Welcome to another episode of the NEGOTIATEx Podcast! We are back with Part B of our conversation with Bryan Rodriguez, Co-Founder of PCS Colorado – The Lana Rodriguez Group. A former student of Aram’s at West Point, we delved into Bryan’s early negotiations career with the military in Part A, which you can listen to here. The focus of this episode however, is mainly on how Bryan used his negotiations training to build his and his wife’s successful real estate business and how negotiations played a role in him closing a $25m hotel in Colorado!
To get things off the ground, Aram asks if emotions play a significant role in the process of brokering property deals between buyers and sellers. For Bryan, while it’s undeniable that being an agent involves managing the interests, expectations and emotions of the principal stakeholders; there are three key things to keep in mind in order to mitigate any emotional hurdles that may arise. Being consistent, refreshing and disciplined.
Consistency involves one’s professional commitment and being true to their role as a broker dealer. Consistently fulfilling one’s role, both in action and communication, inspires confidence in one’s counterparts, in this case the property buyer and seller. But during communication, it’s equally important to be refreshing with one’s messaging when sending reminders or working on timelines of deals to minimize the possibility of the stakeholder getting overwhelmed and the deal going off the table. Lastly, being disciplined helps to form habits and stay within legal and ethical boundaries when deals are difficult to reach.
The conversation then turns to a case study, where Bryan got to apply The Seven Elements of Negotiations tool. During the pandemic, when he had just started with commercial real estate, Bryan became involved with the brokering of a hotel property that fell through the cracks on his birthday of all days. But resolving to make things right, he leveraged his network and his negotiation skills to find a new prospective buyer to push through the deal. The issues did not stop there however, as the property was not the right fit for the buyer. Not to be dismayed, Bryan got his notebook out to list down all of this buyer’s criteria and requirements, and after due research, found the right property for him. The hotel was not listed for sale, so Bryan had to get in contact with the acquisition director and use his legitimacy to present an offer.
When the time to make the deal arrived, the seller was not completely on board with certain technicalities in the buyer’s letter of intent. So Bryan took the Red-eye to meet the stakeholders in person and develop a relationship with them that would prove his intent and seriousness. This would serve him really well later, as unfortunate circumstances led him to contract COVID19 and miss out on the closing. However, the relationships he had cultivated and the good-will he developed paid off as the stakeholders were committed to making the deal work out in the end.
In this example of a rollercoaster negotiation, all the seven elements were present. The stakeholders’ interests were ultimately aligned, despite the complicated pandemic market. Bryan’s own position as an agent of the buyer was legitimate, as were his communications throughout. His proactive approach allowed him to build real, meaningful relationships with his counterparts. In terms of alternatives, the options were simple; either close the deal or let things be as they are. This little bit of pressure kept everyone on the same page, as they weighed their commitments and worked together to reach an acceptable outcome.
Aram, Nolan and guest Bryan Rodriguez share more of their insights on this episode of the NEGOTIATEx podcast. Write to us at team@negotiatex.com if you have any real estate negotiation stories to share with us or if you’d like us to cover a particular topic in a future episode!
Aram Donigian : Well, and that's what I was hoping you, you talk maybe more about is that, I mean, part of the negative consequence of a threat is the emotionality. We, we hear about emotions and, and nature, the emotional nature of real estate transactions. Cause it's not just a home, but it's, it was my home. Right? How, how do the, how do things like emotions show up when you're, when you're working with buyers and sellers?
Bryan Rodriguez : No that's a great question because I think it goes into something deeper as a professional because it, it goes back into, I think, I think you hit it on Nolan and it's like that agent-principal tension. So how are you managing their interests, their emotions, and you're essentially their intermediary, right. Would you agree? Yeah. And so I feel like brokers are, we're our worst critic. So we may not think that we're effective because we're not moving forward fast enough to get to closing. In my experience, in managing their interests, their expectations, their emotions, I think it comes into three things, consistency. And when I say consistency, it's consistency is you as a professional, because remember they hired you for who you are, what you demonstrated. And the moment you start deviating from who you are, I, you start derailing yourself because remember they hired you for who you are and what you have done. And that's both the buyer and seller and you need to be consistent with that because why? The buyers and sellers will become emotional. They will become pessimistic. They will like, they will get stressed by other factors outside of the deal. And so if you're consistent, you literally double down on your superpower. Does that make sense? So stay consistent. Second is being refreshing. And these, these are things I just like made up in terms of how I balance that. There're no like, you know, scholarly things,
Nolan Martin : I'm writing it down. So it's official. So don't you worry.
