Category: Uncategorized

Source: Propertyware

When you are a property manager, filling vacancies and looking after properties are not the only things on your to-do list. You have to make sure your tenants are happy, the contractors are doing their job, and your actual clients – the property owners – are making money from their investment. To cut a long story short, life in property management is never dull…or easy. While a few property managers drop out after some years, unable to meet the long hours, never-ending stress, and hectic demands of the job, others manage to have it all. Ever wondered why? It’s because they have mastered these 8 secrets of being a successful property manager. Take a look!

1. A successful property manager knows that attitude is key

One thing common to all great property managers is a great attitude. When you are managing a large number of properties, there are always times when things don’t work out as planned. But a great property manager never gives up or lets such things bring him down. He treats every problem that comes his way as a new opportunity to make things right. He doesn’t have a rigid, pessimistic attitude that prevents him from approaching a problem from a different angle or experimenting with an out-of-the box solution.

Still not convinced? Studies have proven that happier people who face life with a positive attitude achieve greater success at work and in life

2. A successful property manager is a great ‘people person’

To be a successful property manager, you first have to be a great ‘people person’.

When you are in a profession that involves interacting with so many people on a daily basis, you have to be able to relate to them,communicate with them, understand them, respond to their issues with sensitivity, and build relationships based on trust and mutual respect. As the go-between between many different parties with varying, and sometimes conflicting,needs and interests, you need to know how to balance those interests so that everyone is happy.

3. A successful property manager knows that technology is his friend

A good property manager can become a great one by learning how to use technology to his advantage. Granted it can be difficult to stop doing things the way you have always have, but what if technology offers you a less time-consuming and more efficient way to do it?

Harnessing the huge power of technology can free you from the tedium of routine tasks, giving you more time to spend on things that really matter. All your leases, reports, work orders, and owner and client communications can be stored in one single platform which you can access any time as long as you have an internet connection.

4. A successful property manager keeps an eye on the competition

A successful property manager always keeps a discreet eye on the competition to compare rental rates and to find out where he can improve. He knows that researching his competition can give him new ideas for growing and improving his business. For example, you can set yourself apart from other rental properties in your area by introducing new, exciting schemes for your tenants that are not available elsewhere.

5. A successful property manager avoids falling into the complacency trap

Property management is a field that is evolving every day. If you want to be more successful as a property manager, it is important that you keep yourself abreast of the latest trends and regulations, especially in big cities where property laws change frequently. This will also help you keep the owners or the board informed of all goings-on, so that they are not taken by surprise at the last minute.

You should also make sure that you keep learning or take professional refresher courses to avoid getting outdated. Joining industry associations and attending local property management conferences can help you stay informed and valuable as a property manager.

A good manager who avoids the trap of complacency will also be able to anticipate problems even before they arise and take steps to prevent them, making the lives of the owners and the tenants more comfortable.

6. A successful property manager is always professional and organized

A good property manager knows that is always important to be professional in his dealings with people, be it tenants, owners, staff, or other professionals. He never behaves rudely or lets his personal biases interfere with his judgment or influence his decisions.

At the same time, while he is always friendly with the tenants, he knows there is a very thin line between being friendly and being a friend. Crossing that line and developing a personal relationship with a tenant can very well impact a property manager’s ability to work efficiently.

And don’t forget, your organizational and planning skills are also very important if you want to move up the career ladder in property management. If you have set out clear, well-defined processes, especially for routine tasks like screening of new clients or rent collection, it can minimize confusion and help you and your staff save time and work more effectively.

7. A successful property manager has a great team

If you want to succeed as a manager, you need to have a great team working under you. Since most of your employees will have to interact with owners or tenants on a regular basis, you have to make sure that you hire people who are not only efficient at their jobs, but also share your professional values and work attitude.

8. A successful property manager knows the importance of networking

A successful property manager has a great network of other real estate professionals and contractors whom he can rely on. Maintaining good professional relationships with such people can help you grow your management company, and also learn so many things, including new ideas, best practices and marketing. Social networks, such as LinkedIn, can be a good place to start building connections.

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By Alyssa Gregory

Source: The Balances

There are more than 28 million small businesses in the United States, making up a whopping 99.7 percent of all U.S. businesses, according to the Small Business Administration. When you consider some of the most popular reasons to start a business, including having a unique business idea, designing a career that has the flexibility to grow with you, working toward financial independence, and investing in yourself — it’s no wonder that small businesses are everywhere.

But not every small business is positioned for success. In fact, only about two-thirds of businesses with employees survive at least two years, and about half survive five years. So you may be in for a real challenge when you decide to take the plunge, ditch your day job, and become a business owner. The stage is often set in the beginning, so making sure you follow all of the necessary steps when starting your business can set the foundation for success.

Here are 10 steps that are required to start a business successfully. Take one step at a time, and you’ll be on your way to successful small business ownership.

Step 1: Do Your Research

Most likely you have already identified a business idea, so now it’s time to balance it with a little reality. Does your idea have the potential to succeed? You will need to run your business idea through a validation process before you go any further.

