How to Win the Commercial Real Estate Acquisitions Game

Syndicated Post By Jeremy Cyrier

An investor called the other day and complained, "I've talked to a bunch of brokers, but can't find the deal I want. Can you send me a list of what you have for sale?"

We sent our list and asked the investor what he wanted. He said, "You know, a good deal. Something that makes sense. All I'm seeing out there are opportunities that are either overpriced or gone before I had a shot at them."

If you're an investor, here's some bad news. Investors call our office, make the same requests, get a list of what's on the market and complain about the unavailability of deals. We offer to talk through the requirement, but most say they're happy calling brokers because they'll get access to more deals that way.

Maybe, but aren't you just looking for off-market deals in on-market locations?

Remember, sellers hire brokers to represent them in the sale of their property. They want the advantage of exposure to the largest audience and to sell their property for more than they could on their own, which means when you're calling brokers, you're talking to the people that owners want you to.

Out of our own interest as an owner advisory firm, please keep calling brokers. We encourage it and we like the calls. It makes our owners happy because it proves that we're giving them great exposure and will eventually sell their property for the best price.

There are some investors, however, who refuse to limit themselves to the brokerage world. For those who choose to go off-market, we won't lie to you. It's hard work and it costs money, time, and energy.

One client came to us and required an industrial building in the greater Boston 93/128 interchange market. Out of 50 potential properties in existence, we sourced 6 sites that could be purchased, and the client selected 3 to seriously consider. Of the original 6, 20% were listed for sale by the owner or with a broker, while the rest of the properties were off-market.

The trick to sourcing and winning the acquisitions game is to know what you want, identify where it exists, and then work through the market one commercial property at a time until you find the motivated seller willing to work with you in a transaction. It's not difficult. It just takes time and energy to stick with program until you get the results you need.

Jeremy Cyrier, CCIM believes that actions without meaning are worthless. He is the President of MANSARD, a Massachusetts commercial real estate marketing and brokerage firm and is a member of the CCIM Institute faculty. You may reach Jeremy at Jeremy@Mansardcre.com or at http://www.masscommercialproperties.com.

Article Source: How to Win the Commercial Real Estate Acquisitions Game

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Why Commercial Real Estate Is Not a Hammer and Nail Business

Syndicated Post by: Jeremy Cyrier

You've heard the expression, "When the only tool you have is a hammer, everything looks like a nail." When you have one formula for capitalizing on commercial property investments, you try to make your deals work one way.

A broker called to ask how we sold a commercial property investment he had competed against us to list. We sold the investment for 35% more than he estimated based on his review of the property's numbers. It didn't add up.

He took the owner's gross income, subtracted the vacancy/credit loss and operating expenses to derive the net operating income. He applied a market cap rate to the deal, derived the commercial property's income value, made his recommendation and hoped to be hired for the listing.

They didn't like his price.

Here's why his hammer didn't work:

The owners were debt-free on this specific commercial property.
There were 3 stakeholders hoping to sell the investment for an above market value.
Cash flow was important to one because she was retiring during the sale.
The debt market was frozen and deals were difficult to finance.
One of the owners sought to pay off a primary residence mortgage with the sale proceeds.


After our stakeholder interest analysis, we presented a solution to the owners that allowed them to convert their equity to cash flow with an installment sale. To achieve above market value, we sold the commercial property with below-market financing terms that gave the new owner ample cash flow to operate the property, pay his annual debt service, and time to secure new financing once the property was stabilized at its highest and best use.

The recurring cash flow supported the owner looking for a retirement income. We bypassed the debt market because the sellers carried the paper. And we required the new owner to make a 17% down payment, which extinguished the other owner's mortgage obligation and paid for the cost of sale.

If you haven't done an investment deal lately or are having trouble finding the "right" opportunity, start by looking at the property investment strategies you've been using. Is there a pattern in your deals that could be your hammer and nail?

To get different results, you have to try different things. Put your hammer away and ask questions in the deals you're considering. You may find new information and new opportunities that will become new ways of making your investment goals come to fruition.

Jeremy Cyrier, CCIM believes that actions without meaning are worthless. He is the President of MANSARD, a Massachusetts commercial real estate marketing and brokerage firm and is a member of the CCIM Institute faculty. You may reach Jeremy at Jeremy@Mansardcre.com or at http://www.masscommercialproperties.com.

Article Source: Why Commercial Real Estate Is Not a Hammer and Nail Business

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Are Mobile Home Parks A Good Investment?

