Transcript of Why Preparation Is the Most Undervalued Skill in Sales Negotiation (And How to Use It)

Most people walk into a negotiation thinking the goal is to win. They prep their numbers, they sharpen their pitch, and they walk in ready to take. That is exactly why they leave the table empty. Today's guest has done what most operators only talk about. Walker Thrash has closed public, private real estate deals that others could not figure out on their own. He doesn't just build buildings, he He solves problems by mastering the one thing every negotiator avoids: self-interest. Not yours, everyone's. On this episode, Walker breaks down how the best deals are never about price, why the most dangerous assumption you can make is walking in thinking you already know what the other side wants, and how the operators who close the biggest rooms are the ones who learn to look in the mirror first. Let's unlock it.

We are live today. We got Walker Thrash, the real estate negotiator, the tycoon. I'm happy to have you on the show. I'm excited to deep dive into obviously your experience in real estate, but really unlocking, when we talk about unlocking the vault, unlocking those things that must happen or that must be implemented or employed when it comes to real estate deals and real estate negotiation. Walker, welcome to the show.

Happy to be here. Thanks, Kevon. Yeah, this will be fun.

Just so the audience knows a little bit more about you, why don't you explain a little bit, tell us a little bit of who you are and how you got into this role.

Sure. So my company is called Vertikal, spelled with a K, but we are really— we're a public-private partnering firm. So our emphasis is all real estate transactions, real estate development. But we really, you know, we don't just build buildings. Our intention when we, when we walk into the room is really trying to solve either a city or at the state level, solve a development problem. We specialize in— I would say if you boil it down, ultimately we try to place risk on the correct sides of the table. And then what sets us apart a little bit from a lot of people that, you know, kind of quote unquote consult in the public-private realm is in almost every project we actually invest all or most of the private capital that goes into the private side of the development.

Okay. And how did you tell us the history? How did you get to this point? Because I don't think you just wake up and just start obviously investing and becoming the tycoon of negotiation when it comes to real estate. So, tell us a little bit of the history here.

No, my family, my grandfather was involved and both grandfathers in the lumber business. My father, very involved in real estate, mainly in apartments. Um, so I kind of grew up around real estate, right? Real estate deals, talking through that. Um, for years spent time in my family business with my father and younger brother, but really started to have somewhat of a passion for hotel development, hospitality. We've ended up forming a small brand. It was part of the group that's formed a small hotel brand that's in 6 or 7 states at this point. Um, and what you learn in putting together hospitality projects— because these hotels were full service, had restaurants in the bottom— is that financially a lot of hotels have some kind of public incentive to make them work. So somewhat cut my teeth putting hotel deals together, learning the public-private nuances, where those buckets of capital were, and really I'd say more importantly learning how to to navigate the public side of negotiating real estate deals.

Interesting. Okay, so we're— the navigation on the public side, tell me a little bit more about that.

Well, I, and I think this is true in private deals as well, but it's highlighted when you're dealing with the public realm because, to simplify, it's no one at the table is at their personal checking account on, right? When you're in a, when you're in a public arrangement, these are hired people, either it's city or elected, right? City manager, mayor, um, city staff, state staff. They're trying to put a deal together. Their number one objective is to execute and deliver on whatever promise they've made. So, okay, what you don't see in the forefront, or what I would say is really the, the tripping hazard in a deal, is to make it all about dollars and cents and price, because that's just a commodity in the deal. Um, it's really more about execution, delivering on vision, aligning the party's interest and understanding. And the more deals you do in the public-private realm, the more you somewhat kind of understand, um, the intentions and motivations of the different factions or parties around the table.

Well, it's interesting you say that because we're talking about, I know we're talking about big real estate deals, but that just goes to everything, even to the smallest little deal. People will buy not because the price is wrong or too high, it's because they don't see the value. And what you kind of just indirectly said there is if you can execute their vision, execute the speed, the time, so if they see the value, in what you're doing, the price is never an issue.