BR : And so what I've learned is that if you are refreshing in order to effective communication, you need to constantly remind them of their interests. Of their end state. It's like, you know, we're in the army, we're like, “Yo man, we got like 10 more miles in this rock when we're done, you know, what's next we could be. We go on leave.” I know it's a simple example, but you wanna remind them that hey, and we're done here. We're gonna continue your legacy. We're gonna take those proceeds and we're gonna get you another asset that's gonna provide for, you know, X, Y, and Z. And so if you don't remind them, they they'll just get overwhelmed and it's over. And so lastly, I would say discipline, but it's discipline with an endurance because you know, not all transactions are like quick and easy.
And like the big deal I just did that was extensive, you know, was over a year. And usually transactions don't take that long. And so when you are going into this war, right, this campaign, I mean, you gotta have endurance because the experience in totality is overwhelming. And so I always say that there's a big difference between motivation and discipline, right? Motivation will fade. It's, it's a natural human drive that, that you need to constantly boost your brain to keep going. But with discipline, I mean, you are literally, it's more important than motivation. You're constantly moving in the right direction based on habit. And so if you are disciplined within the transaction, keeping professional, keeping pragmatic, always underwriting, always being ethical, right? Keep that discipline because the emotions are just gonna flare. And the moment you start appealing to their emotions, both buyer and seller, I mean you're probably gonna end up unethical or you gonna end up illegal.
Does that make sense? Because the consumer, the buyer and seller, they're not licensed. They don't practice. They may buy or sell real estate, but they dont know the the law of the land, how the industry works and what are the real consequences for not disclosing a foundation because they're like, “Oh, it's gonna end the deal.” Like, no, you will disclose because of X, Y, and Z, you know, this law states this. And so it's really those three things: being consistent, being refreshing, being disciplined no matter how long the transaction takes.
AD : Brian, you, you, um, have talked a little bit here. You've referenced this big deal that you just, just experienced. I'd love to hear a little bit and tell us, tell us that story. I think so many times we think about real estate as kind of a single transaction, many negotiations, a single single transaction. And this one sounds like what you're just describing. It was occurring over time and all these, you know, need for strategy need for patients discipline really put into practice. Are you willing to share, are you able to share a little bit about the, about what you just, what you just experienced and worked through?
BR : Oh yeah. I, I definitely will. Uh, I won't mention like any names or, you know, or, or whatever, but, uh, cause you know, the consumer or the viewer can, can go and research who these people are, but uh, just to be professional. Um, so yeah, I think it's gonna be the meat of this. Right. And to really, to taking a huge case study and applying those seven elements. Right. In understanding how this case, this experience I had is just one big, no negotiation culminating event. And, and, and like I said, before we came here, I'm like, I'm so excited to tell this story with you first. So I, it was like, God willing, you know? Yeah. Um, so I, I guess I'll say the story, how I got there and then getting into the contract. Right. And so I, I started commercial real estate during COVID, so probably one of the worst times to just enter a new venture. Right.
AD : Timing was never your. I mean, was never your, uh, your thing.
BR : That's right. That's right. You know, it's like an IED
BR : And it was just, so I started and I'm a big whale. I call it Moby Dick. Like I'm a big whale hunter. You know, I spear fish in residential. I say it cause of a there's a lot, not right. But the big deals are, are incredibly sexy, incredibly attractive but they take so long and they probably will never come. Right. And so that was my, like my hunting in like theme. And so I was like, I want a big one. So I started leveraging my network and I found a client who owned a hotel. And at that time, I found a buyer and I was doing the deal, at the time it was 15 million and it was classic, you know, old school versus new school. They never, it never worked together. And it fell apart on my birthday, August 26th, 2020. And I'm working out and I, my wife and I are trying to enjoy my birthday.