In order for a small business to be successful, it must solve a problem, fulfill a need or offer something the market wants.

There are a number of ways you can identify this need, including research, focus groups, and even trial and error. As you explore the market, some of the questions you should answer include:

• Is there a need for your anticipated products/services?
• Who needs it?
• Are there other companies offering similar products/services now?
• What is the competition like?
• How will your business fit into the market?

Don’t forget to ask yourself some questions, too, about starting a business before you take the plunge.

Step 2: Make a Plan

You need a plan in order to make your business idea a reality. A business plan is a blueprint that will guide your business from the start-up phase through establishment and eventually business growth, and it is a must-have for all new businesses.

The good news is that there are different types of business plans for different types of businesses.

If you intend to seek financial support from an investor or financial institution, a traditional business plan is a must. This type of business plan is generally long and thorough and has a common set of sections that investors and banks look for when they are validating your idea.

If you don’t anticipate seeking financial support, a simple one-page business plan can give you clarity about what you hope to achieve and how you plan to do it. In fact, you can even create a working business plan on the back of a napkin, and improve it over time. Some kind of plan in writing is always better than nothing.

Step 3: Plan Your Finances

Starting a small business doesn’t have to require a lot of money, but it will involve some initial investment as well as the ability to cover ongoing expenses before you are turning a profit. Put together a spreadsheet that estimates the one-time startup costs for your business (licenses and permits, equipment, legal fees, insurance, branding, market research, inventory, trademarking, grand opening events, property leases, etc.), as well as what you anticipate you will need to keep your business running for at least 12 months (rent, utilities, marketing and advertising, production, supplies, travel expenses, employee salaries, your own salary, etc.).

Those numbers combined is the initial investment you will need.

Now that you have a rough number in mind, there are a number of ways you can fund your small business, including:

• Financing
• Small business loans
• Small business grants
• Angel investors
• Crowdfunding

You can also attempt to get your business off the ground by bootstrapping, using as little capital as necessary to start your business. You may find that a combination of the paths listed above work best. The goal here, though, is to work through the options and create a plan for setting up the capital you need to get your business off the ground.

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Source: Entrepreneur

Before you start shopping for business space, you need to have a clear picture of what you must have, what you’d like to have, what you absolutely won’t tolerate and how much you’re able to pay. Developing that picture can be a time-consuming process that’s both exciting and tedious, but it’s essential you give it the attention it deserves. While many startup mistakes can be corrected later on, a poor choice of location is sometimes impossible to repair.

Be systematic and realistic as you consider the following 10 location points.

Style of Operation

Is your operation going to be formal and elegant? Or kicked-back and casual? Your location should be consistent with your particular style and image. If your business is retailing, do you want a traditional store, or would you like to try operating from a kiosk (or booth) in a mall or a cart that you can move to various locations?

Demographics

There are two important angles to the issue of demographics. First, consider who your customers are and how important their proximity to your location is. For a retailer and some service providers, this is critical; for other types of businesses, it might not be as important. The demographic profile you have of your target market will help you make this decision.

Then take a look at the community. If your customer base is local, does a sufficient percentage of that population match your customer profile to support your business? Does the community have a stable economic base that will provide a healthy environment for your business? Be cautious when considering communities that are largely dependent on a particular industry for their economy; a downturn could be bad for business.

Now think about your work force. What skills do you need, and are people with those talents available? Does the community have the resources to serve their needs? Is there sufficient housing in the appropriate price range? Will your employees find the schools, recreational opportunities, culture, and other aspects of the community satisfactory?

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By Jonathon Bailey

Source: Bankless Times

If you have decided that the time has come for your business to move to a new office space, there is a lot that needs to be considered.

You need to ensure that the new offices you choose are right for you, your business, and your members of staff. But, how can you make sure that this is the case? Read on to find out some of the most important factors you will need to consider.

Client reach

One of the most important factors to consider when looking for a new office space is how accessible you will be for your clients. This is especially the case for those working in a consumer-facing industry. You should do your research to find out more about where the vast majority of your customers are based, as well as areas whereby you have the greatest potential to acquire more clients. This will help you to pick the perfect spot for you.

Convenience

You also need to consider the convenience of the location for your employees. If your new office is in a place that is going to be difficult for them to get to, you may find that a number of your employees will hand in their notice, so you do need to be prepared for this. Remember that not everyone drives, so checking out the public transport routes is a must. It is also important to give your employees as much notice as possible about the move so that they can prepare for it.

Professional assistance

It is also a good idea to talk to an agent to get their professional opinion. A good example includes the Buyer’s Agent of East Florida. A specialist like this will know everything there is to know about the area. They will be able to tell you information regarding commercial properties in the area, how much they go for, and so on.

