CSD Minute: Rent Bumps

Here is the first in a series of brief videos on commercial real estate topics. This one is a part of a series of underwriting tips and shows you how to maximize static income for leased investments.

The Most Powerful Word in Commercial Real Estate Prospecting

What if I told you that there was one word that could open almost any door for you? One word that could get commercial real estate owners and tenants to tell you just about anything that you needed to know? One word that could shorten your calls and meetings, saving you time and letting you make more money?

What if I told you that you already knew the word and used it every day, usually without realizing it? How about if I told you that you used to use it a lot more, especially before you started kindergarten?

That word is…. Why.

Why is the simplest way to get a client talking. It can dig you out of holes when you don’t understand what a prospect says. It gets the people you talk with to give you information that you can use to develop your data on them and develop your general commercial real estate knowledge. And it stops you from saying anything foolish, since the person on the other side of the conversation is the one talking.

If you don’t believe its power, try this exercise with someone outside the commercial real estate industry. Ask them a simple question like “Why did you wear that shirt,” or “What’s your favorite book” and respond to what they say with “Why” or “Why did you do that” or something else along those lines. Go back and forth as many times as you can and see where the conversation goes with you just asking “why.” This will give you a sense of the word’s power.

The next time you’re talking with a commercial real estate client prospect, try asking “Why.” You might be surprised where it takes you.

What’s your favorite word? Let us know, and let us know why, below in the comments section!

Commercial Real Estate Secrets: Competing the Right Way

A few years ago I went on a meeting with a new agent that had just completed commercial real estate training. We sat down with a small private owner that had a rough 12-or-so unit multifamily property and pitched our services to help him sell his property and get out from a big debt problem.

Over the course of the conversation, he let slip that he was talking to another broker. After asking a few times, he finally gave us the name of the other commercial real estate broker.

The other broker was the number two agent on one of the town’s best known institutional apartment teams. He had a reputation for arrogance and was known for doing an acceptable job of selling deals to the most obvious buyers. The deal we were working on was 1/20th of his target deal size. He had over 10 years of experience, as well.

So what was I to do? The agent I was helping had just gotten through my introductory commercial real estate courses, had never listed a deal, and was still living with his parents.

I complimented the heck out of the broker. I let the client know that he was one of the most active brokers in the community and that he would be in good hands with the other broker. This set him at ease. Once he was at ease, I pointed out how my agent’s highly targeted database of small property investors was the best tool to sell the property. And I never mentioned the competitor.

There’s one thing that I didn’t tell you…. I knew that the competing commercial real estate broker would badmouth my firm and my agent to get the business.

He did. And we got the listing. And sold it. And since then, that agent has sold a lot more deals by doing the right thing and letting his competitors look like jerks.

How do you compete? Let us know below!

Commercial Real Estate Secrets: Cold Calling

When I was a prospective agent going through commercial real estate training classes, a very wise man told me something that still sticks with me. He said that I should never call anyone if I didn’t have something to talk about that could realistically make them at least one million dollars.

Granted, this person was prone to exaggeration, but what he said was very true and I took it as a rule. Never call anyone if I can’t make them one hundred thousand dollars.

How is someone going to make $100,000 from a single cold call? Thanks to the way that commercial real estate works, this is actually easier to do than you might think.

Let’s take the owner of a 40 unit apartment building worth $3,000,000. Do you have an idea that can reduce his expenses or increase his income by just three-and-a-half percent? If so, you just created $105,000 in value, as well as increasing his cashflow by thousands of dollars a year. Can you help a commercial real owner with a $1,500,000 mortgage refinance her loan to one that is 70 basis points less expensive? If so, you just saved her $100,000 over ten years.

When you start looking at your business development calls like this, your attitude shifts. You know that every call you make is valuable to the prospect on the other line. This gives you the confidence to make your points convincingly and it gives you the ability to close for a meeting. After all, who’s going to say “no” when you tell them that you can make them $100,000 over the course of a brief meeting?

You’re training your commercial real estate clients, too. They’ll start looking at your calls differently and start thinking of you as a partner instead of an annoyance.

This might seem obvious but over the years, I’ve seen a lot of commercial real estate courses and training materials on how to develop business, how to serve clients and the like. Very few of them mention this simple rule.

But now you know it. Go apply it and leave a comment below to let us know how it works for you!

The Secret to Learning Commercial Real Estate Skills

Odds are that you’ve been through a number of different commercial real estate courses and training and development programs. If your experiences were like mine, some of them were bad, some were mediocre and some were good. You probably walked out of them with lots of good ideas but, to be honest, didn’t implement very many of them.