And I had a good workout. I was so angry. And we were at like a little hotel resort here in town. And I was like, man, I gotta survive. I gotta save this deal. So I contact our network and I found my teammate. He was a comrade with me and he was a big broker in Dallas. That's Mark Allen definitely recommend to get him on cuz he has such an incredible stuff to offer his experience and so forth. And I was like, “Hey man, I know you can get this Dallas money to Colorado Springs.” Right. Dallas is an incredible market. And he's like, “Yeah, give me, gimme the situation.” I was like, Hey, it's a whole L and they want to convert it to apartment. Do you have any buyers and lit literally in five minutes Mark's like, I remember I met this individual. He does hotel conversions at this conference. Hey boom. So he set it up. And so it was my turn now to like make this happen.
And unfortunately, immediately I got this new buyer to offer on the hotel. It didn't work out. He's like, Nope, it's not the criteria. And I'm like, well, this, this is horrible. But remember I said, chase the objection. Why is it not right? Tell me why, help me understand why this isn't blah, blah, blah. And he did, he gave me the exact criteria. So he wanted hundreds of units. Right. He wanted a certain price per door. He wanted amenities to compliment the building so it feels more homey, more as an apartment. And so it needed to be more of an extended stay hotel. So he gives me this laundry list.
Right. And so like in the army, they teach you like, Hey, make sure you have your pen and notebook out. Right. And so I'm just writing it down. And so I, I literally was like, okay, well I gotta go search for this. And I looked through all the databases to find the right hotel. And there was only one and it hotel La Gante. And it was literally the third largest hotel in the state. And it's so funny because if you've been to Fort Carson and if you’ve seen this hotel every day, it's off right up. I, and I'm like, how has this never been, been asked to sell? And then I was like, well, in, in commercial real estate, you always have to solidify the listing side. So you have to have value to the buyers.
Cuz usually in commercial real estate, the, the clients are sophisticated. So they're like, why do I need you? I could go and, and get it myself. They think they can. Right. They think they can, they could definitely underwrite it, but that doesn't mean they can broker it. And so brokering is, is purely negotiations right? And so I literally made the phone call of my life to call their company who owned the property. I mean, you know, my personality, I like to be very charismatic, very dynamic, very passionate. Some people don't like that but I like to be that extreme because I feel like life is too short. So you know, why, why not deliver as much enthusiasm as possible. And so literally I called and said, Hey, I got an offer.
Where do I, who do I give it to? And they're like, “what do you mean it's not for sale?” I'm like, “no, have you, have you checked with your approving authority? Has he said, he's not interested in selling?” You know, the army, right. Get back to like, well you're not, you, you gotta see who's in charge. Right. And so they had an acquisition director and I was like, no, I need to get this offer immediately. Right. So it goes into communication. How are you presenting it to tell being deliberate? And, and they were sophisticated and they're like, okay, this young guy came outta nowhere. You know? And I, I would, I came legitimate. Right. I always include my resume. I'm very professional. I speak the language. I know how to underwrite. I know what everything means. And so they're like, “okay, give me a second.
We'll see what happens.” And I had a price in mine already because I know the math, I I'm legitimate. And literally it was like, by the grace of God, they're like, “we're interested.” And I was like, okay, now I have to secure a letter of intent from the buyer to show proof. Right. But at the same time, I gotta get a listing contract. So before we got under contract, the buyer did, I mean, the seller did not like the buyer's letter of intent. Didn't like who they were. Only liked the price, wasn't a fan of the terms was concerned because of the interest and I'll get into it. Because when there was that stale mate in getting under contract, I had to literally take a red eye. Cause it it's so funny and the way, I think I'm going talk a lot about communication because in this day and age everything's done by text, right?
Everything's done by email. We are removing the person out of it and we're trying to, to put the technology behind it. And when, and I feel like with the higher price points you go, or the more dramatic the deal is, the more it's important for the person to still be there. And so I was like, “You know what? We're not going nowhere. I'm gonna see you tomorrow morning. Can, can we do that?” And they're like, “You're coming here to Texas.” I was like, yeah, I'm gonna take a red eye. And so literally took the red eye, met them. And I met the seller. And what was amazing is that that's where relationships comes in. You are going there not to do the deal, you're going there to make the relationship. And so if you really think about that, I think that will change everyone's dynamic and how they communicate the deal and how they negotiate.