Yeah, and prices— I don't want to pretend like price isn't important, right? It's, it's real estate. It is, um, it's going to be the, the capital that trades hands, but it's almost never the most important thing in the negotiation. Like you said, it isn't— value and money are not equal. There's a lot of different value that can be traded around the table that has nothing to do with dollars. But I would even put it in the sense of if you just kind of set aside— like, you may not, you may not think this way. I do. I'm a believer everyone is self-interested, myself included.

Yeah, absolutely.

I don't— that's not a negative thing. I say this all the time. I mean, that feels like a negative comment. The reality is we're all just trying to make it. We're taking care of our families. We're trying to reach the next step, next rung on the ladder, whatever that is. If you can walk into the room and understand that everybody around the table is the same as you, they have their own self-interest, and your objective at some level is to deliver their interest in a way that creates the value you need in the deal, it's a better starting point. To pretend like you're the only one who really needs to have your interest met is— again, that's just a— that's a stumbling block we all need to get past quickly.

I couldn't agree more. I mean, correct me if I'm wrong. I haven't done a lot of studying of negotiation and all that, but the one thing I remember an old mentor said, the best negotiation is when both people are leaving almost not just satisfied. They're not happy. They're not ecstatic. They're almost like— he made it seem like it was almost like they're leaving okay. Because if you're leaving, he said, if you're leaving happy, that means they're leaving upset and that's not a good negotiation. If you're leaving upset, they're leaving happy, that's not a negotiation. A good negotiation is when both parties can leave on, you know, with a neutral kind of feeling. And I always thought about that.

I agree with that. I would agree with that. And that's a really good negotiation. And oftentimes that's the best it's going to be. If you add one thing on top of it, a great negotiation is when the parties leave the table and they feel like they created more value than they thought coming in. And hey, those are the best deals you'll ever do.

That, I love that. I love what you just said there. The best negotiations are when not one, when both parties provide more value than they thought, than they thought they were getting into. Tell me about that. Tell me, are there a, I want to unpack that because I think that's so important because that can be translated through so many different things in life. It's how, you know, the whole campsite kind of theory, right? Leave the campsite better than when you last found it. It's the same thing here to me is like, leave the negotiation better off, more value, more excitement, more output than what everyone thought it was. So tell me a little bit, how do you get to that place in negotiation? How do you find that place when in negotiation to look for those things of value?

Well, what I'd say is over time you do gain experience, you learn the questions to ask, right? But just in starting off, if you're fresh and you say, hey, what's just a way to change the mindset? And I've been guilty of this as much as anybody is walking into the meeting and assuming I understand what everybody's interests are and I've got a great idea and we're all going to agree on it. And if you kind of turn that 180 It's, hey, instead of talking about the deal, here's my pro forma, or whatever that is, open up a conversation asking questions, assuming you have no idea what their interests are when you open the room. You'll end up teasing out things that you didn't think were there. And then, you know, and everybody's in such a hurry, it's like, let's get it all done in meeting one. Sometimes meeting one really is just uncovering, turning over rocks. Trying to get information you can take home and think about. But, but in that question asking, and if it's genuine, there is an appreciation around the table. You'll see that, you know, those questions will come back to you, but the other party really sees and appreciates the fact that, hey, you're trying to understand what they need and want.

That is, that's just a much more open dialog.

Sounds like Sales 101 to me. Ask the questions first before you speak. Learn, like, really try diagnose, like try to like figure out what is going on, what do they need, what's, you know, what does success look like? All of the things before you start projecting, like I say, projecting your own opinions, your own facts, your own BS onto the prospect.

