S.E.C. Real Estate Observer

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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?

Years ago, Steve Barker, Bob Zink, Bill Warr, and I decided we should climb MT. Rainer. During the indoctrination for the climb, Eric Simonson, a renowned guide who has made several assents on Mt. Everest, asked each of the thirty people in the group how they prepared. The answers were varied from running ultra marathons to one-hundred-mile bike rides, the stair master, and walking seven miles per day. With one exception, an Irish lad answered, “I’ve trained on Mexican food and pizza.” Somewhere around twelve thousand feet, unable to climb any higher, the Irishman was staked to the glacier inside his sleeping bag until the summit group returned for him. The next year, he was prepared and made the summit.

We study for tests and finals; workout before hunting trips, marathons, and ski trips. We prepare for speeches, lectures, and classes we teach. Many prepare for eternal life through prayer, church, bible study, etc. — but how do each one of us prepare for a meeting?

If you’ve had the opportunity to sit next to Mike Libster or Steve Barker, you begin to notice preparation. Color packages lined up on each of their properties. Trade Tracker offers written before the meeting and followed up on during and after the meeting. Back-up packages full of detail with maps, zoning, demographics, photos, and enough detail to entice the broker and client. Follow-up after the meeting via phone and e-mail. They are preparing to close a transaction.

They say that S…sells! Of course, I mean “sizzle.” Maybe you think you’ve prepared because you have a package in the book. I’ll admit it’s a start, but what have you done to peak the interest of those in the room? Why must we have this property? We understand you or the client have a problem. If you have a need identified, “I need a new loan,” the property should be in a have-want session. We all stand up and talk about “features” such as how the property’s zoned. Being zoned means nothing; I’m not from East Timbuktu where the property is located. Give me the “benefit” — it took five years to get the zoning at a cost of ten million dollars and it is the last piece of land in the state to receive said zoning, and the client will sell for a million dollars and it’s worth $10 million. Now you’ve got my interest.

In your preparation, think about the time value of money. How much is your time worth? At one million dollars per year, your time is worth $500 per hour. If we have one hundred people in the room at a typical SEC meeting at an average rate of three hundred dollars per hour per person, that’s $30,000 per hour. We double that number because we are only doing production about 50% of the time, add the meeting cost, travel, hotel, and an additional day or two getting to and from the meeting and we begin to see that the cost of a six-minute podium pitch is approximately $10,000. How much thought (preparation) do you take before you write a $10,000 check? Remember, not only are you spending your money, but also the money of everyone else in the room when you go to the podium.

How much thought did you give to the package, your time, and the others’ time in the room before the meeting? Too often we hear packages pitched that should not reach the podium and God forbid we have two similar packages in a row that are small equities, single-family homes, or small subdivisions. When we do, the participants lose interest and often it is hard to get them back in the room or back on track. It is our individual responsibility to be prepared and not waste the time that some other participants may need. We are all part of the problem and at the same time the solution. As the Boy Scout motto says, “Be Prepared.”

Does your presentation from the podium have “sizzle?” Does it have benefits? Is it worth presenting to the high-priced talent in the room? Does it have enough of a fee to warrant a podium presentation or should you be making offers with the vehicle or using it during a quick pitch or as a can add?

Help the moderators help you. Be prepared for pre-moderation! If pre-moderation of packages is not being done at a particular meeting and you have a difficult package, ask the meeting manager to assign someone for pre-moderation. We all want to hear about “benefits,” not “features.” Benefits are, what does the package do for me? It has upside. How much? How long will it take? What’s the risk? The annual cash flow? The IRR? Be prepared to make us want to know more about the property, people or circumstance. Open up your thinking! How well have you counseled the client? How much have you opened up their thinking? Or, have you just taken an order and listened to what the client initially said without expanding their thought process?

Allow Trade Tracker to help you counsel the client. Take the offers you have written and the offers you have received and use those offers to open the clients’ thinking. Then take the offers that were written in on the properties you wrote offers on, plus the offers on the properties who wrote in on your property. Think multi-leg! Expand the client’s thinking and “prepare” them to make a transaction. Even though your client has said cash only, they will do something else; be prepared to be surprised at the alternatives once you prepare them to make a transaction. Situations change! Even though you’ve been given your marching orders, things can change in the blink of an eye. A loan doesn’t get renewed, a tenant goes bankrupt, illness or death in the family, estate planning, a bad quarterly profit report, etc., etc. How long has it been since you checked the client’s situation — 30, 60, 90 days?

Sometimes we’re our own worst enemy! Recently, we fired a brokerage company that had an industrial listing of ours for eighteen months with no activity. The week after we hired a new broker, the old broker brought an offer from the next-door neighbor! How long had it been since the old broker canvassed the neighborhood? Both sellers and buyers’ circumstances change.

In case you haven’t noticed, it’s not “business as usual.” Be Prepared! Next time you’re asked if you’re prepared for the meeting, your presentation, or your quick pitch, the answer should be “Prepared?…Hell, yes!”