By Jo Amick

Mobile Home Parks- Substance over Looks?

As an investing strategy, mobile home parks are not known for their glamour (looks), but for their cash flow (substance!). It's amazing how we can overcome our apprehension and hang-ups when it comes to investing in a mobile home park when faced with a great investment opportunity. Now, there are some beautiful mobile home communities; fantastic landscaping, paved roads, new homes that are well-kept. But that's more the exception than the rule.

I have learned that mobile home parks are among the many great real estate investment opportunities out there. As an investor if you have preconceived notions about certain properties, you could miss out on a great deal. This reminds me of a conversation I just had.

Recently I was speaking with someone I used to repair the HVAC at a rental property, and he was sharing a story about a friend of his who had the opportunity to buy a mobile home park, and asked Charlie if he would like to go in on it with him. Charlie hesitated and then declined the offer, thinking he did not have several hundred thousand dollars to invest, and was not exactly thrilled at the prospect of owning 'trailers'. The investor decided to go it alone and buy the park himself. All I knew of the details was about 20 plus units. He did call Charlie later to tell him that the seller was highly motivated, and he got the whole park for about $40,000. At this point, Charlie- not knowing any of the numbers (OE, NOI, upside potential anyone?) was already kicking himself. "If I'd have known that, I'd have written him a check for 20 grand on the spot!" were his exact words to me.

What changed his mind? The price, of course! That mobile home park looked at little shinier, a little brighter at that price! And although you never know a deal until you really look at the details. I thought he was probably right in that he had made a mistake.

So what's the moral of the story? Never mistake Substance by going for Looks. As an investor, the key is in the numbers. There are a lot of incredible deals out there, and you have to keep your eyes and ears open to catch them. Don't let your built-in biases hold you back. You could miss the opportunities that can change your life.

Jo Amick invites you to learn to earn high and even INFINITE returns investing in commercial real estate with a group (on money you used to have sitting in pathetic CD's at 4% or less) when you become a Select Member with America's #1 Real Estate Network today! Join us for an upcoming educational presentation online to get information or to get started now: http://www.hisrealestatenetwork.com/713

Article Source: Are Mobile Home Parks A Good Investment?

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How to Win at Commercial Real Estate Negotiation

http://www.sxc.hu/profile/Mattox

A Syndicated Post By John Highman

Commercial real estate is a category of property that is structured around income performance. It is the lease that provides the stability to the income performance. When you get the lease correctly structured and agreed, the property will be a performing asset. Poorly leased properties with random lease documentation on average achieve lower sale prices when purchased by an investor.

If you are a property investor, you will be very interested in the structure of the relevant property lease and the stability of the sitting tenant. If you are a real estate agent, it is important that you develop lease controls and processes that optimise the tenancy outcome for the landlords that you serve.

The lease on a property will impact the cash flow for many years, hence careful control and decisions are part of the process.

To lease a commercial property, it is not just a matter of making decisions regards rental and lease term. The critical elements of the lease document will include important points such as:

1. The type of rental paid is actually more important than the level of rental. This rental type can be gross or net rental and the recovery of outgoings from the tenant will be impacted by the choice of rental. The net income for the building is driven from the decisions taken by the landlord in this regard.
2. The initial lease term should be carefully considered and this is done at the commencement of the lease when the tenant is found. Usually this lease term will be a number of years based on the negotiation between the tenant and the landlord. In most property types, it is not desirable to have lengthy lease terms which restrict the landlord from future property decisions. This has to be balanced against the landlord's requirement to do the lease deal in the prevailing market at the time. A landlord should always retain control over the asset and not randomly give lengthy lease terms without careful consideration on the future of the investment property.
3. An option for a further lease term. Many tenants prefer and seek to have an option for a further lease term. This gives them stability in the business operation. It does however restrict the landlord from future property decisions and any associated strategies such as redevelopment or refurbishment. This then suggests that the option for a further lease term should not be given without careful consideration.
4. The incentive given for any initial lease term may exist and may vary by type. When property markets become less active or frustrated by the economy, tenants will ask for an incentive as part of taking up a lease; the landlord will have little choice. The incentive can be a variety of methods including cash, landlord fit out, reduced rent, or rent free period. The choice that the landlord makes is largely dictated by the impact of the incentive on the landlord's taxation position. For example, a landlord funded fit out may be an item of expense which may create depreciation under local taxation laws. The landlord needs to check this out with their accountant. It could be that the landlord will see the depreciation as more useful than a rental reduction or rent free to the tenant.
5. The permitted use for the premises should be clearly outlined in the lease documentation. What you should be seeking to do is control is direct the way in which the premises are used. This is critical when it comes to future occupation and potential assignment of the lease. It is to the landlord's advantage that the property is used specifically for an agreed purpose. This then prevents any conflict with the tenant mix in the property. When the tenant mix is poorly controlled, it will impact the rental and destabilise the property. As you would expect, this is critical in a retail shopping centre.
6. The outgoings recovery is of concern to the landlord and the tenant. The outgoings that are recovered from the tenant should be clearly detailed in the lease document. When a property is sold in the future, the recovery of outgoings will be of great interest to the buyer of the property. They will be seeking to maximize their net return and recover as much from the tenants as possible.
7. The controls imposed on a tenant during fit outs are important if you want happy tenants in the building. When a fit out is commenced for a sitting tenant, it is in the landlord's interest to control the trades people on site and the approval processes for the fit out works. This will allow the landlord to achieve the quality of fit out construction that complements the building whilst not upsetting other tenants in close proximity. Part of this will be the due regard to the structural drawings and design of the building. Any tenant fit outs should be approved by the landlord before the works are commenced. It may also be that the local planning authority should approve the fit out design and drawings before they are undertaken.