Yeah. I mean, you know, the more you quote unquote, no going in and want to teach everybody in the room. I mean, the worse off you are, right? You're not getting their idea, especially you're going to frustrate whoever in the room has the biggest ego. And those are, those are real, like, dynamics around a table. Um, but I— if you talk about asking questions, this is one thing I have seen a lot. I think we all We dismiss the generation beneath us, and we shouldn't, because there's some tactics that I believe that they actually really good at bringing to the room, um, that you should take note of. And if you find yourself in the room, let's just say you're not the center of attention, you are not getting the questions, you're not, you know, the guy or the woman in the room that, that's fielding everything, and you're trying to figure out how to get that edge and get into the conversation Here's a novel idea: prepare, right? Put together whatever the math is that's going to be on that deal, or if it's the slide deck. If you have information in your hands, it's amazing the direction of the questions will start to flow to you.

You'll get to ask more questions because of that, and all of a sudden you're a, you're a player in the game, you know, and you may not have been. Uh, but if there's If there's a rule beneath all of this, preparing for your negotiation or preparing for your meetings, it may be the most undervalued skill in the game.

Wow. This is super important because you said most undervalued. I mean, to me, maybe I'm too naive or maybe it's just who I am, but I'm thinking, how do you go into a negotiation not prepared? How do you go into a negotiation not having all the facts.

I mean, I just— I'm shocked when I go into meetings and we're busy. I'm going from one meeting to the next. The other 2 or 3 people, 5 people in the meeting are doing the same thing, especially now. I mean, you're going from a Teams call to in-person meeting, trying to grab a bite to eat in between. I see it all the time. I mean, everyone in the room walks in and says, all right, what are we talking about today?

Wow. Yeah.

And if you're holding the singular parts of information, the questions do get, you know, they start to be directed to you. You get to then direct questions back. Um, preparation— I don't— I think part of it is that we like, you know, we watch too much TV or our phones. We just, we feel like you got to be smart quick and the quips have to flow. I mean, the best dealmakers and the most authentic dealmakers I know, they just do a lot of preparation.

So preparation, I would assume that's a huge opponent. That's not surprising me. So I'm just kind of writing these things down as we're going because I'm just thinking about, hey, how can I extract the process of the art of the negotiation? And one of the ones that I'm hearing is for sure, without a doubt, you need preparation. So if we talked about preparation, because now I'm going, thinking about, okay, how deep are we talking about? What level of preparation are we saying here? Are we talking about knowing the the, the surface level stuff, or are we talking about going deep and knowing not just the surface stuff about the deals but knowing about who you're playing, the preparation of the player, what they like, what they eat, where they live, all those things?

I look, I think there's a little bit of both, uh, but I would say this, there's a— I would caution one thing. It's just like I said, I don't— I never think it's a great idea to walk into the meeting with everything figured out. It's also the preparation is different as you progress through, you know, a longer negotiation. Some of the deals we work on take a year, right? Yeah, 18 months. Um, so, you know, you may have several meetings, but let's just— let's put it in— let's drill it down into something tight. So let's say it's a land deal. You may walk into the first meeting It would be helpful to know all the comp sales in the area, um, what the zoning is, like some very baseline things. And I know, you know, half the people listening are thinking, well, obviously you would. I can't tell you how many meetings I've walked into where that information wasn't there, you know, and something that baseline. Um, but when you— when someone has the information, like I said, they become a critical part of the conversation. They get to ask more questions. I think the power is in the people that get to ask the most questions in the room.

Well, they say, right, the loudest one in the room isn't the, isn't the strongest, the weakest, right? And the strongest one in the room isn't the one that has all the answers, is the one who asks the right questions.

Yeah. And, and the quantity of questions matter. You ask enough, you'll ask some good ones. Yeah, yeah, absolutely. But it is helpful. I mean, Again, at a baseline, preparedness critical. But I think once you're prepared, being able to speak from your authority is a skill, and it's a— it's something you should contemplate before you walk into a meeting. Because give me any business situation, the authority shifts, and you may have a different authority in a different situation. Um, but you know, if it's real estate related and I walk in and let's just— I will do like comparable sales. If there's an appraiser in the room, he or she is the authority on value, right? Um, I then may speak from a different angle, and my authority in the room is historical knowledge of deals that have happened in the area. right? But, but understanding— and everyone has an authority. I mean, the lowest ranking member around that table knows something at a higher degree or at a better level or in more detail than the rest of the people in the room. You need to think about that before you have, you know, a prolonged, protracted negotiation.