Price

Needless to say, the price is a pivotal factor when making any type of business purchase. Rather than looking for the cheapest office space you can find, take the time to draw up a thorough budget so you can determine what you can comfortably afford. After all, if you go for a cheap office, this could reflect negatively on your brand. Plus, you need to question whether the office space is really that cheap to rent. A lot of the lower priced adverts indicate that there are some hidden expenses. This is why it is critical to read each and every term and condition so you know exactly what you are letting yourself in for.

If you carefully consider all of the points that have been mentioned above, you will give yourself the best chance of choosing the perfect office space for your business.

From the location to the potential for future growth, there is a lot to consider, but it is a necessity if you want your company to flourish in its new office space.

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Source: Forbes

Buying or selling a home is an exciting experience for anyone. There is the thrill of the hunt and the excitement of the deal. The whole process is enhanced by a good real estate agent who knows the ins and outs of the market. But with so many brokerages and agents out there to choose from, finding a perfect fit may be more of a challenge than you expected. Working with a top agent who is experienced and trustworthy can go a long way in ensuring your property sells at top dollar, or that you buy for the best price in the market.

To help with the selection process, 14 members of Forbes Real Estate Council weigh in on how prospective buyers or sellers can make sure the real estate agent they’re working with is the right one for them. Here is what they had to say:

1. Choose The Person, Not The Experience

I am a firm believer in choosing an agent who works for you and with you. Don’t choose an agent based solely on experience. Although it’s good to have, it’s not everything. You will be spending a lot of time with that agent and you need to mesh. Choose someone relatable and real. Choose for you, not for the house. Choose someone good at talking and negotiating. – Kevin Taylor, Sand to City Real Estate Team

2. Remember Chemistry Is Key

It’s best to interview at least three agents before picking the one you work with. Focus on neighborhood expertise; look for hyperlocal. Ask yourself, “Is their marketing about them or their properties?” Also, can you trust them, are they honest? Chemistry is the key. – Kevin Hawkins, WAV Group, Inc.

3. Seek Referrals From Other Homeowners

Despite the technology that seems to take over much of the searching for a home, the right real estate agent is still a human-to-human choice. Referral is best. There’s no bigger compliment to an agent than a referral from a past client. Ask homeowners who they would recommend. If you know the area you want to purchase in or sell your home in, there will be an expert in that area. – Eileen Lacerte, Hawaii Beach and Golf Properties

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By Jordan Muela

Source: Manage My Property

While every investors situation is different, there are certain scenarios and factors that typically pre-dispose owners one way or the other. The following questions are designed to help you determine if you should consider hiring a property manager.

1. How far do you live from your rental property and how frequently can you visit the property on a regular basis?

If you are close you may be able to make the regular visits required for maintenance, inspections, collections, etc., otherwise the further you live the higher your travel time and expenses will be. The larger the distance the more temptation there is to not keep a close eye on things, and that can be a recipe for disaster. You should plan making monthly scheduled visits and there is always the potential for a middle of the night emergency call that requires your immediate attention. In the long run, is this feasible for you?

2. How do you deal with stress? Do you consider yourself to be a tolerant person?

This is a tough one. We all like to think of ourselves as level-headed and even-keeled, but at the end of the day it takes a special kind of person to deal with the ups and downs of property management. Behind the seemingly simple task of collecting rent every month lie a number of unpredictable problems can push people to their limits. Ask yourself how you would react in the unfortunate event that tenants:

• Get in fights with other tenants or neighbors
• Have domestic disputes
• Conduct illegal business in the dwelling
• Carry on all night parties and revelry
• Try to sneak extra people or animals into the home
• Decide to sue you
• Trash the property
• Incite the wrath of the HOA because of repeated deed restriction violations
• Refuse to pay rent because they are a “professional tenant” and know how to work the legal system for the maximum amount of free housing at the owners expense?

3. Are you currently overwhelmed with your property(s)?

Managing rental properties can become quickly overwhelming, even for experienced investors. There is always something going on that requires attention and it takes very little time for things to get out of hand. Hiring a property manager can provide an opportunity to regain control and restore stability to both your properties and possibly life in general.

4. How many rental properties or units do you have?

As your portfolio grows so do the management challenges, and it becomes easier for things to fall through the cracks. Investors with large portfolios stand to reap significant benefit by leveraging the efficiencies a property manager can provide. Size can also constrain investors’ ability to consider purchasing new properties if they’re already maxed out managing their current holdings.

5. How much experience do you have with maintenance and repairs?

If you can’t do it yourself, do you know who to call? Finding reliable handymen and contractors can take a while and in the mean time you may unknowingly hire people that are unethical, uninsured, do poor quality work, over charge etc. Maintenance and repairs are a significant component of land lording and if you question your ability to ensure the work is done well and in a timely manner, you might want to consider hiring a property management company.

6. How quickly are you able to get your unit rented?

Advertising, fielding calls, and showing the unit can take a considerable amount of time, but are critical tasks as vacancies will quickly eat into your profit margins. If you question whether you have the skills or the time to make this happen, OR if you have historically had an unacceptably high vacancy rate, you may want to consider hiring a property management company.

