 Hello Aces, welcome back to module three, lesson 1.2. We're gonna be talking about the four cost saving things that you can negotiate for aside from free rent. And these are the items that you should actually be aware of. So then that way when you go into the negotiation process, when you don't get what you're asked for, you can ask for multiple different things. If you haven't already done so, make sure you go back to the previous lesson and understand the mindset that you need to have, the framework that you need to actually possess in order for you to negotiate properly. And also, how do you do your homework? All in the lesson previously. So definitely go back to the previous lesson if you haven't already done so. Otherwise, let's dive right in. What can you ask for? Lower rent than proposed. Something that you need to ask for is an actually achieve and get from your broker or from you actually doing the research are the comps. Comps are the comparables, comparable of the price per square footage around your area. Oftentimes they may be a little bit lower or they might be a little bit higher. So when you're doing your comps, choose the ones that are lower. And oftentimes the reason why they're lower is because they haven't adjusted their rates yet or they have signed at least many years ago, maybe like three years or like two years ago. And then the rates were a little bit still behind. Then bring those comps to the negotiation process. And your landlord oftentimes would see these comps and they're like, you know what? Everyone else is offering at $40 per square footage and you're offering and you're proposing $45 per square footage. That is a good reason for your landlord to be like, you know what, I understand that they're cheaper and I wanna work with you, I love you as a tenant. You know what? I'll decrease the price per square footage to 42. And that itself is substantial savings over the long term. So definitely ask for lower rent than proposed if you can, but don't just ask for it. That's the tip. I hate it when people come and ask me for things when they don't have anything to back it up. If they just pull things out of their ass and just be like, yo, you know what, we'll send everyone else is cheaper. I'm like, what do you mean everyone else is cheaper? Yeah, there's just cheaper. Give me free rent, give me lower rent. I'll be like, no, that's not how it works, my friend. Do your homework, guys. Go into the negotiation process with a win-win situation, with a win-win mentality. Be genuine. But at the end of the day, make sure you always do your homework and actually have your statistics to back up why you think this place warrants a lower rent. Second thing is free rent for X months. May, a lot of times, the reason why you can ask for free rent is because of the high build-out costs. A lot of times when it's a unit that is, I would say brand new. When it's brand new, if you wanna build, let's say a restaurant in that area, then you need to fix, let's say build a washroom. Building a washroom is $10,000. And usually for a empty unit that hasn't had any renovation, it is just a brand new unit. They don't have a washroom build-out. You need to do all the piping, the plumbing, the HVAC and everything, and that itself can cause hundreds of thousands of dollars. And when you do invest into a renovation like that, your landlord will work with you and provide you with free rents in the future. And the reason why they would do that is because the building itself, after you vacate, the renovation they own it, the washroom they own it, the piping and the HVAC, everything they own it, which is the reason why it's a lot of incentive. If you, as a tenant, is willing to invest in this building, in this unit, they're gonna be able to work with you. So definitely ask for free rent because of the high build-out costs. Knowing the fact, once again, what substantiates your request is key in this process. Same thing, like what I was talking about, the splitting the build-out costs. It is so, so, so, so common as a practice for your landlords to split the build-out costs with you. Given the fact that it is a brand new unit, I'm not talking about, hey, I wanna do this rental, this place is already a restaurant itself, and now I wanna redo it just because I'm changing the concept. That's a different story. I'm talking about a brand new gutted unit that has no washrooms, no nothing, just brand new. You need to build everything out from scratch. That is a time when you can actually go and negotiate to split the build-out costs with your landlord. Because once again, it increases the value of the unit after you have invested in the renovations. Next up is not increasing rent. A lot of landlords still work in rent increases for future years, so for example, the first three years, no rent increase, but the following year, 10%, following year, 15%. It is something that you can actually negotiate for, maybe they're lowering that. Or actually, I do recommend that when you're talking about subsequent increases in rent to not go with percentage. The reason why I don't like going with percentage is because it's a very ambiguous amount, and oftentimes the number is higher than what you expect. So go with a fixed amount. And what I mean by that is, hey, you know what? $40 first year. The third year, $42. The fifth year, $45. You know exactly how you can budget, and you know exactly the amount that you need to pay. Although the numbers might work out to be the same, it definitely helps you with your budgeting. So actually something that you can negotiate for is in the subsequent years to not increase the rent. It is even more easier for you to do that right now during the COVID, during this whole pandemic, because of the fact that we just want a good tenant, right? So we just want to be able to rent out our unit. So if you're asking for these things, most likely I will say yes with my own unit. So definitely know what you can ask for. Today, I also want to be, I want you to meet Amor. Amor is a student of ours, and she was beginning her whole food process, and this just happened last month. We're talking about August, August of 2020. She just got one and a half months of free rent. That's equivalent to more than $3,000. And on top of that, the monthly rent went from $9.75 to $8.50 for one year. More than $3,000 in savings, guys. And incredible results by Amor. And it's just something that I want to show you that it is possible even during this process. This acts as a great inspiration for you that, hey, someone has already done that. So you too can achieve the same thing. Your turn. Do your homework on your locations, identify what you can ask for in the negotiation process, understand the framework of what you need to be in in order for you to enter through this whole process. Download in the link of the worksheet so then that way you can go along with the whole process. In this lesson, we talked about the four cost saving things you can ask for when negotiating things aside from free rent. In the next lesson, we're gonna be talking about how you can assemble your build out team to complete your restaurant on time and on budget. I'll see you guys in the next lesson.