It's important.

I'm loving it because like now I'm seeing it right in here is like, okay, preparation. 2, asking the questions, and you can only ask the questions if you have the preparation. Number 3 here, it's really, it's about— I put knowing your audience, but really knowing your authority, knowing what the authority is in the room, who's in the room, and where they kind of lay in the authority hierarchy.

Absolutely. Okay. Because even if you walk into a room with somebody you admire, like they are just far beyond where you are in your, you know, point in life. You know something around that deal at a more granular level than they do. And it may be understanding that authority is born from your preparedness, and you understand some of the nuances of the math or, or the research that's been done. You can create that authority, like I said, by being prepared. And then as you speak from it, you will start to gain a little more traction in the meeting. And like I said, questions start to flow to you as well. This is— it's nuanced, but I've just seen it play out over and over again. And it doesn't matter what your title is.

What would you say some of the, uh, some of the reasons or some of the things that stick out to you when you think about all the negotiations you've done that have stopped deals right in their tracks, that like taking deals right off course and assuming interest and being misaligned with where you're trying to take the deal is a great way to get one off the tracks.

By that I mean you think it's all about this then it's really about that. And you failed to really take the time to tease that out on the front end. And I mean, we've all been guilty of that where I, I'm like, here's the carrot, this is going to be the one that really moves the deal forward. And you just realize it's never been about what you thought it was day one. Happens a lot.

Is that as simple as just asking in a negotiation, a conversation, and just saying whether it's the beginning, the middle, or even near the end, is What does success look like here for you?

Yeah, okay, it's— that's, that's— I think there's 20 ways you could do that. Um, but in— if you were gonna figure it out in a maybe a few questions, I'm trying to just arm a listener with, okay, let's, let's keep it tight, simple. What do you need in the deal? And that can be a question that's also a question you need to ask yourself. What do you need? What would you love to see happen in this deal, which is different than what you need? And again, I think these are more important asked of the other party than asked of yourself, but you need, you need to understand both sides of that. And then this is the one I think people don't ask themselves enough, what doesn't matter to you at all? And that is— that's also an important one.

What doesn't matter to you?

Yeah, we assume everything matters. And so often there are deal points that are on the table that they're like, I don't care about that, but you find value in it. And the, the Really, the nuance there is trading value. It's not all about dollars and cents. And understanding what's not important to them is one way to start to figure out where you might be able to capture value and then push value back to them for what is important.

Well, I like it because by understanding what's not value to them is getting you closer to the one thing that is valuable to them. And they might be holding their poker cards close to their chest where they're not going to tell you what's the most value to them. So, it's an indirect way of getting to there, I would assume.

Yeah. And in large deals, I've seen a lot. You talk about what kills deals. I love to talk about things in the negative. Again, I'm a big offender, have been in my career on this one, holding the cards too close to the vest in a long drawn-out negotiation, or in a, you know, a higher-stakes negotiation, oftentimes you do it to your own detriment. And one of the, one of the ways I've seen that happen is price is such a sensitive subject, you know. Once you get there, it's always, you know, everybody tenses up and says, what are you willing to pay? What is that? Um, when it's not, uh, you know, I'll give you my— where I think you can take the tension out of the conversation is to make your math objective. And the way I, you know, the way I've seen to do that in real estate is, here's, here's how I'm underwriting this deal, and here's my gap, right? Let's not make this about a secret that I've got like tucked away in the closet. Here it is. Let's figure out if we can solve this problem. And when you bring the other side around to helping you solve the problem that you see, I just see that's a much more successful path.

It's interesting because people get tense. You said around price, and I was going to say, well, really, is that true? Is that true or not? And then I was thinking it's probably because we, you know, you read in the books, the person who says the price first loses, right? And you think about that and it's true. I mean, the science shows that, but there's a way to, there's a way in discovery, I believe, to figure out what the price range is so that price isn't, has to be, or needs to be such a shocking thing.