John Highman is an expert in investment real estate strategy, property performance, and tenant mix analysis and strategy. He is an author and coach that helps property investors, and real estate agents improve their retail, industrial, and commercial real estate opportunities and targets.
John has specialized in major commercial, industrial, and retail property for over 30 years. He knows what works and what doesn't. He gives you the 'good oil' on getting active and achieving results.

You can get John Highman's free tips and tools in commercial, industrial, and retail property at http://www.commercial-realestate-training.com

Article Source: http://EzineArticles.com/?expert=John_Highman 

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Getting the Real Truth in Commercial Property Inspections

Syndicated Post

By John Highman

When looking at a new commercial or retail investment property for the first time, it is wise to have some form of checklist and system which assists you in the process. We have created this checklist to help get you on the right track.

When inspecting the property is almost like having your own due diligence process underway. Do not believe everything you see and certainly investigate anything of question. Anything of importance that someone tells you about the property should be investigated.

Having a keen eye for property detail and a diligent record keeping process as you walk around is the only way to inspect investment property. It is remarkable how these records have to be revisited at a later time for reassessment.

So let's consider the following as some of the basic issues to review in your property inspection process.

1. A copy of the land title records is fundamental to your inspection before you even start. As part of this process, also seek out a copy of the survey records and any existing leases or licences. Also seek out any unregistered interests that may not appear on the title to the property. If in doubt seek a good property solicitor to help.
2. Take care to understand the location of the property boundaries and look for the survey pegs relevant to the survey plan. If in doubt seek a good surveyor.
3. Within the property land title there can be a number of easements, encumbrances, and other registered interests which need fully investigating. These interests can impact the price that the property achieves at the time of sale and can also impact of the method of lease occupancy. If any registered interests exist on the property title, a copy of the relevant documentation is the first stage of the investigation which should then be followed by questions.
4. Local council records may also have impact on the property. Are there any orders or notices that have been issued or are outstanding on the property, and can these things be of concern to the potential investor?
5. The zoning for the property and the zoning activity or changes in the precinct can impact a property. As part of this process, it is wise to include neighbouring properties and inspect them to ensure that they have little or no effect or impact on your subject property.
6. Copies of the local town plan will help you understand current planning issues. A discussion with the local planning office or planning officer can put you on the right track and explain any current issues or matters that may arise. In this process, it is wise to keep records of the discussions and the findings.
7. If copy of lease documentation is available for neighbouring properties then seek it out and review it. It is always good to know what the neighbouring tenants are doing and how long they will be there.
8. The local topography and plans across the immediate area will help you understand the fall of the land and the impact of any slopes and natural drainage. Look at the location of any water courses and flood plains. Seek out the history of any flooding in the area.
9. Supply of electricity into and across the area should be understood. If your property is an industrial property then the supply of energy to the property will be strategically important to any industrial tenant. If any easements or encumbrances exist across the property for electricity, then seek to understand the rights and obligations that these documents create on the property owner.
10. Services and amenities to the investment property will impact the future operations and interest from the business community. To the question to ask here is the nature of these services and amenities and whether they are well maintained.
11. Look for changes in road and transport corridors that impact the property or region. Any change in roads can dramatically shift the way in which property is used.
12. Look for the location of public transport and its potential to enhance your property function. Many businesses need stable and frequent public transport to help employees access their jobs.
13. Look at the community and business demographics of the region. The growth patterns for the last 5 to 10 years will help you understand the future of the property.
14. Other property valuers in the area are a good source of market intelligence. They can usually tell you the history of the area and the current business sentiment. Rental levels, incentives, and sale prices per square metre are valuable elements of market intelligence. They will all have impact on the yield that the property presents to any property investor.