7. Are you capable of handling the accounting and record keeping for your property?

From profit and loss statements to tax deductions, this area needs special attention and becomes an increasingly larger burden for larger portfolios. Some owners (especially those with a back ground in finance) will do just fine, others may opt to hire an accountant to help with the book keeping. If you feel like this might be a weak point you might want to consider hiring a property management company.

8. Are you willing to be on call 24/7/365?

Its important to answer this question honestly, because when an emergency happens at your property you can’t ignore it. Your special event, important meeting, vacation, or personal crisis doesn’t relieve you of your obligation to your tenant. These emergencies don’t happen all the time, but when they do you have to be willing to handle them immediately. Can you handle being called at 2 in the morning to fix someone’s overflowing toilet?

9. Are you willing to confront tenants about late payments and if need be evict them from the property?

Many new owners dislike feeling like the bad guy and try to be understanding by making exceptions. The problem is that this only invites additional abuses and excuses by tenants. Late payments must be dealt with immediately, and while sometimes a friendly reminder is all that’s needed, other times, it can be a very confrontational process ending in eviction. Unlike running a charity, running a successful rental business means enforcing the rules even it means evicting a single mother who lost her job and won’t be able to pay rent anytime soon.

10. How well do you understand the laws governing land lording?

Ensuring the property is run in accordance with the law is critical in both preventing lawsuits and shielding yourself from liability if you are sued. Familiarity with contracts is also very important as your rental agreement is the only binding agreement between you and the tenant.

11. From a financial standpoint, is managing your property the best use of your time?

Ultimately, your decision to hire or not hire a management company should hinge on whether or not it is a good fit with your lifestyle and makes sense financially.  Individual investors will have to assess the opportunity cost of both options based on their unique circumstances.

Next, lets cover what exactly a management company can do for you and your property(s).

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By Betsy Morris and Eliot Brown

Source: WSJ

By Tim Blackwell

Source: Property Management Insider

With property operations, every day the sun sets and rises with the risk of incurring vacancy losses, bad debt, collection and concession losses, and more.

“Do you have a risk management strategy?” It’s one of the top questions asked of property management companies, and many organizations mistake risk mitigation for risk management.

If your company is only engaging in risk mitigation, or the proactive reduction of risk you’re willing to take on, you’re missing out on two-thirds of a comprehensive risk management strategy. Here’s why:

• There’s a risk of a kitchen fire or accident at the property, a result of a careless resident. You can’t calculate that risk and mitigate an accident or even the behavior of your renters.
• There’s a risk that a new renter isn’t even the person that’s referenced on the credit application. You can’t calculate risk and mitigate what you don’t know about a prospective renter.
• There’s a risk that a renter will skip out on the last few months of their lease, leaving you with bad debt. You can mitigate this risk, but at what cost to your occupancy?

The inherent risk that comes with property management is real, and even unlucky at times. We all know the unfortunate stories of accidents, theft, fraud, and more.  A colleague told the story of a resident golfer’s unfortunate timing while working on his swing one summer morning near the parking lot. While using plastic practice balls to reduce the risk of breaking a window, the resident was about to make contact when the sprinklers came on. Instead of striking the ball, the club hit squarely on a sprinkler head, sending a geyser in the air and dousing the interior of a convertible.

Because a renter’s insurance policy wasn’t in place, the renter was on the hook for a few hundred dollars of damage to the sprinkler system and cleanup of the car.

Other stories – and they are out there – spin more complex tales of big fires started by residents and fraudulent identities that cost apartment managers thousands of dollars in bad debt. Catastrophes like these can put properties in compromising situations if a risk management strategy isn’t in place.

Risk management sometimes gets confused with mitigating risk, which is reducing the impact of an event or cause that can’t be avoided or covered by another party. Risk mitigation really is one component of the greater risk management approach, which provides solutions for not only mitigation, but avoidance and transference of risk as well.

It’s a three-pronged platform designed to protect property operators and owners against economic loss that erodes gross revenue and net operating income (NOI) resulting from property damage, fraud and collection and vacancy losses resulting from traditional security deposit procedures.

In simpler terms, a good risk management strategy means you avoid as much risk as possible, transfer what risk you can to renters, and protects the property against the remaining inherent risk.

First: risk avoidance

The best way to protect yourself against risk is to not let it in in the first place! The primary way to avoid risk is by employing robust screening, complete with fraud prevention. Identity fraud is growing, especially with greater online leasing adoption.

Now more than ever, property management companies are vulnerable as applicants attempt to deceive your team throughout the leasing process. Falsifying documents is becoming more common place, as are synthetic identities.

Avoid taking on risky renters with a platform designed to stop identity fraud. Traditional screening tools – credit and criminal reporting – aren’t good enough any longer. Advanced technology that incorporates identity verification and fraud prevention is essential. Look for platforms that can also prevent fraud, even for existing residents, with a direct integration into the property management system.

And finally, the best way to avoid renter risk is to know past rental history. Simply knowing whether a renter, despite a credit or criminal score, has paid their rent to previous properties can help you avoid the risks of bad renters and ensure good renters are welcomed.

