Day 2-30 Day Quick Start Challenge…July 2, 2017

Well, Mister Murphy returned today!

I had all intentions on conducting another search finding new telephone numbers and getting some pictures in.

Murphy made his appearance in he form of a family friend visiting at 11 and another at 2 both staying several hours each.

So much for “the best-laid plans, of mice and men often go awry”.

Stop back tomorrow…

Day 1-30 Day Quick Start Challenge…July 1, 2017

Well true to form Mr. Murphy has made an appearance today. I woke up thinking that I would have the a productive day…Hah!

I was greeted by a flat tire on my truck…the one I use to drive for research, and I guess I should have thought this out better starting a challenge on a holiday weekend…what was I thinking.

But, on the bright side I managed to research 54 properties in a zip code that I had no previously worked. All I need to do is get pictures for the Secret Weapon Letters and find the phone numbers for the ultimate owners. I always recommend shooting for the “C-level” CEO, COO, CIO or President.

When you get a “C-Level” executive on the phone you will either get a quick “no” and can move on or they will direct you to a member of the staff that can help you. When they do that is like having a red-carpet rolled right from the “C-Level” office to your contact with all the benefits that go along with it.

I want to share another concept with you quickly…it’s the “Hierarchy of Activity”

Here’s how it works…if you’re not at the top of the pyramid you had better be doing something that will get you there…and quick.

So, since this challenge is about a “quick start” and I am beginning as if I were brand new in the business I started at the bottom…Research.

I need to quickly identify property in my market area that meets my requirements. First, it has to be industrial, it has to be bigger than 10,000 square feet and it has to be located in Broward County Florida.

I put those parameters in IMAPP a search tool found 54 properties in my chosen zip code. I looked up the property record on the county property appraiser’s website to confirm all the information was correct. For those that had corporate ownership I went to the Division of Corporations and looked up the actual “owners” and now all I have left if to get the pictures and numbers.

More about all that later suffice it to say it was a “challenge” to get the research done today…and it should get more exciting in the next day or two…stay tuned.

p.s. if you want a copy of the Hierarchy follow this link…

Hierarchy of Activity

p.p.s. I apologize in advance for any typo’s or grammatical errors…

30 Day Quick Start Challenge!

This blog post started as an idea and an answer to the question “how quickly can a new agent get into commercial real estate?”

So, here what I decided to do. I can’t un-learn 33 going on 34 years’ experience in commercial real estate sales what I can do is start over. What do I mean by that? I am going to start new in a new market and see what I can turn up in just 30 days.

I am going to start from ground “zero” identify the market area, research the properties, find the owners, send out Secret Weapon Letters, do 1st Appointments, Proposals, and 2nd Appointments just like a new agent would.

Additionally, I will do this all myself…no assistant, no mentee, or junior agent. I am also going to do this while juggling my duties as a commercial sales manager, husband, father, and professional dog walker.

I am going to record all my successes, and failures and post all the results on my blog so if you want to follow along you can.

I will keep track of the number of secret weapon letters I send out, how many calls I get, how many calls I make, the number of 1st appointments, proposals, 2nd appointments, and listings I get. I will also keep track of all the buyers I turn up and any transaction that I put together during that time.

I will not include anything that has been “simmering” in the background or that I have a previous relationship with the owner. In other words, all of this is going to be “cold” right out of the market real deal transactions.

I remove anything where my reputation is known so everything will be new, fresh, and above board. Also, to make the context relevant I am starting the “30 Day Quick Start Challenge” July 1, 2017 three days before the 4th of July which falls on a Tuesday this year.

Stay tuned this is either going to be a huge success or a painful learning experience!

Getting Past No…book review

A woodsman was once asked, “What would you do if you had just five minutes to chop down a tree?” He answered, “I would spend the first two and a half minutes sharpening my axe.”

A few months ago, I mentioned that I was going to be periodically reading and “rating” books that I thought other business people might find useful.

In addition to the list I published a while ago (The Seven Books That Made Me Millions) I like to read books that I think are going to help me in my career.

One of the most important things we do in commercial real estate sales and leasing is to negotiate.
Whether you realize it or not you negotiate all the time. You negotiate with you kids, spouse, boss, and finally clients and customers.

