cash they want to get, but their real motivation for selling.

How would selling this project help them achieve their real, underlying goal.

Its rarely money.

Find out what is it, then help them realize it in a deal with you.

In the online course I’m about to release, How to Build Your First Self Storage Facility, I talk about a deal we are currently building.

But there is an interesting story behind how this deal came to be for us.

The person who owned the land we are now building on contacted me with an approved self storage project, but his partner had abandoned him.

The land owner had purchased a food processing company many years ago. He shut it down eventually, then turned the site into a commercial development and sold off the land for retail and hotels. It is right on an interstate intersection in our market on the major north south interstate.

He always thought the remaining acreage would be good for self storage but knew nothing about it. His attorney connected him with a self storage owner in our market, they spent a year putting the project together, got it approved, then the self storage partner sold his facility to a REIT, made a windfall, and decided to “retire”.

The land owner lives in Chicago, did not want to do the project on his own, and connected with me. He would put the land in at a “discounted” value, get cash for his land, then turn around and be an equity partner in the project.

2015 was a challenging year for us in buying self storage and we were thrilled. We stepped in and changed the project to align more with our business strategy. He was thrilled.

We said let’s finalize what we are going to build, then sign the LLC documents. That was fine.

At last, my streak of losing deals was over.

Then, the Seller got an offer for the land out of nowhere for one million more dollars then we were going to pay him for the land.

We had not finalized out documents, so he was free to take it.

It hit me like a 2 x 4. I was embarrassed to tell my partners I had gone this far without a signed document. I was beginning to even doubt my own abilities in getting a deal done.

Once again, I had lost a deal.

But, through out this process, as I really got into his world, I could see he has all the money he really needs.

This person comes from humble beginnings and has built everything he has from the ground up, and doing the right deal is very important to him. It is critical that he feels like he is always making the best decision. The best decision is the one that creates the best deal.

It is hard to argue that $1,000,000 cash at closing is not the best deal.

I was disappointed, but I got it.

I was not sure what to do at the meeting where he told me about the offer. I just asked him to wait a week before he finalized it.

I was buying time to think.

I couldn’t come up with anything that made our deal better. Then during that week, the appraisal came in from our lender on the project we were losing.

It was appraising for even more when it was stabilized than I had represented in our financial projections.

That was it.

I emailed him the appraisal, and said I understood if he took the cash, I probably would too. But before you sign it, I want you to see what you’re giving up.

If you take the cash now, you are losing the chance to own 25% of this deal.

His 25% ownership when the project stabilized was more than the extra $1,000,000 he was going to get at closing.

I also realized that we would probably have more “equity” to work with at the point when we usually refinance. I offered him an additional $200,000 in year five when we refinance and give everyone their cash in the deal back.

That was all it took; he was in.

But only because I found out what was really motivating him, then helped him get it.

He wanted to do the ”right” deal. This was now the “right” deal.

It wasn’t the cash or the money. It was doing the right thing. I just had to make our deal the right thing to do.

Money is rarely the real motivator.

It is what the money represents to someone that is critical. Get past the surface, see how the world is occurring to the Seller, and then help them achieve their goals.

Do that enough times and you can have anything you want in life.

For me it is a great self storage business.