15. Look around the area to see how many other properties are currently available for sale. Seek details of these properties and the prices being sought. If these properties have been on the market for a long time it will give you an idea of just how acceptable the regional prices and business sentiment is at the time of your inspection.
16. Look around the area to see how many properties are currently vacant. With reference to each particular vacant property, get details of the rental being sought and the time that the property has been on the market. You will need to form their own judgment on whether these rentals are relevant and reasonable in the current marketplace.
17. The supply and demand of vacant space by property category is an investigation to be undertaken in the region. What you want to know is exactly how much space is coming into the market in the future and how much space exists now for tenants to occupy.
18. Check out any new property developments that could be in the early stages of consideration and development approval. The key question here is the impact that these properties may have on your property.
19. The history of the area is always of high value to you. In commercial, industrial, and retail investment property, the history that you are after is the last five years. It is remarkable how much information you can glean from regional property sales and rental trends. Given that commercial and retail investment property works on the cycle of rise and fall, it is the history that can open up your understanding of what's been going on and where things are headed.
20. With any property investigation, and particularly with properties that are complex and large, it is wise to seek out the comments of architects and engineers. What you need them to do here is comment on the structural integrity of the property and its future usable life. Also seek to identify how the property may be expanded or refurbished when times require.
21. Chase down the tenancy schedules for other properties in the area. Whilst these are not always easily obtained, they are of high value. They will tell you so much about the activity in other properties and buildings that may impact your future leasing strategy or property sale. What you do not want is a significantly high vacancy factor near your property when you are trying to lease it.
22. Review the local precinct for the larger businesses and how they operate. In doing this, you can understand who are the major business players and the major employers. Having these companies in the area is good thing, but losing them can be a major threat to the region. We call this the business stability factor. It should form part of your investment property assessment for the future.
23. Review the other major tenancies in the area and see how they operate. They can both stress and enhance the area depending on how they operate and the times of day that they do so. Of prime example is a transport company that has vehicle access peaks at certain times of the day. This can challenge the other businesses in the area and how they operate.
24. Walk around the precinct and the property taking many photographs for later investigation. It is surprising how useful photographs become for the reassessment of the property inspection. Walking through the streets in the region allows you to get a feel for the function of the streets and the neighbouring properties. It puts you in greater perspective for the services and amenities, and the function of all local surrounding businesses. A tip in the keeping of digital photographs for later evidence is the reversion of the important photos to 'gif' type files. This format is not easily changed and therefore more stable as court evidence of critical matters.
25. Knock on the doors of the other local businesses and talk to them about how things operate locally for them. Other tenants and businesses in the region will tell you so much and put you on the track of challenges and problems in the region.

Inspecting the commercial investment property is very much a physical process. In only this way can you completely connect with the property function before you form an opinion of its suitability for your plans, pricing, rental, or occupancy.

John Highman is a prominent investment real estate speaker and coach that helps property investors, and real estate agents globally to improve their commercial real estate property performance. He himself is a successful real estate agent that has specialised in major commercial asset sales and leasing for over 30 years.

You can get John Highman's free tips and tools in commercial, industrial, and retail property at http://www.commercial-realestate-training.com.

Article Source: http://EzineArticles.com/?expert=John_Highman

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Commercial Real Estate Success - The First Step

Syndicated Post by Darin Garman Platinum Quality Author

"The gem cannot be polished without friction, nor man perfected without trials." -- Chinese Proverb

One of the things to help you reach your commercial real estate and your wealth goals in the next year is really decide which track is best for you at your current place in your "investment life."

I have a lot of investors contact me with the same question, especially in recent months...

"How do I get into some great commercial real estate properties that will start building my wealth ASAP?"...Or something to that effect.

First, decide what your track is. What do I mean by track? I mean deciding how to proceed based on where you are AND what your expectations are.