In “Getting Past NO” William Ury how you can create win-win situations in almost all negotiations. He goes on to explain how you can get far more accomplished in the negotiation process by simply making it a “collaborative” process instead of the old “winner-take-all” strategy of the past.

He talks about the “5 Barriers to Cooperation” and they can derail a negotiation before it even gets started. He also makes suggestions about how to “stage” the negotiation process so that rather that an “us-versus-them” you can create an atmosphere of collaborative problem solving.

Mr. Ury stresses the need to not let your emotions get the better of you and cause you to say or do things in a negotiation that create barriers to a successful conclusion.

In his book Mr. Ury proposes a five step framework to break down barriers in the negotiation process. His first step he calls “go to the balcony”. Going to the balcony gives you the ability to look at the negotiations from a different perspective. He suggests that this simple step can help you suspend the emotions and allow to respond to the negotiations in a more rational fashion by staying focused on your goals.

The second step in to recognize the other sides negative emotions, fears, or negativity and not to get involved in it. Your mission is to try to defuse their negative emotions so that you can sit side-by-side and attack the subject of the negotiations from problem solving prospective.

Step three is to listen and attempt to understand the opposing party’s perspective and more, to understand their concerns in the negotiation. He goes on to say “Tell me more. Help me understand why you want that” He calls this step “Reframing”.

Ury calls the fourth step “Building them a Golden Bridge”. In other words, create a solution that lets them solve the problem, save face, and have a victory. I have often said that in commercial real estate most Buyers and Sellers are more concerned with getting “their pound of flesh” than the about the actual deal itself.

The fifth and final step is to use power to educate rather than punish. Ury explains how using power in a negotiation is a natural reaction to someone using coercive force against you. The problem with using that positional power is that it can backfire and cause the negotiations to grind to a screeching halt.
The use of positional power can also cause bad feelings and ill-will and makes future negotiations that much more difficult. “Use power to educate…not escalate”

In wrapping up, William Ury takes a unique approach to negotiations in this easy to read book. I recommend that you add it to your library and I can’t wait to read his other book “The Power of a Positive No”

Next…I will be reviewing Fanatical Prospecting by Jeb Blount.

The Sleeping scale of Real Estate Investments

In the 1970’s Professor Burton G. Malkiel published “A Random Walk Down Wall Street” which promulgated his sleeping scale of investments (i.e. Stock, bonds, mutual funds, etc.) and correlated the amount of sleep one could get or lose based on their choices of investments. I have borrowed, “somewhat liberally” from his book and therefore give him full credit.

A relatively new arrival on the scene is the DST (Formerly TIC’s) or Delaware Statutory Trust. Briefly, these are “syndications” that are put together to take advantage of the 1031 Tax Deferred exchange. One benefit of DST’s is they allow the buyer to purchase an asset that may have traditionally been out of reach for an individual investor. Most assets are managed by a “Sponsor” which usually has a good deal of their own money at risk as well as that of the investors. The downside is that there is no defined market for those who want to exit a DST so liquidity is an issue. Another issue is that there are two warring factions in the DST industry, the Real Estate variety which sells as a true deeded interest and a Security version that is sold as shares. Both are real estate based but the fees and loads can vary greatly.

Next on our scale is the single tenant office/industrial property with regional or local credit. Unlike the large national companies the Tenant is not a national player and is therefore presumed to be of a lesser creditworthiness. This does not necessarily mean that they are less valuable as a tenant, it is simply an indicator of resources in the event of a default. There is no corporate headquarters to appeal too, and generally no prominent board of directors to embarrass publicly. The risk is what you see, is exactly what you get. Given the increase in risk associated with a regional or local Tenant you will see an increase in the yield required to entice investors.

The only reason I put medical office buildings lower on my scale is due to the nature of that business (especially since Obama Care, and Trumps threatened repeal). Unlike warehouses most medical space requires a huge, and I do mean HUGE amount of build out. I have seen dental offices cost over $250/sq. ft. and that excludes wallpaper, paint, and all the other niceties. The good news is once you get ’em in, you can’t hardly get ’em out. Doctors and Dentist are loathe to move, unless it is absolutely necessary. The downside is that the space is highly specialized, doctors can be difficult tenants and can be demanding. Fully equipped and built out medical/dental space can be difficult to re-lease and the time on market can be exhausting.