Second: risk transfer

Transferring the risk of residents who cause damage to their units is something that many property management companies are practicing as normal course of business. The onus is transferred to residents via mandatory renter’s insurance programs to cover renter property damage, whether accidental or intentional.

Renter’s insurance isn’t new – but ensuring compliance with mandatory programs can cause headaches for your property team. You shouldn’t have to spend valuable time tracking down non-compliant renters, and you shouldn’t need to scramble to temporarily cover non-compliant or vacant units from risk.

Effective risk transference tools handle non-compliance seamlessly and automatically, communicating directly to non-compliant renters, informing the property of program violations, and issuing temporary gap coverage for the unit, all without direct intervention from the site team.

Given the rising costs of building and maintaining properties, who can afford to risk an asset because of something that generally is out of the property management company’s control?

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By Rose Leadem

Source: Entrepreneur

A whopping 87.2 percent of women say that the biggest challenge in the commercial real-estate industry is equal pay, according to a recent study by commercial real-estate recruitment and staffing firm RETS Associates.

The study is based on a survey of 618 women in entry- to senior-level positions about their feelings towards gender equality in the industry in 2018. Sixty-five percent of survey participants said they were made aware of being paid less than a male counterpart at some point in their career, and furthermore, 75 percent of these women said it happened two or more times. Following equal pay, a lack of promotion opportunities (79.2 percent) and feelings that their opinions are not as valued as their male counterparts (79.1 percent) were the other top concerns of women in this industry. But there is a sense of optimism throughout the commercial real estate field.

“The days of commercial real estate being an ‘old boys club’ are over,” said Jana Turn, principal at RETS Associates, in a press release. “Women are more empowered than ever before to stand up to discrimination, but change must come from the top and currently there aren’t enough women in leadership positions.”

When it comes to getting a new job or being promoted, 61 percent of participants said they felt they were passed over for a new job, assignment or listing because of their gender — and 82 percent said it happened more than once. Unfortunately, it’s not easy to speak up when facing tough challenges such as these, and a majority of women don’t. According to the study, nearly two-thirds did not take action after being bypassed for a job due to fears of losing future opportunities, poor treatment from leadership and damage to their reputations. Of the remaining women who did try to take action, only 28 percent actually brought up the issue with HR while others just looked for other jobs or even resigned.

Whether unconscious or conscious, gender biases must be brought to the forefront and that’s especially true for a major industry such as commercial real estate. In 2017 alone, commercial real estate accounted for 7.6 million jobs in the U.S., contributing $935 billion to the economy, according to RETS.

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By Rick Grossmann

Source: Entrepreneur

Recently, I have had several clients ask for some real estate tips and strategies, so I joined forces with my Franchise Bible co-author, Michael Katz, to develop a series of helpful articles. Katz is a franchise, business and real estate attorney and has been working with landlords and tenants for over three decades. This article covers the basics of square footage and triple net.

If you want to open a brick-and-mortar location, negotiating a real estate lease will be an integral part of your startup checklist. Like so many contracts, there are no “form” or “standard” leases, and a landlord can fashion any contract that it wishes. All of the leases, however, contain legal terms that are incomprehensible to the entrepreneur. The definition of a square foot is just one such term.

A square foot

Easy, right? A square foot (often shortened to “sf”) is a unit of measurement that describes a square that is 12 inches on each of its four sides. So, when is a square foot not a square foot? When it is a “Rentable Square Foot” or a “Usable Square Foot”. The Building Owners and Managers Association International (BOMA) is a recognized leader in all things having to do with building measurements and provides us with insight. Thus, a tenant’s Usable Square Footage is the actual amount of square footage of the premises leased. In turn, this is measured from wall to wall and includes closets, bathrooms located exclusively within the space, columns and other support structures (even though you cannot use such square footage), storage space and the like.

The Rentable Square Footage of the tenant’s premises is defined as the Usable Square Footage plus a portion of the common area. That portion of the common area associated with the premises is calculated by multiplying such Usable Square Footage by a fraction the numerator of which is the usable square footage of the premises and the denominator of which is the total usable square footage of all of the spaces available for lease. For instance, if the usable square footage of the common area is 300 sf (consisting of, for instance, a common hallway and waiting area) while the tenant’s premises is 300 sf and the total project is 1,200 sf of Usable Square Footage, the tenant’s obligation is determined by the following calculation: Tenant’s proportionate share of the common area = 300 x 300/1200 or 75 sf. That means that the tenant’s Rentable Square Footage (sometimes identified as “rsf”) will be 375. Thus, the commercial lease may require the tenant to pay rent on 375 sf instead of just 300 sf.

By Rebecca Lake

Source: U.S. News

Source: Forbes
By Susan Tjarksen

Technology is offering efficiency, knowledge and timely information. Through the adoption of technology, brokers can be trusted advisors at the table, rather than transactional agents. It’s the role of a broker to provide liquidity, transparency and the highest return on a property.