Agreed. And, and that's what I say. I try to make that, I try to make math objective. Now to do that, you can't be overly greedy. You know, there, it has to have a sense of reasonableness. To the discussion. But it is subjective. It will always be subjective to say, this is what I'm willing to make, or this is what I'm willing to pay, or this is the gap that I'm willing to close. That is inarguably a subjective thing, right? Even if you use some metric that's reasonable, you are deciding what that gap is or what you're willing to pay. But when you lay it out on the table it really becomes an objective criteria of the deal. It's like, okay, well, Walker's willing to do this, uh, when it comes to price. Maybe we can trade some value around that and that price actually adjusts. You have to be malleable there because once you lay that on the table, you need to be confident that you did that correctly because now it's out in the open. But, um, I just find that's— I don't like to hold them close to the vest because I feel like the other party actually will help you solve the problem better if they feel like you're being open with them.

So what are the things you've seen then when deals have made deals go quicker or the deals that you can think about were the most smoothest? What were the main factors or the 2 or 3 things that have to be in a deal for it to move fast, efficient, effective, and everybody happy?

All right, there's, there's one rule from the book that— and I believe this into my core— is that good deals become, you know, good, good ideas become great ideas when you gift them to other people. And for a deal to go smoothly, then really I feel like to be efficient in the process, when you can do what we were just talking about, when you can make the math objective, or you can be open in conversation and you've asked enough questions and you feel like the parties are somewhat in the same stratosphere, asking for help from the other side and having them be a thought partner on how you solve this gap— that is such a— when it's, when it's employed or deployed directly and the other side buys into that idea that you are genuinely asking for their help because you're trying to solve for this equation, the deals can take off.

That kind of goes to the 'he who plans the battle doesn't battle the plan' a little bit.

Yeah, absolutely. I mean, yeah, you know, how many ideas that you had did you think were great? Several, I'm sure. So, so does the other person across the table. Yeah. When all of a sudden the help becomes part of their idea, how you're getting there, they're, they're creating with you. I just find that the deals flow a lot more smoothly and quickly. I love it.

And, uh, and the deals that you're in right now— are you in deals right now?

Oh yeah, I mean, we try to stay active.

You're staying active. What, what deals that are coming up for you right now that we can learn from that are that are maybe finding— you're finding challenges in and how you're being creative to work around them, or deals that are smooth, that are going so fast, so like quickly, and you can go, that was because of this one thing.

Um, okay, so I give you an example right now. It's a deal in Colorado where there's a city— there's city funding, state funding, there's also tax increment financing. It's just a complicated math deal, but ultimately it involves a big bus terminal, two office buildings, and some raw real estate. So it's a mixed-use project, a little bit of retail, um, and there's some users already at play. Well, where the value is getting created from both sides is that as a standalone private deal, it doesn't make sense. And as a standalone public deal, it's not sexy enough to attract the tenants, you know, if you really just want to call it what it is. And so we are creating some development fees at the private level that actually help to develop some of the public infrastructure. Now, the only reason I say that is not because I don't want to get in the weeds on that, This gets boring, but the reason I say that is we didn't go into that deal assuming that that would be a structure we were looking at. Mm-hmm. But what we found in asking questions is that was the, that was the biggest issue for the city to be able to get the project off the ground was the timing and being able to put that infrastructure in.

And so we, we just figured out a solve between us, but that would absolutely not be possible if we weren't sharing our information, if it wasn't an objective conversation about how are we as a team going to put this deal together.