In my opinion Retail Centers are like college football, a whole lot of action and excitement and at any given time there can be a major upset. Retail centers are tied to retail sales, and retail sales are tied to disposable income and consumer attitude. If someone with authority like Janet Yellen (Ben Bernanke was in the early version) whispers the “R” word, consumer attitudes change overnight, bond traders throw themselves out their office windows and retail sales are off for the next quarter. Neighborhood and community centers are more susceptible than regional or super-regional malls because they are dealing with “man or woman on the street” kind of Tenants and generally not the big national Tenants. The challenge is the volatile nature of the retail business in general, think in terms of sit-down restaurants or hair and nail salons. How many seem to come and go on a weekly basis?

Dead last on my list Multi-Family!! Unless you’ve been in a coma for the last three years you are probable aware that there is something of an oversupply of condominiums in the Tri-County market (Again and only 10 years later). Here is my prediction; they are not going to sell quickly! In fact, I’ll even go out on a limb and state, for the record that many will be put back on the market as rental units! You see, people bought these units’ “pre-construction” and knew, absolutely, positively, beyond a reasonable shadow of a doubt they could sell them for a much higher price later. Surprise, markets don’t always expand, prices don’t always rise, and there is not always a “greater fool” waiting to bail out a poor investment. As those units come back on the market they will compete with stock in the marketplace, thus driving down prices and driving up concessions. The only expansion in the Multi-Family market I see in the foreseeable future is in affordable units. The challenge there is finding land at a price point that will allow affordable housing developers an opportunity to make a profit.

In conclusion, I think it’s time to get back to reality, transactions must cash flow, you can’t convert everything to condo’s, and there is not always someone out there who is willing to buy your mistakes at a premium.

Invest in real estate, real estate with positive cash flows, long-term tenants, with the appropriate amount of leverage with a specific goal in mind. Always remember that the one constant in commercial investment real estate is that the market changes…it always does!

You guys…asked for it…Monthly Business Book review!

For about the last 25 years I have been reading at least a book a month if not a book a week. Invariably, I will come into the office and talk about what I just read, learned, or was amused by. The somebody says “Hey can I borrow that” and I’m guessing about 600 copies later I never see it again.

So, what I have decided to do…is read the book, put up a cover, and tell you a little about the subject and how good…or not…it was.

I may even sneak in a link to it on Amazon.

I lieu of giving you a book review at this time I am going to give you a link to 7 of them…I call it the 7 Books that made me millions!

Here is the link

7 Books That Made Me MIllions

Why is your fee so high?

Let me begin by saying that I have managed to survive and even thrive in an unforgiving industry with an attrition rate of well over 90%.

In that time I have taken enough classes, courses, and continuing education programs to earn roughly 3 Ph.D.’s. For years I have maintained a brokers license, mortgage brokers license, and community association managers license.

I was a contributing editor to the pre-licensing class for the State of Florida required program. I have taught thousands of students over the past 30+ years.

I have been a national and regional guest speaker on topics such as valuation, market trends, and the overall real estate economy.

To date I have presided over, brokered, managed, or supervised roughly $1.6 Billion dollars in transactions. I have been a sales manager for at least five different companies and hired, trained, and recruited hundreds of new agents.

I have been certified in property management, advanced 1031 tax deferred exchange techniques, and I have what has been described as the Ph.D of commercial real estate, the CCIM designation (Certified Commercial Investment Member),

I have a best selling book on Amazon and have written dozens of articles on topics as far ranging as the economy, marketing, sales, valuation, negotiation, and safety in commercial real estate.

My company and I maintain an office, research department, marketing staff and all the other infrastructure of a traditional office at a cost of several thousand dollars each and every month.

On average it takes about 12-24 months to develop a relationship of trust and confidence with a prospect. Once that is established, we uncover and clarify a specific need the client has and the real work begins.

Once we have established a need exists, we typically do a proposal or a lease analysis clarifying the need and or where the property positions in the context of today’s real estate market.

That process usually involves finding comparable properties, underwriting, financial analysis, and debt analysis and multi-year projections.

Once we have established an agreed upon price or terms we go to the market. In the case of an investment sale we may access as many as 30 plus websites ranging in cost from free to as much as $650 per month. We may engage in an email broadcast program at an average cost of approximately $145 each.

In the case of a lease, we would use CoStar ($650/ mos.) or LoopNet ($350/mos.) to locate potential properties to meet the clients specific needs. In the event if that a location cannot be identified on those two or more searches we may drive the market targeting specific properties and owners. Depending on the situation it may require using personal relationships developed over a long career to find the correct property.