Residential real estate brokers — think single family homes — quickly adopted technology as a symbiotic partner while commercial real estate has lagged. Today, embracing technology will propel savvy commercial real estate firms ahead and leave those slow to adopt new practices chasing the curve. Technology will most certainly have a significant effect on the business of commercial real estate brokerages.

Like individuals in many other industries, real estate professionals and brokers especially have been reluctant, skeptical and worried about adopting new tools that could seemingly put them out of work. Think about stockbrokers: Their current day-to-day operations are totally different from what they were doing 20 years ago, but their jobs are also now enhanced and more efficient because of technology. And it’s not like they’ve lost their jobs due to technology, quite the contrary. Technology has supplemented their fiduciary role to clients, their relationships and their market knowledge — now, they’re better brokers because they have embraced the role of advisor in its truest sense. These same reasons apply to commercial real estate brokers and why technology will only strengthen their work without endangering their careers.

Relationships

Technology will help brokers spend less time working on transactions and more time providing advice and building stronger relationships with clients. We all know that technology increases the number of eyeballs on a listing; however, converting those site visits to offers and navigating rounds of offers and due diligence requires a relationship and communication between the buyer and the seller. The relationships needed for these roles is a skill that brokers cultivate over time and something that technology can’t replace.

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Source: GlobeSt.com
By Brian J. Rogal

Not so long ago, most commercial real estate firms were behind their counterparts in other industries when it came to fostering diversity. But a sea change has come over the real estate industry, and most firms have decided that to fully succeed in the modern business world, women and minorities have to play a bigger role in deal making and other operations. At the same time, a new generation has flooded the workplace, and companies need to change their use of office spaces and methods of working to attract and retain these new recruits. As a result, modern commercial real estate firms don’t resemble the companies of the past, but these changes have made it easier to succeed with clients, many of which have also put more emphasis on diversity.

“We have a purposeful approach to recruiting,” Mary Bilbrey, chief human resources officer, JLL, Americas, tells GlobeSt.com. “We are sourcing talent from a broader set of companies and schools.”

“Some of our clients are absolutely champions in this way,” and have their own diversity programs, she adds, especially those in the larger markets. In fact, the company has found that there is a strong correlation between using diverse teams to pitch its services and winning someone’s business. “We’ve even been asked by some of our clients to share our ideas on how to drive diversity and inclusion.”

Bilbrey, who has been on the job for about two years, says JLL now trains its human resources teams to recognize confirmation bias, an innate tendency to respond positively to certain bits of information about candidates, even before any interview takes place, especially if the interviewer has similar traits. These could include what college they attended, family background or other life experiences. Left unchecked, such bias can result in the hiring of candidates who look a lot like the human resources department and sabotage efforts to diversify.

JLL also created recruiting pods that focus their attention on one particular segment of the business. This way, recruiters gain a deeper understanding of the skill sets truly needed by candidates and hire on that basis rather than whatever unconscious biases they may bring to the table.

The company has also adjusted the tasks handled by some recruiters. Instead of everyone doing end-to-end recruiting, some now focus exclusively on sourcing. That is, building relationships with organizations, including schools, black MBA associations, veterans’ organizations, women’s groups and others, that helps build pipelines of highly-qualified candidates.

“We’re connecting with the right people,” she says. JLL has seen a dramatic improvement in the efficiency of its hiring, including more applications coming in and a 96% acceptance rate when it offers someone a job.

And a more active women’s business group within JLL has helped build the capacity of its growing female workforce. The group has been around for a while, but in the past few years some voiced concerns it was too focused on social activities. Today, however, it puts more emphasis on fine tuning members’ business skills, including how to present yourself or how to set up a proper social media page.

These approaches have gotten results. Bilbrey says 68% of the firm’s recent new hires in key roles were either women or minorities. There has also been a 7% increase in high-ranking female officers just in her short time with JLL, and 44% of the non-director board seats are women. Furthermore, the corporate solutions division saw a 20% increase of new female hires year-over-year. “Our clients see that, and it’s important to them.”

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Source: Entrepreneur
By Joanna Schwartz

Whether tapping traditional funding sources or conducting online crowdfunding rounds, founders face a huge challenge when raising capital. Even highly active growth investors are hard to reach and harder to close.

Since startup investors are typically inundated with investment options to choose from, they can afford to be picky, fickle or both. That’s why it’s critical for entrepreneurs to showcase their capital raises in a manner designed to convert potential investors into actual shareholders. Modeling a growth-capital raise in the mold of commercial real-estate financing is one way to do that.

Raising capital in the commercial real estate (CRE) world is a different game than early-stage fundraising. Whereas an entrepreneur can pursue his or her company’s funding needs in tiered phases (seed, series A, bridge rounds) over the course of the business lifecycle, a real-estate developer typically needs to secure all of the debt and/or equity capital for a project up front, in full, before ever breaking ground.

CRE developers and sponsors often have to raise large sums very quickly from multiple sources at a time. To do that efficiently, they typically bundle up all of the information on a given capital raise into an all-in-one-package for investors.

