 Hello ACES, welcome back to module 3, lesson number 1, negotiating free rent. This is one of my favorite lessons because you get to see the results right up front and we have helped so many students get free rent and that's the reason why I'm really excited to be able to share the tactics with you moving forward. So now it's time to put on your technician hat and if you're not really aware of what this means then definitely go back to module 1, we talked about the three altered egos. This is super important for you to understand because all along we've been putting on our entrepreneurial hat, now is our time to actually take that off, put on our technician hat and actually go and fix the problem. So you'll never ask what you don't get, okay? You'll never get what you don't ask for and this is something that is so true which is the reason why within our YouTube channel I always ask you guys to like, subscribe and comment. And quite frankly it works, we see an uptake on more than 20% just because we ask these questions so that's the reason why you should always ask. Don't be afraid to negotiate and ask, I think this is one of the biggest things that happens with a lot of first time restauranteers or first time entrepreneurs because it feels not right to ask, it feels like oh that's the number we should just sign up for it. But speaking from a perspective of a landlord, I own multiple different buildings and with those I actually understand that I account for people asking and on the other hand whenever I go and negotiate leases and rent for different places I always ask for free stuff mainly because I understand if they're seasoned landlord they will always expect you to ask and which is the reason why you should definitely always, always ask, okay? And at the end of the day what do you have to lose? There's really nothing that you have to lose. The worst case scenario is that they say no and life goes on and then you can continue the negotiation process but always ask. The art of negotiating, there are three parts to this. Negotiation is actually a really, really big discipline and I've read many, many books about this topic and I feel like that I'm picking out only three items which I find are the most applicable to our situation when negotiating for free rent. So in case you were wondering like hey Wilson there are like many other different ways but I'm sharing with you what is, what's going to make the most impact and what has worked for me and all the other rest of the students who have taken this course. First step is to establish the relationship. You're dealing with another human on the other side like what I was saying. You don't need to be scared of the other guy on the other side. Do you think that they're like the big pharma, the big dogs and they're evil and that you know what quite frankly they have no emotions right? No on the other side of the transaction is another human being like you like I and because of the fact that you're able to establish that relationship there is that human touch to it and with having a human touch a lot of things goes beyond the transaction. It goes beyond the lawyers. It goes beyond the contract if and when you have that relationship with your landlord which is the reason why like you definitely need to establish that relationship up front because it's a five, ten year long relationship that you're going to be having with the landlord. So there are many situations where you need to ask for a favor or vice versa which is why having a relationship is so so important because like I said on the other side of the transaction is another human and humans are emotional machines right? So we definitely need to be able to establish that relationship. It makes so much benefit to you as a landlord because there's so many you as a tenant and me as a landlord as well because there are just so many different scenarios where having this relationship definitely does help and I don't want to actually let me share one with you it is right now it is during COVID and I understand how hard and how difficult it is for my tenants to run and operate their business and so when they and we always had a really good relationship they always pay the rent on time we always discuss and then they were always telling me about their expansion plan and updating me so we have a really good relationship I want to see them succeed because when they succeed that means that they have enough money to pay for rent that they're going to stay there for a while and on top of that who knows they might rent my other units right? So I think that there is so many different positivity that comes from it so when COVID hit they were asking for us for rent decrease in a way I was kind of reluctant to do it at first because I'm like oh I gotta take care of my own expenses but after I would say a month to two months in I start to realize and I start to see how much they're struggling that their business went to zero because of COVID they run a tutoring academy so it's like damn like no one is going through tutoring right now and there's no school let alone tutoring so I definitely see that they're struggling like a lot and that's the reason why I was actually able to work with them to decrease their rent for a duration of four to five months to help them out during the whole process so when they do have money they are willing to actually pay out more so I think it's all about the relationship and if they did not have that relationship with me to begin with I would have never agreed to decrease their rent because I just don't know this person I'm like hey you know what why would I care it's just someone on the other side but no it's all about the relationship second thing choose honey over vinegar guys people can naturally sense if you're secretive or if you're disingenuous so make sure you guys choose honey over vinegar at all times what I mean by honey is being genuine being like a honey right don't be a bitter sour old fart like a vinegar we don't want to do that because like I said it all comes back down to the relationship you have with your landlord and by being nice by being genuine you always are gonna be able to have that well-received and even if it's not well-received what is there for you to lose there's nothing for you to lose so always be nice don't always haggle over short little things be genuine because within this world between like you know renting and whatnot world the word spreads super quickly so never ever be a dick third focus on win-win guys understand what your landlord wants more just they basically just want a stable tenant who pays on time like honestly the biggest thing that I have to worry and the part of the reason why I'm giving my tenant a decrease in their rent is because I'm afraid I'm afraid that they're gonna go out of business and when they do go out of business what's gonna happen then no one's gonna rent my unit and when no one rents my unit it could go on empty for three months for six months so understanding that from a landlord perspective you on the other hand as a tenant can establish these win-win situations knowing the fact that hey you know what I'll pay my stuff on time give me a 20% decrease in rent and on top of that what I'm gonna do for you is I'm gonna put my house on collateral and what that means is if I don't pay my rent if I bail then you can take my house well whoa whoa whoa that is an amazing deal so me as a landlord I feel much more I guess protected which is why I would be willing to let go of 20% premium and I'll give you the 20% discount and on the other hand you you'd be like yo I just got 20% discount on my rent on this lease I thought I I know my concept would do well I know my restaurant would do well and I know I'll be paying for rent so why why wouldn't I want to be able to put my my assets on as a collateral that's