Yeah, I, I love it because it, it really goes back to what you were saying in the beginning of this conversation, and I, and I just wrote around is it's— again, we know this too, right? What happens with that assume, right? Makes an ass out of you and me, right? And it's so true. So, what I'm hearing right now, people are following along like I'm following along because I'm always looking for the process. I'm always looking for the steps. Preparation is everything. You want to make sure that you are fully prepared. And you and I sat there and thought, you know, even me, I was like, how are people not prepared? But the reality is, is people are coming into negotiations or coming into meetings or coming into the fight unprepared. That's a sure way to lose. Let's just say that. I can't guarantee you, you'll be successful if you're not prepared. I can guarantee you won't be successful by not being prepared, right? So preparation is what I heard, number 1. Are you prepared? Number 2 is, are you ready to ask questions? Those who are prepared can ask the right questions. 3, which I love, which is you got to know your authority.

Know who's in the room, know who has the power, where that power is, and how you're going to flow the power either through or to, or from that authority figure, but don't ever, ever lose the idea of who's in control right now. And then we move to what I love was the opposite. Instead of asking, "What is it you want?" We're looking at the negative almost and going, "What is it you don't want?" Let's get what you don't want off the table first 'cause that's just gonna get us closer to what you do want. And then from there, we have enough knowledge that we can make, which I love, is make the math objective.

Yeah, that is— that's just a major one. And the bigger the math is, the more major that that becomes.

The bigger the math, the bigger, the bigger the ability to make it objective. And the impact of what that objective math can do will dictate a good negotiation. And then I love this. And once you've done this, and if you're not, it sounds like at that level, if you're still at a standstill or there's still things you're having a hard time figuring out, you put the other side in the thought leadership as a thought partner. You ask them, well, what do you think we should do? Which is getting them involved because those who battle the plan don't battle. So those who battle, who plan the battle, don't battle the plan. And then what I've wrote here, big star, Never once through the preparation, through asking the questions, through knowing the authority, through knowing when they're telling you what they don't want, when you're making the math objective, probably big time here, and when you're asking for the help, never ever just assume anything in any negotiation.

Yeah. I mean, you've wrapped it up. You could write those rules 10 different times, you'll have commonalities.

Yeah. I mean, well, there it is. If people are listening, I mean, there it is. For me, that's the basic, like to me, that's basic negotiation. Here's what I'd say. Is it going to make you the richest person in the world? No, but guess what? That alone, I guarantee you will make negotiations a lot easier, a lot better, a lot more efficient.

Absolutely. And look, you do one extra, you get to one extra deal in a year, makes a major difference. Right. Yeah, yeah. I mean, we're always trying to be efficient with our time. And I mean, I drill back to on the prepared side, you know, next time you walk into a meeting, just think about how many people really are unprepared. It'll shock you.

Yeah, no, I'm going to be looking at that. I was thinking about the meeting this morning where I was in a meeting. Nobody— we were— it was a negotiation, but nobody was prepared. What wasted colossal time. Was a waste of colossal time. So Imagine walking in a negotiation and I'm having that feeling, like what a way to start negotiation. For those of them who are listening, they want to learn more, they want to learn where they can get your book, be able to take what I just did and get the more nuance of it, where can they go?

Yeah. I mean, Amazon, Barnes Noble, all the online channels, bookstores in several areas, especially regional in Colorado, But I'm mildly active on LinkedIn. But if there's any of the listeners have a real estate public-private deal, they can always find us online. It's VerticalCo.com.

And we'll make sure we have those in the show notes. So again, Walker, thank you so much for being here. If we're going to leave the audience with one thing, one tactic, one last comment, statement that sits behind our vault when it comes to negotiations, when it comes to getting them through the finish line and/or getting them back on track? What's something you can leave us with?

Look in the mirror, see that you are at your core self-interested, and then understand so is the person across the table. So just a good way to start.

Look in the mirror and see that you are self-interested and the same person you're speaking to is self-interested. I love it.

It's just a fact.

Basics, but facts. Everyone is in it for themselves. Hate to say it, but it's true. We're going to leave it there. Again, thank you. If anyone wants to learn more, they can always to the show notes and get, uh, the links to, uh, where they can find you. Thanks so much for being here.

Perfect. Thanks, Kevon. Enjoyed it.