Yet the effectiveness of the commercial real-estate-financing model lies beyond the convenience of a pre-packaged investment. Rather, it lies in the nature in which the inherent value of the investment opportunity is communicated to investors within that package.

Each of the following characteristics is common in, but not exclusive to, commercial real-estate financing, and how and why entrepreneurs should incorporate these qualities into their own fundraising strategies.

1. Transparency and disclosure

CRE sponsors are practically guaranteed to face legal repercussions if they fail to disclose a project’s inherent risks to investors. Plus, every commercial real-estate investor has a personal preference when it comes to risk: some like high, some like low. To help match their investment opportunity to the most motivated target audience of investors, real-estate-offering documents are loaded with intel on the feasibility and risk factors involved in each deal.

Entrepreneurs should pack just as much honest detail into their offering materials to help investors determine exactly how a startup investment will fit in their portfolio.

2. A focus on returns

For many investors, the appeal of commercial real estate lies in consistent, predictable cash flow. Knowing that earning “mailbox money” from CRE investments is a primary investor motivator, sponsors craft their offering materials to clearly showcase projected income, time horizons and returns.

To avoid being pinned down to investor expectations, entrepreneurs are often more hesitant to make authentic return projections in capital-raise materials. Ultimately though, numbers are king. A defined exit strategy is crucial to ensuring investors understand exactly how they’ll earn money from a growth investment.

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Source: Forbes
By Michael Polk

The retail industry has been experiencing disruption due to technological innovations that have pushed a growing number of consumers to mobile purchases and e-commerce transactions. In 2017, nationwide e-retail sales totaled over $409 billion. Amazon accounted for $54.47 billion and Walmart sold $14 billion in the U.S. alone. By the year 2021, forecasts for global e-retail sales expect the number to reach $603.4 billion (USD).

In tandem, local and national media headlines in the last few years have reported stories of major retail industry giants closing hundreds of brick-and-mortar locations due to steady declines in sales. Among the most notable retailers closing doors or filing for bankruptcy protection are RadioShack, Gap Inc., Kmart, and Toys R Us.

Across the commercial property board, access to information that was once limited to CRE brokers who paid fees for such data is now available to the general public for free. This has removed barriers between commercial real estate owners and prospective tenants.

For example, the website 42Floors provides office space rentals and commercial real estate listings for owners and prospective tenants. A fair amount of information is available for free, and a premium service lets licensed brokers access better-qualified prospective tenants. Some companies like CompStak and DealX implement a crowd-sourced platform by providing lease comparables for public usage, coupled with details like the tenant’s name, rent amount, length of lease and landlord concessions. Real Massive and VTS have even more comprehensive platforms, offering property listings, relevant market data, workflows and information to owners, CRE professionals and tenants.

These are just a few of the startups looking to transform commercial real estate through innovation and by making data transparent and ubiquitous.

Digital Disruption Is Affecting All Real Estate Asset Classes

It’s clear that technological innovation has affected many asset classes of real estate, including workspaces, retail shopping centers, distribution centers, offices and more. With an increasing amount of work and consumer purchases being performed from anywhere on mobile devices that have internet access, employees and consumers are transforming the way they do their jobs, purchase goods and services, and live. Retail stores are reorganizing their traditional infrastructure from a decade ago to better compete with e-commerce giants such as Amazon and Walmart.

Because of the amount of information consumers are able to access, change is taking place in the retail industry. Retail store owners, commercial brokers and staff are no longer the ones with absolute power. Consumers are not taking a back seat anymore and the ramifications for the commercial real estate industry cannot be taken lightly.

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Source: Forbes
By Evan Gentry

Despite fears of trade wars and increased protectionism, foreign investment in the United States remains robust. In fact, the U.S. continues to be the single largest recipient of foreign direct investment (FDI) in the world: more than $450 billion was pumped into the U.S. economy from other countries in 2016, according to the Bureau of Economic Analysis at the Department of Commerce.

A significant amount of this capital is flowing to commercial real estate (CRE), which continues to be the sector of choice for many foreign investors. International investors have purchased more than $365 billion in U.S. CRE since 2010, with the majority of capital flowing to the largest metropolitan regions. Manhattan alone represented nearly a fifth of all foreign investment in U.S. CRE in 2017, greater than the next three markets combined.

These inflows to the sector may only be the beginning. A growing U.S. economy should continue to drive more demand for commercial property.

Why is there so much interest in U.S. commercial real estate?

Real estate has long played an integral role in global investors’ portfolios, but recently U.S. CRE has separated itself from other subsectors within the class. From a top-down perspective, the U.S. market, which has largely recovered from the financial crisis and is fueled by strong job creation and business expansion, is viewed as stable. The market compares favorably to regions such as Europe, where the economic turmoil caused by Brexit has turned off many would-be investors.

From a micro perspective, U.S. CRE offers the potential for higher returns relative to the modest prime capitalization rates in London and parts of Asia. At the same time, the U.S. market is renowned for its scale and liquidity, providing foreign investors the flexibility to exit their investments if they decide to invest their capital elsewhere.