I literally investigated everything about this seller. I knew his wedding anniversary; I knew every deal he did. I knew he was a Marine. Set up commonality. I knew everything. And every time I spoke with him, I somehow tied it to his history. And the moment you, the moment you do that, you're literally satisfying trust. And so, and within relationship to, to make it easier if you listen well, right? If you are truly listening to their interest, you're good at your job and you care, you have answered all the trust. Like that's all you have to do is those three things to really develop that relationship because the relationship's based on trust. So he knew I listen because I researched them. And then when we had the engagement, his interest was that, “Listen, I'm a Christian man. I know I can make money, but I'm incredibly sensitive to the sale of the hotel.
You know why? Because I have a hundred plus of staff, right? We're in a pandemic, doesn't this look like I'm being selfish to sell, right? Yes I have, you know, I have other responsibilities, but I need to be very sensitive to the timeline. And I need to make sure that this is as quiet as possible, that this can move as quick as possible, and that we could not become this big marketing press release.” Because you know, the market at the time was emotional regardless. He loved me. He gave me his trust and I took it and we made the deal eventually work. And that's a whole another saga of like all the concessions and all the options and, and what happened. And we can hit on those, but that's pretty much the Genesis of this, and we haven't even started the deal. Right. Isn't it crazy?
Like, you know, the seven element preparation tool applies to all the timelines. There was a pre contract timeline….
AD : Well, we’ll talk about that. Bryan that's a great story. We talk about the application of these seven elements, right. In it, just to, just to get to the table, right. Just to get to establish the trust so you understand what the real concerns are. Somebody's not gonna do that with you if they don't trust you, if you don't listen, if you're not good at your job, right, you gotta develop, demonstrate those things. And then it carries through the execution of the negotiation all the way into implementation as well. So is there more, we have a little more time folks would love to hear?
NM : Actually interesting. I guess I'm throwing here is, uh, so we actually officer Mike Baker on episode 19 of NEGOTIATEx, and he had talked about the importance of that face-to-face communication. And too often we're relying on text messages or emails when the power of getting in front of somebody, you know, he was an LAPD SWAT negotiator. So his ability to see eye to eye with whoever he was negotiating with was extremely important. So I think that that obviously paid off in your shoes with this deal as well
BR : Indeed, it's refreshing to see a person. Right. And you could connect on so many letters and seeing a blue or green text. Right. And so, but yeah, definitely. And we could break it down. Right. You know, I think I talked about the interests already, you know, the seller was sensitive to, to his organization, but the buyer, they really wanted to enter a new market. Right. They wanted to continue proving their concept. Right. You know what I've noticed in commercial real estate, it's about money or pride and it's probably both. Right. But that interest to me became like a weakness for them because they needed to, to what's next, right? This was the biggest conversion they'll do. There was this new market that was exploding. And so that interest to me becomes a dependency. So I knew that, that the buyer was gonna perform, but they were very sophisticated and they were very, very tough, very defensive, but they knew because they were the only ones that could make this hotel work.
Cause that was the highest of best use. And the seller just wanted the right price. Right. But he wanted to do it on his terms in regards to options in this. You know, again, the, the options will derive from the interest. So if the interest is that the buyer closes in a timely manner, he's really saying like, “Hey, you need to be deliberate and you need to move. I don't wanna get entangled in this process and be exposed.” So, you know, the options, the biggest one was making sure that the timeline was set, “Hey, after you offer, you need, you have X amount of days to submit to the city for approval, for conversion.” Right. So that's simple. Right. And keep that timeline deliberate. But the buyers options are like, well, yeah, I could do that, but I don't wanna be restricted by time.
I want it more timelier. Cause in timeline, it's either based on events or time. And, and in this case, there's, there's so much risk involved. Um, because you don't know what's gonna be expected by the city and by the other, at spirits, in the deal. So in creating that option, you need to have legitimacy in offering that. And the only way you're have legitimacy is you've done the due diligence in the city's processes. Right. And you can make those educated assumptions so that you could advise accordingly, you'd be like, “Hey sir, this option on average takes this long, but since the zoning is permitted, you know, it should go faster” or whatever. Right. So you, you need a deep dive into the legitimacy of that option to show them that, Hey, it satisfies both. Right. So that was, that was huge.