Once we have identified the right prospect or property we typically will tour the candidates selecting the property that best meets the needs of the client. Typically we will then create an offer in the form of a Letter of Intent to purchase or lease.

That letter will be used to pre-frame the terms and conditions of a proposed purchase and sale or lease. Often this process requires that we create a side-by-side analysis of the financial terms of the transaction. If the transaction is an investment sale, then we will help the buyer obtain the correct financing for that particular transaction.

Once the final agreement has been drafted we will review the document to ensure that the financial terms and conditions have been fully incorporated into the agreement. We may assist the buyer, seller, lessor, lessee or attorney by providing comparable data or even verifying that certain terms and conditions are traditional and customary.

If the transaction is an investment sale we may aid the buyer in the due diligence process by gathering information, ads tracking leases, reconstructing operating statements, and aiding in the packaging for presentation to a lender.

In the case of a lease we may help in permitting, making arrangements for movers, Telcom, cable, utilities, and space planning. We may actually lend a hand in the move itself.

We will review closing statements, closing docs, lease pass throughs, floor plans, site plans, rules and regulations and more.

In the case of of a long-term lease, the owner could be increasing the value of their property by hundreds of thousands of dollars. A long-term credit tenant not only increases value but also provides a long-term steady income for years.

In the event of an investment sale, the owner is generally realizing a substantial profit that could be pyramided into hundreds of thousands if not millions of dollars over a lifetime.   From the buyers prospective they get an annuity, which will continue to build wealth for the investor over the lifetime of that investment.

When I have fulfilled the object of my employment, I get paid once and my payment is usually a small fraction of the value of the lease or sale. I get no residual income over the life of the lease or investment. I don’t profit from a sale in future years, I don’t get periodic increases or renewals and when the transaction is over, I get to start all over again.

I have spent thousands of dollars, hundreds of hours, and countless sleepless nights to develop the requisite skill set to help my clients reach their commercial real estate goals. You wouldn’t negotiate with your cardiologist or attorney when you need their specialized services would you?

Adam Von Romer, CCIM Named To Century 21 Commercial Advisory Board

Adam Von Romer Named To Century 21 Commercial Advisory Board 

Weston, FL– May 17, 2016

Adam P. Von Romer, CCIM, Commercial Sales Manager with CENTURY 21 KoRes was nominated and has accepted a position on the CENTURY 21 Commercial Advisory Board (CAB).

The advisory board is made up of 12 experienced commercial Brokers, Managers, and Agents from various regions around the country in order to give the Commercial Advisory Board a broader diversity of various levels of commercial real estate experience.

“On behalf of the CENTURY 21 corporate team, I want to thank you for accepting this honorable position as a trusted advisor in assisting us in the pursuit of elevating the commercial brand to greater heights,” commented Randy Workman  CIAS, CDPE, Director, Strategic Growth & Operations with CENTURY 21 Commercial. “The Commercial Advisory Board is an important position as a voice and sounding board for the growth of CENTURY 21 Commercial brand.”

Von Romer has more than 30 years of experience in real estate, specializing in the sale of industrial and office investment properties. Von Romer has been a real estate instructor, mortgage broker, mortgage broker instructor, and has obtained the CCIM designation and is a member of the National Association of Realtors and the Investment Real Estate Institute.

-end-

About Century 21 KoRes:  CENTURY 21 KoRes is a full service agency of real estate experts committed to you and your goals.  KoRes principals Tulio Rodriguez and Monica Cataluna-Shand, and a dedicated team of talented agents, have the knowledge and skills required to make any real estate transaction, no matter how complex, a stress-free experience.  For more information, please call 954.888.9946.

The Importance of being a loser!

Recently I was reflecting on my career, life and what on a “long strange trip it’s been”. I came to the realization that everything that I have learned, worth learning was a result of some mistake I made or loss I suffered. I can literally mark the epiphanies that I have had to my periodic self-immolations.

Credibility

My first real life lesson came when I was about 18 or 19 and I was working in the construction industry for my “quasi-uncle” Pork (not his real name). I was made a salesman/estimator/supervisor after it was determined I was not to be entrusted with power tools. I was given a pad and a pen instead.