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Source: Business
By Ricky Nila

When the Great Recession hit in 2007-2008 traditional banks and credit unions changed their lending standards.

They made it very difficult for small business owners to get funding.

Alternative lenders stepped in to fill the void. They helped small business owners when the banks would not. We took a look at the 4 factors alternative lenders use to provide small business owners with the funding.

1. Credit Score

As a small business owner it is important to keep your personal credit score as high as possible. Small business loans take into consideration the personal credit score of any business owner with 20 percent or more interest in the company. With todays alternative lenders, a borrower can get a loan with a credit score as low as 500. The best rates will be given to borrowers who have a credit score of 720 or higher.

Borrowers with high credit scores can typically go into their local bank and qualify for a loan. Many still choose to use an alternative lender. This is due to the ease and speed of funding. Before alternative lenders became prevalent in the market place, small business owners without high credit were unable to get funding for their business. Today the same business owners can find funds.

Loans for low credit borrowers are usually in the form of an Automated Clearing House (ACH) or Merchant Cash Advance (MCA). The loans are based on the monthly revenue of the business bank account or merchant processing account. These types of loans tend to come at a high cost to the borrower. With rates has high as 80 percent APR.

Keep in mind when taking an ACH or Merchant Cash advance no matter how good your credit is you will still be paying a high rate. These types of funding should only be used as a last resort or if funds are needed immediately (within 24 to 72 hours) due to there flexibility and can be paid back quickly.

2. Time in Business

A business that has been operating for less then two years is considered a start-up. Start-ups generally are not eligible for a traditional bank loan. Banks typically require businesses to be operational a minimum of  two years before they will lend to them.

The alternative lending market place has changed the standard. Businesses that have been operating for at least three to four months can now get funding. The amount of money provided is based off the businesses monthly revenue.

The longer your business has been operating the more loan options available to them. A business that has been operational for more than two years will have the best chance at getting funding. These funds can be at a lower cost. After the two-year mark businesses will be eligible for more traditional structured term loans.

Businesses that have been operating less then two years will pay a higher APR. These small businesses are considered high risk and have limited options to choose from. Ideally you do not want to have to borrow money in your first two years of business. This will help you avoid paying a premium for any money borrowed.

If you must borrow funds, make sure the high cost will not hinder your operations from low monthly cash flow due to paying back the funds.

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Source: Entrepreneurs
By Steven Kaufman

Why should entrepreneurs invest in the first place? The answer is: to have enough money to live on when we no longer can or wish to work. To put that money aside, however, we have to accumulate enough to offset inflation and the taxes that erode our savings. And for that purpose, real estate is an excellent solution.

The great thing about real estate is that even in a bad economy, it will usually fare better than stocks. Land, after all, is a finite resource. People need a place to live, work, shop and play — so real estate is really just a matter of supply and demand.

What’s more, real estate will continue to appreciate despite occasional slow-downs in the economy. In fact, it’s proven to be the best way to create wealth, and an investor need not be a genius or a millionaire to succeed. Here are some tips, then, for entrepreneurs on getting started and succeeding in real estate investing:

1. Do — plan your financial goals.

Before you buy that first property, or do your first analysis, determine what you expect from your investments. What are your financial goals?  We often discuss the “time vs. money” concept: The more you have of one, the less you need of the other to reach your financial goals. This means that you shouldn’t shy away from taking the time to understand your goals and make sure each investment is a step toward achieving them.  If you are unsure exactly how to create financial goals, meeting with a financial advisor is an excellent first step.

2. Don’t — spend a fortune on books, tapes and seminars, then just put all that information on a shelf.

You absolutely do need to learn some basics before venturing into investing. So, be sure to do some studying, but don’t let “buying and collecting” information become your endgame. Again, having goals in mind will make the process much more straightforward. It’s easy to get so tied up in the “research” phase that you never actually take action. Instead, write down specific questions you want answered or goals you want to meet before delving into the latest book/seminar/etc.

3. Do — look at plenty of properties.

Don’t just grab the first property you look at. Too many investors buy properties because they “look nice,” or the investors don’t want to put the work in to look at what’s really out there. Remember, you won’t be living there, so don’t make your investment decision based on your personal preferences. While you shouldn’t fall into the trap of analysis paralysis, make sure you are thorough in looking through properties. Give yourself a wide range of options, then narrow them down based on the criteria (goals) you have set for yourself.

4. Don’t — postpone starting your investment program because you’re waiting for that perfect “unicorn” deal.

That’s the flip side to number 3, of course. Plenty of beginning investors suffer from “a-better-deal-may-be-just-around-the-corner” syndrome. This can backfire in a big way, and you could potentially let a great deal slip just because you’re holding out for something better. Your task may feel difficult if this is your first property, but you must realize that the “perfect deal” rarely (if ever) exists. Better to execute on a deal that meets most of your criteria than wait for another that may never come.

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