Consultative Vs. Adversarial Deal Making

Now you may have gone down to Barnes and Noble Bookstore at some point and gone through the self help section looking for better ways to learn how to negotiate. Because all of us as Americans never feel truly secure in our negotiation abilities. Now when you go to other countries, you'll see they're much better at it. They negotiate over everything. They barter for the things of the grocery store. They barter for basic things in America we all take for granted that you can't barter over.

I don't think for one minute I can go down to Hurst Rental car when they say that car will be ninety-eight dollars a day. I can't say I'll give you sixty-five. However, you will find in life many things are negotiable. And a lot of those books will try and bring forth in your brain the idea that you can in fact negotiate.

But it's not just all about negotiation itself. Sure, many things can be negotiated. You can negotiate the price of jewelry at Neiman Marcus. You can negotiate just about anything. Even though people think you can't, well, you really can. Because really in today's world, and particularly in today's world, we're all fighting over the issues of products and pricing based on availability and delays and all kinds of things.

But there's two different camps on how to get to that price that works for you. One consultative, also known as win-win deal making, and the other adversarial, known as win-lose deal making. Now what does win-win deal making mean? It means that At the end, at closing, both buyer and seller are happy. But win lose means at closing, only one party is happy and typically it's the buyer. So typically the buyer in a win-lose format

takes advantage of the seller to try and get the price reduced, but does so in ways that aren't really fair. Classic example would be you tell someone you're gonna buy their R V park. You tell them you've completed diligence, everything's looking great, and then on the day of closing you call them up and say, You know what? I've changed my mind now. I don't want to buy it anymore, but I might buy it if you let me have it for half that price.

You know that the seller at this point has already assumed it will close. They've already made all kinds of arrangements. They may have bought another house to move into. They've told all their friends that they're selling. And now you have them over a barrel. And even though you might not get half off, you might get some discount to the price. So that's typical win-lose deal making by comparison.

Now that sounds all kinds of good. Hey, yeah, well the win-lose guy did better than the win-win guy because he got that last minute price concession. But here's the problem, it doesn't work in real life. When you read those books at Barnes and Noble and other bookstores on negotiation, it's always implied in those that that the seller is in a position of weakness, or you try and place them into that position of weakness.

It'll tell you stories about if you go to buy a used car or a new car. Show up on the last day of the month. Show up late in the afternoon on the last day of the month because they know that the salesman has a certain quota that they have to meet. And now you're taking advantage of the fact that the salesperson has not met their quota and now they're desperate to make the sale.

And as the time is ticking down to the last day of the month and the last minutes of that day, they will become truly desperate and they'll push the price even lower than they normally would because they really want to hit it. And or the sales manager may do so'cause he wants to sell X number of vehicles a month to get his bonus, so he once again may be willing to discount the price more than he normally would or should.

The problem is that's based on the idea that the seller is inherently weak. But what do you do when the seller is inherently strong? That makes it a little more difficult. It's been our experience that RV park owners are traditionally well off. They rarely have any debt. They typically have a low cost of living, which they can easily afford, and if they don't like you, if they feel you're trying to take advantage of them they won't do anything with you any further.

So win-lose negotiating for RV parks simply doesn't work. You cannot push rich people around. So that's the problem when you try and do that adversarial relationship. Now, on the consultative side, however, magical things can happen. When you approach every deal with the dream, the understanding that the seller is to be just as happy at closing as you are, then the seller becomes very comfortable with you. And because they're comfortable with you, great things can occur.

such as them carrying financing for you, such as them helping you post sale to make sure you get off on the right foot. Such as them even proposing they stay on as the manager after the sale if that works for you. So all those things that don't work in win lose Work with extra dividends in win-win. So if we all agree that win-win is by far the superior model, how do you engage in win-win? And why do we call it consultative?

Have you ever done anything where you get a third party to help you? A good example of course would be your real estate broker if you were to go and try and buy or sell a property. They're going to try and work with you to make sure that you have a good ending. So if you go to the seller and say, look, I want to get you the best price for your RV park. Now that throws them off base because they're used to that adversarial relationship.

Because they've also read those books at Barnes and Noble. They've also gone through real life and they know how things work. But when you go to them and say on the front end, I want this to be a win win deal. I want you to be happy. And here's what I feel the fair price of your property would be, it throws them off base.

And it kind gets them to thinking, oh wow, this is a different way to do things. And when they start thinking about win-win, suddenly they're also thinking win-win. If you're not trying to con them or lie to them, well then they're gonna try and not con or lie to you. When you go things in a consultative manner it also makes life just so much easier. When you act as though you work for the seller and you let them know that, they're much more approachable. There's no awkward silences.

There's no none of that issues that happen with Win Loose where both people are trying to fill each other out, kind of like having the tiger and the lion in the cage at the same time at the circus. And if you ever read about that, when you have the lion and the tiger in the cage, the reason the lion tamer can do their job is the lion and tiger are so afraid of each other that they don't pay attention to the lion tamer. He whips his whip and runs around, but they don't even care.

They're just only focused on their adversary. That doesn't make for a very good and healthy relationship. It's very, very awkward. But when you're consultative, that means you're the friend of the seller. And in most deals, the seller reciprocates and is your friend too. And it's a whole lot do easier doing business with your friend than it is your enemy. Also, if you want to get a really good price from the seller and such things as seller financing, you'll need to bond.

We talk about this all the time, the importance of bonding and buying RV parts. Bonding means that the seller looks at you as someone they like and want to help. Often older people, because most RV park sellers are in fact older, they want to believe that life is more than just about the money. They like to help people that they feel are worthy of their help.

And if you are in a win-lose format, if you're adversarial, then they can't bond with you. It's impossible. Therefore, they're not going to give you their best price. And they're certainly not going to carry the financing for someone that they don't like. However, if they do like you, then wonderful things can occur. We bought many properties for zero down, twelve of them, and I bought properties for almost zero down.

My very first property I bought, Glenhaven Mobile Home and RV Park, I bought that for$400,000 with only$10,000 down. That was only 2.5% down. Why? Because I bonded with the seller. The seller was my friend and I was the seller's friend. And as a result, he gave me a deal that was kind of like a brother-in-law deal he wouldn't normally give to somebody else because he wanted me to succeed.

And that's the best way to do deal making is when everybody works together to make sure that everyone is happy.

Now, if you can call on any of the sellers from your past deals and have them write a letter of recommendation to you, then you're already a win win negotiator. Because that's the ultimate test. If the seller is willing to say, Yes, I did business with this person and it was wonderful. and it was great and I do it again in a minute, well, then you've succeeded. But if that's not the case, if you've been doing nothing but win, lose deal making in your past,

Then I would urge you to acknowledge the error of your ways and stop doing that immediately. It's very, very hard to ever be a successful RV park buyer if you have that adversarial mindset. So if you really want to do well in this industry, the key is you must be consultative. You must be win win. And here's the great news, it's the easiest way to go. To me it's much easier being friendly than it is to be unfriendly.

is much less stress when you're only telling the truth and working with the seller than when you don't operate in that manner. So the bottom line to it all is consultative win-win deal making is just by far superior. If you want to do well in the RV park industry, I heartily recommend you take that approach effective immediately. This is Frank Roth with the RV Park Mastery Podcast. Hope you enjoyed Talk to you again soon.