I was assigned a fire restoration job with smoke damage and some other small renovations. I wrote the estimate, priced the job, hired the sub-contractors, and ran the job.   (And ran the job… and ran the job…and ran the job). I was great at getting started but lousy at completion, I guess I lost my attention along the way.

One day Pork pulled me into his office and proceeded to question me in detail about the status of the job. The more I explained what was going, the more his face took on the look of the cartoon character “Droopy”. His eyes began to sag further and further, his ever present cigar began to dangle precariously from his lower lip.

Pork recovered his composure and promptly berated me calling into question my credibility what I remember goes something like this, “That is the biggest load of bullshit excuses I have ever heard in my life, now get the hell out of my office and finish that job…you have zero…and I mean ZERO credibility!”

I wanted to jump over his desk and strangle him. The more I thought about it the more I realized he was absolutely right. The job is either done or it’s not, there are always delays but it all comes back down to doing what you say you’re going to do. You are either credible or you’re not!

Humility

This used to be a really tough one. I have discovered that the older I get the dumber I was. I can recall sitting on my 30th birthday and looking back and thinking what a dumb ass when I was 20. I have had similar revelations on my 40th birthday, 50th birthday, now I just look forward to getting smarter.

The Pennsylvania Dutch have an old expression “Too soon old…to late schmart” it’s funny but it’s the absolute truth. I remember being in my 20’s and being certain that I knew everything that I needed to know…I was mistaken.

Years later I was working in a clothing factory and because I was articulate (and nobody else wanted it) I got elected as union shop steward. I was elected to represent the ACTWU Local 399A (not to be confused with the ACTWU Local 399b) in wage and benefit negotiations. To set the stage properly I have to describe the cast of characters.

The lead role in this lesson is played by a guy named Stanley. Stanley is a New York attorney, raised in Brooklyn, went to NYU and was one of the toughest negotiators I have ever. The factory was owned by three generations of one family and was founded by the grandfather and his mother in the early 1900’s.

The father looked and sounded like Mr. Burns on the Simpsons television show. He used the factory workers to perform menial tasks around his home like washing and waxing his car mowing his lawn. The grandson had regularly scheduled mental breakdowns due to the stress of running the company.

Competition in the textile industry was fierce, imports were flooding the market and many companies closed.  The company had survived a depression and two world wars and they were determined to survive this new threat. Even if it meant the workers had to pay for it!

I got locked in a room with Stanley for 8 hours a day for the next week.  Stanley browbeats me with company demands, no over time, no sick leave, no paid vacations, no nothing. I do the best I can, and go back to report to the rank and file…(what an appropriate name)! After a week of getting brutalized I walk out with an agreement that is acceptable to the proletariat.

Stanley and I shake hands (I suppress my homicidal urges) and Stanley says “you didn’t do bad in there kid…lets go get a beer and I’ll tell you what you did wrong” The last thing on earth I wanted to do was enjoy an adult beverage with Stanley. I arrive to find that the guy who had been beating me senseless for two weeks had been replaced. The gentleman I was meeting with was soft spoken, gracious, and urbane.

Stanley told me about all the mistakes that I had made during the negotiations. I took the process personally; I didn’t know about the needs or desires of the owners. But by far the worst part was thinking I knew more that I did. Stanley told me that if I practiced, and learned about negotiating he felt that I could be a good negotiator. I had suffered from the Greek sin of Hubris!

Dealing with adversity

Life’s not fair! As sales manager for a commercial real estate firm I had an associate who would come into my office when something went wrong. I could tell by his expression what was coming next…”Life’s not fair

He said it so often that before he would walk into my office I would hold up my hand and say…”I know…it’s not fair” in the whiniest voice I could muster.

There are thousands of platitudes about when the going gets tough…hard times don’t last…blah, blah, blah. Here’s the reality, life is going to absolutely, positively kick your ass! Guess what it kicks everybody else’s ass too! While your good and banged up take stock of what you have got…what you have learned, and what you’re going to do about it.

I had just gotten married (for the second time, that’s an entire story unto itself) and was in the process of losing my construction company through a series of bad decisions and having a reach that exceeded my grasp.

All of my friends from the gym had gone out of town to a big powerlifting meet. I had to stay behind to try and salvage what I could of my company. I decided that it wouldn’t be fair for my new bride to miss the event so I asked one of my gym buddies to escort her to the event.