We can take a lesson from our colleagues in the medical profession. They’ve figured out how to make the things they learn stick. What’s their secret? For medical students, learning requires three steps:

  1. See it.
  2. Do it.
  3. Teach it.

So how do we apply these principles in commercial real estate training situations? Well, you know how to “see it”–go to a class, watch a video, or read a book. The secret is to immediately find a way to take those skills you acquire and use them. While using them with clients is best, you can also get “do it” experience by roleplaying.

The last step of development is what commercial real estate agents frequently skip doing — teaching it. Once you’ve used the skill, grab a colleague and teach it to them. Since you need to know it to be able to teach it, you’ll have to really learn it. At the same time, it will give you a push to keep using it since you won’t want to look like a hypocrite.

See it. Do it. Teach it. Following those three rules will help you improve your commercial real estate skills and make more money.

How do you take what you learn and turn it into action? Let us know in the comments section below. If you don’t see it, just click the little comment box on the right side of the bar below this (it looks like when someone speaks in a comic book).

 

The Top 5 Ways for Commercial Real Estate Brokers to Save Time

Not too long ago, I shared with you the top five ways that commercial real estate brokers in my courses wasted time. Since I’m a solutions-kind of guy, here are five ways to turn time wasting habits into time saving habits. Follow them, and you’ll get our industry’s holy grail — more money without working more hours:

  1. Focusing on the task at hand. Build the tasks that you need to do, but don’t really want to, into your schedule. Blocking out time for things like cold calls and atabasing and then sticking to your commitment will let you do more of those things in less time and free the rest of your time up to work on other things.
  2. Networking strategically. Who’s the most important person that you can meet? Someone who is a prospective client. How’s the second most important person you can meet? Someone who can convince a prospect to become your client. Focus your networking activities on meeting people that can send you business. You’ll make more money and you’ll spend less time standing around with vendors and with competing commercial real estate brokers.
  3. Using email and social networks to deliver information. Electronic communication is a powerful way to disseminate marketing messageslike notifications of your transactions and newsletters. This lets you send the same emails to many people, saving you a great deal of time. It’s also a great way to send instructions to third parties. Talk to clients and prospects, though. That way, they’ll see how great you are at what you do!
  4. Using the phone as a gateway. If you’re on the phone to collect information, consider doing it over email. If you’re on the phone to create or maintain a relationship, keep the call as short as possible. Your whole goal should be to sit down with the person on the other side of the phone and talk to them face to face. A 30 minute conversation takes as much time in person as it does on the phone and, if you book your meetings back-to-back, it won’t take any additional travel time.
  5. Dominating a market. Find a niche in your community’s commercial real estate market and exploit it. Whether you work on office landlord representation deals on the east side of your area or you specialize in selling single-tenant net leased drugstore properties, having focus in your business will save you a great deal of time. You can have the same conversations with different clients and use the same market information to do multiple transactions. At the same time, you also build marketshare which helps to breed more marketshare.

What’s your best time-saving technique? Let us know below in the comments section!

5 Ways That Commercial Real Estate Brokers Waste Time

The number one thing that the students in the commercial real estate courses I’ve taught over the years wanted to know was how to make more money without working any harder. Most of them were very busy people who worked long hours. Well, they spent long hours in the office. But a lot of that time wasn’t productive. Here are the top five ways that I saw them wasting their time:

  1. Multi-tasking. We’re all busy and we all multitask. The fact of the matter, though, is that we’re usually more productive when we focus on a task, finish it and move on. Furthermore, when we are working on things we don’t want to do, like cold calling or databasing properties, we usually end up spending more time on the other tasks than on the thing we sat down to do.
  2. Networking with the wrong people. While it’s true that having a big network is better than having a small one, the people in your network matter. For example, if you’re working on industrial investment properties, you probably don’t need to have an extensive list of contacts in the furniture rental industry.
  3. Misusing email and social networks. Email and social networking are amazing tools (you’re reading this!), but they’re not panaceas. I’ve seen many different agents use email incorrectly in the course of their commercial real estate business. Not only can this create unnecessary liability, but it also eliminates the opportunity to talk with a client, hear what they are thinking and influence them.
  4. Spending too long on the phone. Do you like talking to people on the phone? Would you rather sit down with them face-to-face? Me too. Most long conversations, especially when you are trying to develop business, just end up talking the client out of meeting with you.
  5. Chasing deals instead of markets. It’s hard to get any traction when you’re working on an apartment sale one day and a commercial real estate tenant representation transaction the next day.

What are some of your biggest time wasters? Let us know below and we’ll try to help you find ways to save time!