Top 10 Clues You Are Working With A Commercial Real Estate Dealmaker

Top 10 Clues You Are Working With A Commercial Real Estate Dealmaker

What makes a​ successful commercial real estate dealmaker? While not everyone aspires to​ be a​ Donald Trump, many will agree he does indeed have qualities of​ a​ successful commercial real estate dealmaker.

But specifically what are the​ qualities of​ a​ successful real estate dealmaker? What’s the​ difference that makes the​ difference? How do you know one when you see one?

After spending a​ good many years in​ the​ commercial real estate investment arena, I have become pretty adept at​ spotting them. and​ frankly, they are a​ joy to​ do business with. Here’s why:

Ten Clues Your Working with a​ Dealmaker

• Clue #1: Dealmakers are KNOWLEDGABLE. They know their market, knows his financial wherewithal in​ cash and​ credit, they know their criteria for​ an​ investment property, they know how to​ reduce the​ gap between the​ offered price and​ asking price, they know how to​ close deals—but most importantly: in​ essence, they know how to​ make a​ decision when the​ opportunity arises.

• Clue #2: Dealmakers use the​ tools of​ financial analysis to​ quickly size up a​ property’s potential. They know what to​ look for​ in​ financial statements and​ they retain sound counsel regarding the​ legal and​ financial decisions.

• Clue #3: Dealmakers make a​ constant commitment to​ understanding their market and​ refining their criteria for​ acquisition. You can tell by the​ questions they ask. They are prepared. They are thorough. They have researched the​ market, know what to​ look for, and​ don’t waste time looking at​ properties don’t not fit their profile.

• Clue #4: Dealmakers have financing already in​ place. They have bank references and​ track record that indicates they can perform. They maintain established lending relationships, can bid an​ all-cash price, or​ can assume existing loans depending on the​ unique requirements of​ each deal.

• Clue #5: Dealmakers know how they will manage and​ improve a​ property for​ profitability and​ increased equity. During their due diligence, one of​ their major focuses is​ on anticipated costs so they can factor them into their plans.

• Clue #6: a​ dealmaker knows it​ is​ vitally important to​ examine a​ property’s trend of​ operations over several years, rather than looking at​ just the​ current financial statements. This affords them a​ longer term perspective, once the​ anomalies have been filtered out.

• Clue #7: When determining the​ valuation on the​ operations, the​ dealmaker will use a​ average, forward-looking projection that reflects his own operation of​ the​ property and​ the​ effects of​ his own improvement plan (rather than use the​ owner’s stated the​ valuation on the​ operations).

• Clue #8: a​ dealmaker is​ FLEXIBLE. a​ dealmaker knows success is​ about fulfilling the​ seller’s most pressing needs. They sincerely attempt to​ structure an​ offer to​ meet the​ seller’s needs, rather than attempt to​ make the​ one deal structure they are comfortable with fit every situation. in​ short, they want, have and​ use the​ options available to​ them.

• Clue #9: Dealmakers NEVER try negotiate every last penny because they know real profitability and​ increased equity will come from their own efforts to​ improve the​ property.

• Clue #10: Dealmakers want to​ develop a​ sound strategy and​ business plan for​ each property they acquire. Then they follow through on their plan.

In commercial real estate, it’s a​ common posturing strategy among beginners as​ well as​ experienced people alike to​ “talk the​ talk”. But when a​ person actually walks the​ walk, regardless of​ the​ size of​ their investment portfolio, I have incredible respect him or​ her.

A word of​ caution: Experience or​ years in​ the​ business is​ not a​ good indicator of​ being a​ dealmaker. Size of​ their portfolio makes little difference. Personality is​ factor because this is​ a​ people business, but it​ can sometimes be misleading.

The best indicator is​ their ability to​ “walk the​ walk”—and that takes a​ little time to​ determine with each person.

In summary, the​ real dealmakers make this business easy. They even make it​ enjoyable. They know what it​ takes to​ be successful and​ are willing to​ do it.

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