About two a.m. Saturday morning my phone is ringing off the hook so I finally answer the call. A woman begins screaming at me that my wife is sleeping with her husband, how I could let this happen and that somehow I’m responsible. I explained that it was impossible seeing as we had just gotten married a month ago and we were in love.

I call my wife’s hotel room and there is no answer. I get frantic, I try my friend who escorted her he does answer his phone but is incoherent and hangs up.

Sunday my new bride returns and she proceeds to tell me that she is having an affair because the pressure and stress of my job made her. She asks me to move out so that she can contemplate relationship.

I ask my closest friend if he would help me move my things out of our house and into a small apartment. I explain the situation to him empathizes and promptly moves into my house with my wife!

In three weeks I lost my house, my wife, and my company. I was depressed to say the least, I didn’t think I would recover and ever have a company, career, or love life.

I found a job, started training at a different gym. I changed my circle of friends and moved to a different town. A funny thing happened, I was so busy working and working out that the “agony of defeat” soon faded. Since then I have bought and sold real estate, started companies, fell in love, gotten married, raised a daughter…in short recovered.

I learned that adversity sucks…it happens to all of us…and like the old expression go’s “this too shall soon pass”.  So, when “life isn’t fair” I look at what I need to learn then get off my ass and go do something! I learned that no matter how bad things got there was always someone worse off than me!

Bad decisions lead to lessons learned

There is a story that gets recycled about an employee who is given an assignment, fails and cost the company hundreds of thousands of dollars. The employee discovers the size and severity of the mistake tenders their resignation. The Boss tears up the resignation letter refusing to accept the resignation and tells the employee “I just paid several thousand dollars to educate you and you’re not getting fired”.

In business and life if somebody accidently wins they think did “it” and that their skills, charm, or good luck won the day. Wrong!

As an example I have a rule that I never show a property without confirming the commission payable. If I cannot get an agreement I will not show that property.

I break my own rule! I have a tenant looking for space so I line up four or five candidates call all of the brokers and discuss the commissions and terms. I send them each an agreement to autograph and return for my file. I schedule the tour and away we go…I take the tenant to all five and he falls in love with one space in particular.

We draft a Letter of Intent and quickly come to an agreement. The lease is drafted, the tenant moves in and I am a hero for finding it so quickly. I prepare my invoice for the commission and present it to the Landlord. The Landlord then informs me that they never pay commissions in advance, I would be paid in arrears only the if tenants check clears and only while he remains in the space.

Postscript to that story is I got $37.65 a month each and every month for the next 60 months. Lesson re-learned never show a property without a written commission agreement up front. I was so busy I didn’t follow up on that one letter , I made the decision to show it in the absence of that letter agreement.

Flash forward about 20 years. I have a similar situation I am showing a national credit tenant space.  I find the perfect space, it couldn’t have been any better had the hand of god stretched forth from the sky and a voice said here is your space!

I have a commission agreement in place, a ten-year lease is drafted to the tenant’s satisfaction. We get the lease signed and back to the Landlord along with an invoice for the ten-year term. The landlord’s agent calls to tell me that the landlord has decided to pay on the first three years and then each year annually thereafter.

I mentioned that was not what we agreed upon and they needed to honor the agreement. The landlord then goes to the tenant presents a new three-year lease containing an additional 7 one year options. They sign a new lease and the landlord sends a check for the full commission on a three-year lease.

We learn infinitely more from our mistakes than we do from your victories…Tony Robbins say’s “When we win we party…when we lose we ponder”. I think about how many times have “blown my own legs off” analyzed what happened while swearing to yourself…”I’ll never do that again”.

I almost hate to bring up these extremely time worn and oft repeated examples…but!

The story goes, Thomas Edison was questioned about the number of attempts he made before making a working light bulb. When asked about his failures he is reported to have said “I have not failed. I’ve just found 10,000 ways that won’t work

Babe Ruth hit 714 home runs, a .342 batting average in his career he also had 1,330 strike outs. That means that he only got a about one third of the time! Yet for nearly a century he was a hero and legend.

We learn infinitely more from our failures that we do from our successes. We dissect them, ruminate over them and then swear “to never make that mistake again”. I operate from the “ready…fire…aim…fire some more” school of thought. I would rather err on the side of getting something done than being incapacitated by getting it perfect firsty. Sometimes good enough is just that…“good enough”. Usually there is no benefit in spending hours, days, or weeks to get a small incremental improvement that don’t make a difference.