Because it's funny that the seven-element preparation tool is all touching each other, right. Alternative. Like in this case, there really wasn't much alternative because the seller pretty much said, if we don't close with this buyer, we're done. Like, there is no, I don't want to go to market. So imagine the tension, right. There's only one chance. And so the alternatives is pretty straightforward. Either buy or get off the pot, but, you know, and understanding their BATNA, the seller's BATNA is just continuing their operation. But he had other interest in mind that I think kind of depreciated that BATNA. Because he could take that money and do something else. The buyer's bat, like I said, was they really wanted a property because it was a trophy. It was a trophy deal. And to walk away...
They didn't even have a BATNA because they can go back and they'll probably miss this unicorn. It, it won't come back on the market. So really, I think the BATNA was in the favor of the seller. He had something that the buyer wanted. He wasn't that motivated unless he got the price in terms he wanted. That was really interesting because that leads into threats, which I'll get into right now. It's because who's BATNA is the strongest because when it comes down to a threat, it, it better be, it better be strong enough to defend it. And there was an emotional time in the contract where, it was like August of this year and we got response back from the city and the city said, “Hey, this looks great. It's in the zoning.” There's a couple of notes from all the departments, right?
Like the fire department, the utilities department. Right. But there was one note where the parks and recreation, remember we're in Colorado Springs, America's backyard. So they are very focused on land, right. So when there's a new development coming in, regardless if it's an existing structure, the city wants land to be preserved. So if you're gonna add more units, more stationary units, permanent units, they want you to add more land. So they literally said, Hey, you're either gonna provide seven acres, or you're gonna provide $700,000 in lieu of that regulation. And that was, that was, that was gonna destroy the deal because all of a sudden, you got almost a million dollar bill for, for something you can't even produce. You can't even buy $700,000 worth of land because it's not available and there's no land. You would have to literally assemble it in.
And so, and at that same time, right when I'm supposed to be there, I get COVID and I literally, literally am dying. Oh, I'm not joking. I recorded the entire experience from the, the, from the story I told you from the beginning to where we are right now. Because I couldn't believe this was happening in my life. Right. And I got COVID, I couldn't even, literally I was one month, almost two months, literally dead onto the bed. I was on oxygen. I was taking everything, steroids, antibiotics, you name it. I literally thought I was gonna die. I mean, Lana can attest to that. It's no joke. And because of the relationship I formed with the seller, and remember he was a Christian man, and he was a loyal guy. He called me and he goes, let me pray over you.
And I don't know if he'll ever listen to this, but, um, I'll never forget that. And it just shows that, like, in the question you guys asked me, like, what's most, most important in all this it's really relationships are and legitimacy. And he goes, I would pray over me. He prayed over me. He's like, “Hey, Brian, I'm gonna make sure we get this to the table, like, get this to close.” And I'm like, this guy's working for me now. Right. You know? And so I'll never forget that. And I love that man. I admire that man, because he didn't have to do that. But again, he still wanted to still cuz he probably had bigger interest and he was, you know, just happy of everything I'd done. Right. They negotiated, they came to concessions to how to pay that 700 and we moved on.
And so after that, just getting to the finish line. And so yeah, I mean there, you know, there was a lot of commitments in this, right. You know, the contract itself, right. We did the Colorado real estate contract because we're operating in Colorado, but they can add provisions to it. And they can add amendments to it where they just put another lawyer in and a lawyer will draft like 35 pages that just further illustrates the terms. So there was commitments there. The big thing in commercial real estate and commitments is that there needs to be a gradual earnest money, a gradual equitable interest that keeps going up. Um, the, because you know, you gotta pay to play. And so like right on contract, you know, they deliver, I think it was $25,000 non-refundable and then immediately it just goes up and up and up to where, I mean, you're getting to quarter maybe even half a million dollars or you're not even including the due diligence that you have to do during the contract.
So there's commitments there. You wanna show the seller like you are performing and the buyer and, and, and you, and the buyer needs to demonstrate that right. To sh to actually get to seeing if this was even the, the right choice. And you know, I mean, you sprinkle literally communication along the whole, the whole chain because you're literally communicating the relationship, communicating your legitimacy, communicating your alternatives, options and interests. But yeah, I mean, I, I could talk all day and I don't, I don't want this to be too long because, uh, I wanna hear, you know, your questions. You guys probably have plenty of questions, but hopefully that helps. Yeah.
