Acquisitions and Negotiations with Richard Montaño, CEO of LIV Capital Group – Part 2

This is part 2, click here to read part 1. This interview has been edited for clarity.

“Something that I learned in high school… be careful of who you associate yourself with, because you’ll be judged by who those people are.

“I have realized the value of that statement even as an adult in the real estate profession… the people who I work with and who I negotiate with matter a great deal, have to be able to walk away because of people.

“They’ll change their mind, won’t be clear, and they’ll create problems.

“Those people will make it very hard for you, so you have to be able to walk away.

“It takes confidence and it takes the gut, because you don’t want to walk away and have regrets. I can say that from experience – [working with difficult people] can really exhaust you emotionally; it can infect your other areas of life.

“Real estate has a lot of people who are really tough to work with, like they’ve gotten away with bad behavior too many times.

“Most people are good people. Some of the larger players that you come across, not so much… I wouldn’t say it’s a shark tank, though.

“We have always been really conscious of near-term changes, we try to stay aware of price changes, supply and demand in general while we’re looking ahead, looking at the market, at political cycles, looking at affordability and see if in the near term it will go up and go down, and how we can protect our prices.

“Declining or inclining markets [are not ideal]. We love a stable, predictable linear market.  When you have big swings with government influences, or a wildfire, or massive catastrophes that hit the market [it makes prediction impossible]. Absent those [factors], we can predict the market out in about 6 months in advance.

“We have been doing group investment for quite some time, and it started by accident. My wife and I were buying investments for ourselves, and we didn’t have enough cash… We were trying to pay cash for properties, and we basically put together some friends and family to do some deals.

“Then more people wanted to get involved, and now it’s grown into this business model… we haven’t technically used a crowd funding method yet, per se… we have done a lot bringing in investors and staying in compliance.

“There are tons of regulations, so we focus on the clear investors because it’s easy to operate well w them, under Regulation D. There are a few methods within that, certain number of investors, capped in my case at $5M, with up to 35 unaccredited investors but they have to be astute to investing, and complete a questionnaire.

“Crowd funding under the Jobs Act is really new, that was in the fall of last year, about 30 new websites started in the fall of 2013, they are focused on the exact definition of that model, we haven’t done that quite yet.

“It’s important to remember: You can always lose this.

“I do my due diligence, I keep great track of things, but there is always that risk… if you want to do something in the community, everybody has to be willing to admit that one person might not make it. But a thousand dollars might help a neighbor to grow his business.

“We only focus on San Diego.

“We always preach to our different investors that we are focused on improving our community. That’s an important piece that is on top of the financial decision that they’re making… they can drive by and point at it and say that they were a part of it… even if it’s only 1.5% of it, they were a part of it.

“Everyone approaches this thing as if it’s about taking the money out of a savings account, then they get in it and realize that so much more comes out of it… I can’t tell you how many times that people have come up and thanked me. I tell my subs when they’re at jobs, put their signs up, because if you can get more business out of it, it’s awesome. Anyway we can help out the little guy is good.

“There are a couple things that I don’t want to share, but I do have a couple of tricks of the trade that would be good.

“I think just being honest with yourself and paying attention to the market while identifying your goals [matters a lot].

“When the market says the price is different, you have to be realistic with the value. You also have to understand the supply and demand… if you’re going in as the seller knowing that there is a lot of demand, you can be aggressive, but… If you take it too far, you’ll cut your nose off.

“Same as the buyer: you must be aware of the value before you approach the negotiation table. It’s very important for you to know your trigger point [so you can say:] ‘absolutely, I’ll sign the paper if you put that price down’, and still know  when to walk away.

“At an auction, I could be bidding with someone else, that person might buy it for $100 more, but I have to be ok with walking away.

“Your due diligence, understanding of different scenarios, should all be done before you get to writing an offer.

“In all of the deals of our group investing, I invest in every single one of those deals. I don’t expect my investors to invest in something where I wouldn’t put my money.

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About reibrain

Hey, my name is Trevor and I'm the founder of The REI Brain and editor/contributor. I started investing in real es.tate when I was 21... and love entrepreneurship, the internet, and real estate. My main focus today is growing my companies, systemizing my businesses so I can work less and make more, and spend more time with my family. Learn more about me at

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