Ever tried. Ever Failed. No matter. Try again. Fail again. Fail Better!” Samuel Beckett

 

 

 

The Top Five Personality Traits of a Successful Commercial Real Estate Agent!

Over the last 20 years or so one of the questions I hear most often in a commercial real estate course is what makes a good commercial real estate agent?” Now, that I have the luxury of being able to sit back and think about the question, I think I have an answer.

I think there are five key traits that all the great commercial real estate agents I have known, taught, or done business with have. It doesn’t matter what they did in a prior “life” or what their educational background is. I think they all share the same characteristics.

I have known guy’s right out of college that have done extremely well. I also have known people that were from fields so completely removed from commercial real estate that I couldn’t imagine them surviving let along excelling.

I knew one character that was in the garment business, left the garment industry behind and became a very successful commercial real estate broker. This guy literally did everything the wrong way, he specialized in buyer brokerage; he had a secretary print his emails so he could read them, and his desktop computer was essentially a giant paperweight. Yet, somehow he managed to earn a six figure income every year!

How did he do it despite violating just about every tenet of the real estate guru’s?

Trait Number One; Perseverance, he was absolutely persistent…not pushy, but persistent. He had his own way of keeping track of people and following up with them. And boy did he follow up, see he understood that a “no” today didn’t mean a no forever or even next week.

He would prioritize his leads into A, B, and C quality leads and then he would follow up. A’s got more attention than B’s and C’s because the A’s were the most likely to buy in the near term. B’s and C’s got contacted but less frequently and over a longer term.  He knew that buyer’s required cultivation and he would just keep “watering” them every now and again and when they were ready to buy he was there to help.

One of the other things he did that I thought was absolute genius was he never called a prospect without something new to offer them. He would always have a new bit of news or a recent transaction or anything that would add value to the conversation.

 Trait Number Two: Patience, one of the biggest mistakes I see new agents making is the mistake of trying to close something too fast. I know this is going to sound silly but allow me a war story!

Back when I was a young commercial real estate broker I was working a particular market and I turned up a seller who was contemplating selling his building. (I would rather be lucky than smart…sometimes!) Anyhow, the conversation basically went something like this:

Seller: Yeah, I would sell that building…but I wouldn’t take a dime less than $2,500,000 for it.

Me:      Okay, well why don’t we get together and see if I can make that happen.

Seller:  Just bring me an offer.

Me:      Trying frantically to overcome that objection.

Seller: Just bring me an offer and put in your fee.

Me:      Argh!

That is an oversimplification but that’s about how it went. The good news is that I had targeted that area because I had someone looking for that market. In fact the party that I was working for owned buildings in the area and wanted to add to his holdings.

I spoke to that owner and he indicated that he would definitely buy a building like the one I had found, and he would not pay any more than $2,500,000 for such a building.

Lights and sirens sounded in my head…I have a deal…Maybe!

What would happen if I went charging over to the buyer’s office with a $2,500,000 offer an hour after we spoke?

I suspect one of three things would have occurred. First, I almost guarantee the price would have gone up…why? If I was able to produce an offer that quickly and at full price the asking price must have been too low. Second, I must have had the buyer up my sleeve all the time, and therefore I should not be entitled to a full commission. Third, there is no one on this planet worth $150,000 an hour! ($2,500,000 X .06= $150,000)[1]

So, what did I do? I slowed the action down. I asked the buyer to put in an offer that was lower than the $2,500,000 that he would have paid. Why, because everyone in a real estate transaction wants to feel like they got a “deal”. The seller doesn’t want to leave money on the table and the buyer doesn’t want to overpay.

I went back and forth between the buyer and the seller three or four times and got them both to agree to a price of $2,250,000 with a full commission to the broker. Both felt that they had gotten their “pound of flesh” and had gotten the full benefit of the transaction.

Trait Number Three: Inquisitiveness, all of the most successful agents I know are naturally curious and are constantly looking into different ways to market, prospect, package, finance, sell or underwrite a transaction.

That is why you will see all those initials after their names like CCIM, SIOR, MBA, CPA or any number of others. The top professionals keep learning and investigating they know you can never know all there is to know about a topic.

