S.E.C. Real Estate Observer

Able walked into our office to hear about how to exchange. He had bought a promotionally sold lot in a distant “recreation” development on terms a few years back. He paid $11,500 for the lot and still owed $7,218 and was paying $115 per month including 7% interest. A quick check of its sale value found the lot would sell for $4,500, more or less, so Able had a negative equity (not uncommon in today’s market), although no one discussed those facts with Able.

It is my observation that the typical commercial brokerage company has within their stagnant exclusive listings many potential transactions. However, many brokers don’t seem to be able to find them so they spend hours cold calling for new products and clients.

Because of difficulties many brokers are having during this monetary mishap, the Real Estate News Observer is devoting much of its space to Money Making Ideas, Improvement in Marketing Meetings to Increase Closings, and related matters. Brokers looking for more advanced articles are asked not only to bear with us, but also to submit their suggestions to help their fellow brokers with less experience.

I have heard Mark Johnson, S.E.C., ask me more than once, “You know what that’s a sign of, don’t ya? The way things are!” That pretty much sums up the current status of the market we are living in and with today. Along those lines, we need to figure out ways to not only survive today, but to thrive today and prepare for future success.

Throughout human history, people have always liked a good story. Our admiration of a person’s achievement in overcoming great adversity often makes a good story great. A tale with the greatest adversity is often viewed as an epic.

There are many things an apartment owner can do to improve the bottom line in apartment operations. They fall into two broad categories: (1) increasing income and (2) reducing expenses. Some of the suggestions listed below fall into one category or the other, and some actually apply to both.

When I asked other S.E.C.s how much they prepared for a meeting, the response I got most often was “Preparation…Hell, I’m too busy ‘to prepare’,” hence, Preparation…H. As I look back at my thirty years in the Society, I’m in the same boat. We are all running hard and fast between business, family, and life in general, but how much time do you actually spend preparing for a meeting? How do you prepare?

1. Evaluate the Overall Market. [a.] Frequently, a problem with a hotel is not isolated to that hotel itself. The overall market has been impacted [...]

The client is desperate to transact the listed property to get off of the loan payments and get enough cash to solve some other issue. The listed price is $600K, but the current market will only bring $500K and the client is still in yesteryear on values. The loan is $350K. An S.E.C. broker knows that there are many ways to get people to their objectives over the resistance of advisors, lenders, third party influence, etc. One solution is to disguise the fall in value and avoid the seller’s lack of reality.

My Dad, a depression baby, used to tell me, “Boy, if you are not moving forward, you are backing up.” At no time in my life has this been truer than the last two years. The capital markets are in a shambles, residential real estate values have gone down by up to 50% in parts of the country and commercial real estate is about to realize huge resets.