a win-win situation that I'm talking about at the end of the day you need to understand you cannot take everything off the table and what I mean by that is it cannot just be you who's winning nor can it be your landlord who's winning and I think a lot of people go into a negotiation process or lease negotiation specifically that it's like a winners winner takes all kind of situation but at the end of the day it's not winners takes all it's a win-win collaborative relationship that we're trying to establish so always look from your landlord's perspective what is reasonable what would you do if you're a landlord if even you won't take the deal that you're proposing why would you think your landlord would actually accept it always go for the win-win so before those are the three tactics and those are the three mindsets that you need to have and that it would help you with negotiation process do your homework in addition to that guys what I've just talked to you about is purely the mindset when you go into negotiation these are like the nice to do nice to have things something more tangible are your homework do your homework so then that way you're equipped yourself with the facts and you're equipped with yourself with the mentality for negotiation so when you do head into that process of negotiation you're well equipped to fight that war per se knowing your fact gives you tremendous amount of leverage guys doesn't matter if you're the best framework and mindset it's a very different story if you choose to be nice so for example when you're going to a negotiation process with your landlord you can choose to be nice and not bring up all the different facts that you and your homework that you bring in as leverage however when push comes to shove you need to let the landlord know on the other hand that yo I know my shit I know what I'm talking about I know your shortfalls as the landlord so don't try to screw with me because not all landlords are the same and not all landlords are super nice at the same time so you got to be able to protect yourself which is why doing homework is super important now you might be thinking Wilson what kind of homework are you talking about what facts well previously we talked about all the different variables and which is the reason why I covered it in the previous lessons if you haven't already done so make sure you go back and watch those lessons because that lays the foundation of what we're gonna be talking about today what facts how visible is your new unit is it tucked in is anything blocking the area that prevents it from being seen how many parking spots are in the area the lower the parking spot less accessible cheaper rent how many competitors are the same concept around the block so if there's a lot of competitors tell your landlord hey you know what lower the rent because there's like five other restaurants that are selling the same concept I want to be in here I want to sell the same thing but lower the rent for me and most likely they'll they'll know the competitive landscape which is why you know what I'll give you a chance but but you know I'll find I'll give you 10% off you know what is a crime rate like in that area if it's super not safe people understand that and that itself is another element that you can bring in to the negotiation process but don't just throw out these numbers about hey it is you guys don't have a lot of parking spots or hey your crime rate is really high it seems really sketchy around the area no actually do the facts do your research figure out what is the crime rate talk to your brokers go out and actually ask the city hey you know what what is the rate of crime rate how many parking spots actually be there in the location and actually count this parking spots ask the brokers how visible is a unit take pictures of it look at it from different angles and actually do your research do your homework what homework what facts what is the average square footage around that area this is also super important because it's all about competitive pricing if Nick's door is having their unit on lease for $10 cheaper and yours is the same footage same area same visibility why can they be cheaper why wouldn't you rent from them which is the reason why you would negotiate and tell the landlord hey you know what Nick's door is renting for $10 us can you give me $10 less in your rate and most likely they'll see yes something comparable for zoning are there any empty units around the area same thing if there are a lot of empty units that means that there are a lot of supply when there's a lot of supply prices go down because now you have more options how much renovations are needed for to be done on the unit this is a big big thing because a lot of landlords they understand that if there is a big remodeling that needs to be done within the location they will compensate for part of the renovation cost but if you don't know and you just go into the unit and sign the lease then you know what it's all up to you to do all the renovations so make sure that whenever you are renting out a unit go and bring your general contractor for to negotiate because they're gonna be able to tell you how much money is it gonna cost for you to actually build out your concept to deal with the city to deal with the zoning's build up take a lot of money and time landlords who understand totally exact as exactly as I was saying how much traffic flow around their area is there a lot of foot traffic are there not a lot of foot traffic sit at the coffee shop right across from it and then do your account do your tally yourself and then when you go and negotiate with your landlord you'd be telling them you're like hey you know what roughly on on approximately maybe like 5,000 people walk through this door of this this this lane and for me I was expecting 10,000 your when you gave me this statistic is he said 10,000 but how come all I'm counting is 5,000 well you know what I've calculated on a weekday and a weekend day and night so yeah my stats are pretty accurate so by you doing something like that if your landlord was just throwing some BS numbers out at you then they're like whoa whoa whoa this guy did their homework I know now I better not screw around with them and give them the benefit of the doubt bring a clicker start checking per hour do this for weekdays week ends get a clear idea how much traffic for each session and if it is worth the price this is something that is super important guys make sure you guys do your homework okay now that you did your homework what do you do you go and negotiate rule of thumb make sure that you visit 10 location and submit an offer for 3 never ever fall in love with a location we just talked about this in the previous lesson never fall in love with a location because you want to avoid having confirmation bias okay if you're not quite sure what confirmation biases is just basically falling in love with the location and forgetting everything else that says otherwise that's confirmation bias when you're in it too deep and you just ignore everything else this happens to the best of us so definitely submit three offers for three different locations bottom line is what you can ask for what can you ask for and that's something that we're going to cover in the next lesson so make sure you guys keep watching in this lesson what we talked about is how do you negotiate your restaurants lease and get free rent these are the tactics and on top of that the different items and elements you need to do homework on in order for you to equip yourself to best negotiate free rent in the next lesson we're going to be talking about the for cost saving things you can negotiate for aside from free rent so if your landlord is playing hardball then these are the four things that you can also negotiate for I'll see you guys in the next lesson