I once read a report about a study of competence. In the study the subjects were interviewed and asked to rate their individual competence in a particular subject matter. The people conducting the study then provided and exhaustive test that specifically targeted the competency of the test subjects.

What they found was revealing, the people who rated themselves as competent and scored poorly tended to overrate their competency buy as much as 60%. The people who were competent in the subject matter routinely underestimated their competence by as much as 20%. The results astounded the scientist conducting the experiment. They wanted to know why the huge disparity in people’s opinions about their level of competence.

The answer was interesting, it seems that the people who were incompetent “didn’t know enough to know what they didn’t know” in the scientist words they lacked the metacognitive skills to recognize their incompetence.

The take away is stay curious and interested, learn all you can about your product and then…learn some more!

Trait Number Four: Discipline, the short answer is treating your career in commercial real estate like a real job…because it is! When you start your career you should be putting 40-60 hours a week minimum. There is just no way around it!

You have to research the product, find the owner, drive the market, photograph the properties, make calls, go on appointments, do proposals, and do listing presentations. There is just not enough time in the day to do all that.

You must develop the habit of “doing the most productive thing you can at every business moment” and compartmentalizing your time. You should be at your desk at the latest 9 am and you should work until at least 5 pm. You may even take your work home, I try to do work wherever I am and make it fun.

Sometimes I do proposals on the patio while enjoying a cigar, or I do research while watching a movie, I often take pictures on the weekends while listening to my favorite music. The point is you have a lot of work to do and a finite amount of time to do it so prioritize, organize, and maximize your efforts.

Lastly, don’t get bogged down in the “office” stay away from the coffee machine or the water cooler and for heaven sakes don’t pay any attention to what anyone else is doing unless they are incredibly successful!

Trait Number Five: Execution, you must have the ability to focus on the task at hand and see that task to completion. Too many people get caught up in doing what is urgent instead of what’s vital and they flip from project to project and never really get much accomplished.

They are busy, but they never seem to get anything done or completed, they just go from project to project and never seem to quite get it in the “can”. You know the ones I am talking about they move pile “A” to position “B” and then start all over again. I understand that there are projects, proposal, marketing plans that are multi-part and require an ongoing effort. Here is the point break the projects down into discrete units of activity, set a specific time to complete that portion of the project and then move on to the next project. Later in this book we will discuss what a typical day would look like in the life of a newly minted commercial agent.

Block off time to do your prospecting, proposals, first appointments, listing presentations and follow up and when you have met your specific target go home, go to the gym, read a book, make sure to schedule everything and see each item to completion. You can have a life and a career if you plan your business and execute that plan.

Again, stay away from the “water cooler” crowd they will be able to tell you with great authority what doesn’t work…because they are currently doing it. I had a guy in my office that refused to adapt to the new market realities. I explained to him that sitting and waiting for buyers to walk into the office was meaningless and he could count on having nothing happen.

I told him about the “secret weapon letters” and he completely rejected the idea as too silly to work. Finally after about two months he sent out about six total letters and waited for the phone to ring. After about another month he concluded that “secret weapon letters” didn’t work and after several years in the business he was moving on.

Get My Manual!

That story has two morals, one is that six letters hardly constitutes “execution” in fact it’s even hard to say the word “effort” in the same sentence. Secondly, let our friend serve as a cautionary tale, he got into the business during the last major run up in commercial real estate. At the time he started you could basically plant a yard sign or run an ad and have 5 offers before lunchtime each one higher than the one before. Consequently, he misunderstood the business and its nuances, basically the fact that the market was an anomaly and

that there is no substitute for hard work and dedication.

In short the top commercial brokers I have worked with over the nearly 30 years I have been in the business all have those five personality traits, they all have the qualities of perseverance, patience, inquisitiveness. They are all disciplined and spend time working on transaction they know have a strong probability of closing they don’t get sucked into the vortex of office politics and any other nonproductive activities. They also all have a strong desire to execute, close a transaction and move on to the next.

I hope that gives you some insight into the traits that make for a successful career in commercial real estate.

Tune in nest week for some more insights into the different property types that make up the commercial real estate arena…I’ll give you a hint there are more ways to make money than you can probably imagine.

Want to hear more go to www.adamvonromer.com

 

[1] Any discussions regarding commissions are purely hypothetical and for illustrative purposes only and not to be construed as traditional or