What’s Your Commercial Real Estate Dealmaker IQ?

Published: 04th January 2007
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In the commercial real estate industry, it's helps tremendously to be considered a dealmaker. If you have this reputation, it's like having money in the bank.

But it is a reputation that has to be earned.

Most professionals and investors try to establish this reputation by talking the talk, but they don't quite walk the walk. Today, you are going to learn how to walk the walk.

After spending a good many years in the commercial real estate investment arena, I have become pretty adept at spotting the "real McCoys"-people who are the real thing. And there are certain things successful dealmakers do consistently.

Here are ten qualities of a successful dealmaker which separate them from the also-rans:

Top Ten Qualities of a Commercial Real Estate Dealmaker

• Quality #1: Dealmakers are KNOWLEDGABLE about the markets they want to pursue, their personal and corporate financial wherewithal in cash and credit, their property profile and criteria they are looking for in a potential investment property and how to get deals done. The best thing is they know is how to make a decision and take action on an investment property.

• Quality #2: Dealmakers live and die by a deal's numbers. They know how read financial statements and what the numbers REALLY mean. They use lawyers and other financial professionals to help them analyze the deal to determine whether it is viable.

• Quality #3: Dealmakers may like to do deals, but they also know researching their market is critical to their success. They know their criteria and are prepared to invest the time and resources to see whether a deal is workable. They don't waste time looking at properties that don't match their criteria.

• Quality #4: Dealmakers have their financial house in order. They have glowing bank references and a solid gold track record. In other words, they are credit worthy. They know it is essential to maintain strong lending relationships, can bid on an all cash property, or can take over the existing debt of the seller.

• Quality #5: Dealmakers know managing and improving a property once it is in their possession is more important than how good of a deal they structured. The deal is only one single part of the profitability equation.

• Quality #6: A dealmaker will always look at more than a year's worth of financials and other operations documents. Because they know a single year's worth only tells one part of the profit story.

• Quality #7: Dealmakers rely on their own efforts regarding the management and improvement of a property, rather than assume they can only do as good as the seller. That's why they use a normalized, forward-looking projection (rather than using the seller's previous valuation on the operations).

• Quality #8: A dealmaker like to leave all his options open and available. Having a single investment strategy is not something a dealmaker would endorse. In other words, they attempt to structure a customized offer to meet the seller's needs, rather than attempt to shoehorn a deal structure they are comfortable with into every situation.

• Quality #9: Dealmakers rarely negotiate for every last nickel. Because they know it's their own performance after the sale that will have the biggest impact on profitability, cashflow and equity.

• Quality #10: Dealmakers have a strategy and a master plan for every investment. They won't go into a deal without knowing they have a sound, proven profit-making plan and a solid exit strategy.

These are ten qualities and attributes every dealmaker I have met lives by. They increase wealth, eliminate risk and overall create a strategy for success using commercial real estate as their primary investment vehicle.

I highly recommend you begin to adopt this mindset in everything you do when it comes to your commercial real estate investment endeavors-it will pay huge dividends.

Tony Seruga, Yolanda Seruga and Yolanda Bishop of http://www.maverickrei.com specialize in commercial and investment real estate. As of May, 2006, they and their partners are managing over $600 million dollars worth of new projects.

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