AD : Oh, Brian it's yeah. It's a wonder it's no, it's, it's really wonderful. So when did this all come to a conclusion it's just, just in the last month or so, is that right?
BR : Yeah. Yeah. 30 December.
AD : Fantastic. Well, well, well, well done. And what a great analysis. I'm gonna encourage you to continue writing it up. If you recorded it up to the point where you got COVID, you should write the rest of it up, you've got the, you've got the basis of whether it's a great article or it's a book, um, as, as long as you and Lana have been doing this now, I'd expect to see a book coming out from the two of you at some point. Well, Nolan and I would be very happy to, to grab that and read that. So many wonderful lessons learned there.
NM : Hey Brian, that was an awesome story, man. Real really appreciate it. I mean, incredible work for you and the team. Great job all around. I'm glad to, to hear about your success, you know, it, it's really awesome. And, and thinking about how negotiations really played a role in that success. I mean, it's even better. What I wanted to ask you now is kind of what's next for you and, um, and make sure that you let, let the listeners know whoever has 25 million to go buy a hotel where they need to find you and get in touch with you. So
BR : Yeah, I mean, you know, what's next. I would say like, I can't stop. I have this desperation to continue giving back. Cause that's one of the things like life is so short where it's like, you know, what do you do after this? Like what do you do after a big sale like this, right? And the only way is to really get back and you get back to the world, I'm telling you, it comes back like tenfold. And so I'm gonna continue that. I'm going to continue adding that you to the Colorado Springs landscape, now through commercial. My wife and I are pretty confident that we're already doing that in residential, here in the city, but you know, commercial is where you really change the landscape, right? Retail, restaurants, hospitality, service industry, office, right. That's where you change, like the dynamic of a city.
Keep giving back, like you know, Aram you talked about, you should write a book. So I'd just been writing all my experiences down and I, I call it sales of service. Um, and it's like a military application, right. Because when I was getting out, there was no like handbook to get into real estate. Right. And, but I'm like, we're so valuable because of just the investment the army gave. So I'm just taking that application from great leaders like yourself, who taught me negotiations and applying that. And then, you know, keep leveraging the network and, and adding value to our West Point network. I believe that, you know, we are gonna change the world through real estate and it be by West Pointers and yeah, that's biased, but I think every professional should have that. They should have some sort of Alma mater, some sort of tribe that, that they believe is gonna change the world. So that's definitely, definitely what I'm gonna do next.
NM : That's awesome, man. This is a podcast that is all about taking action to really help of your influence through purposeful negotiations. And I think one of the key takeaways that I have from listening to you today, Brian was when he had talked about the importance of the relationship and the legitimacy and working these extended deals. You know, I think that for you to have built a relationship so that the seller is now on your team after already finding the buyer, I mean, that's pretty, pretty powerful. So I'll definitely take that as something that, you know, I can always improve on is building that relationship even stronger to be more effective negotiator. And so I'll turn it over to Aram to see what kind of takeaways you had.
AD : Yeah, there there's so many Nolan and I just encourage listeners to go back through whether or not you're involved in real estate. There are lessons that Brian shared today that apply in every aspect of life, everywhere, where you're trying to negotiate or influence with folks. If you are, you know, looking for an agent, I love Brian, what you shared about the, the importance of consistency and delivering that, the importance of being refreshing along the path, reminding people of their end state, the discipline with an endurance and folks, if, if you're looking for a real agent, I think those are things you wanna look for. Somebody's gonna represent you. Those are very valuable qualities to have that somebody who's gonna represent. You negotiate on your behalf, on your behalf, understand your interest and take the time. And again, there's so many other things I feel like I could go to the communication sprinkled throughout the process. You described the ability to listen really well, to understand, uh, interest, get creative, just so much Brian. And, uh, you know, you said, and I'm gonna pass this back to Nolan a second, but you, you said, you know, you, you, you feel strong about delivering, um, as much enthusiasm as you can, every interaction I have with you, you do that, you certainly have today. And, and just thanks again for taking the time to be on the show with us greatly appreciate it.
NM : Yeah, absolutely. Thanks for joining us, Brian. We really appreciate it and appreciate everybody listening. You can catch us in the next episode.
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