Be realistic with this and schedule some time to work on planning for your wealth goals this year. If you are reading this article, I can guarantee you have heard 1,000 times to write down your goals. But I would make another suggestion that is critical to your success - write down what you DO NOT WANT from your investment business.

For example, on my list I have the following items:

I do not want a large amount of unnecessary overhead expenses.
I do not want to be a "hands on" landlord.
I do not want to be involved in the day-to-day property management operations.
I do not want a large number of employees.

You get the picture. What you will find is identifying what you DO NOT WANT is just as important as identifying the goals you want to achieve.

The reason this is so critical is if you choose a wealth goal that violates one of your "DO NOT WANT" list items, you will not achieve it. Many investors fall prey to what I would call 'other people's goals" - whether those be of a spouse, business partner, or friend. I have even seen very experienced investors make this mistake.

Make sure you include these items in your planning:

1. Make a list of "DO NOT WANT" items for your commercial real estate business.
2. Make sure your "WANT" list does not violate these rules.

This is one of the best way to get to your goals, faster. No question about it. So, decide where you really want to be and GET SERIOUS about accomplishing all you can in THIS YEAR. Remember, if you are not where you want to be at this point you have no one to blame other than yourself.

Do you want to learn more about investing in commercial properties? Click the link below for my FREE 7-Part Investment e-Course. I'll also send you my FREE special report and teleseminar access "How to Buy Apartments and Commercial Real Estate With No Or Low Money Down."

Download it free here: Commercial Real Estate.

Article Source: http://EzineArticles.com/?expert=Darin_Garman

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Building a Stellar Condo Conversion Team

Syndicated Post

All successful condo conversions rely on the efforts of a great many people, and building a condo conversion team that you can work well with is paramount to a successful and lucrative project. The people you surround yourself with will be your most valuable resource for information, skill and guidance. Here is a brief rundown of the good people you will want to find for your team.

Mentors
One of the best ways to ensure success is to copy and do what successful people do. If you aspire to be successful in the field of condo conversion, then it only makes sense to forge some friendships with others who are doing that already. Study what they've done and what they're doing. Ask them what mistakes they've made and what lessons they have learned, so you can avoid similar pitfalls. Everyone who is trying to master a skill can learn best from a mentor. Ideally, you want your mentor to be someone who has completed a few successful condo conversions, and is willing to share that information with you.

Real Estate Broker
Since you are dealing in real estate, a knowledgeable and experienced commercial broker will also be a valuable member of your team. You can't begin your project without finding the best property for your investment, and this is the person who will help you find what you're looking for, and will be at your side to guide you through each and every step of the process.

Construction Lender
Next on the list should be a banker that you respect and trust, and who has experience working with real estate investors. You are going to need loans and financing to fund your project and this is the person who can make it all happen. It's not a bad idea to look to your own personal banker first and see if that will be a good fit. After all, you already have a relationship and it may work out just fine.

Bookkeeper and Accountant
To help keep things in good order financially you will also need a reliable and knowledgeable bookkeeper and accountant. Again, it is wise to seek out professionals in this area who have experience working with independent business owners and if possible who also understand real estate investing.

Architect
An architect will be needed for some projects so it's a good idea to establish a relationship with one right away even if you may not need the service for your first project.

Real Estate Attorney
A lawyer who is experienced in working with real estate investments will be of enormous value when it comes time to handle all the legalities of your purchases, sales and the day to day functions of your corporation.

Building Inspector
You will also want a reliable building inspector as part of your team, preferably someone who has lots of experience. Missing a major flaw during an inspection can cause you plenty of dollars and headaches down the road.

General Contractor
Naturally your team will also include numerous members from various trades. The best way to establish this team is through a general contractor that you get to know and trust.
Building a reliable team is one of the most important steps of your condo conversion project. Build it well and you'll save yourself time and money in the end.

If you liked this article about condo conversion investing, tell all your friends about it. They'll thank you for it. If you have a blog or website, you can link to it or even post it to your own site (don't forget to mention http://www.TheCondoKit.com as the original source), or just come visit our site to learn lots more.

About the Author
Matt Sparks is a successful entrepreneur, both offline and on. He is also an amateur rock climber and author. He has written books, articles, and blogs about social business, real estate, finance, New Urbanism, sustainable cities, longevity, and rock climbing.

(c) Copyright - Matthew R. Sparks. All Rights Reserved Worldwide.

Article Source: http://EzineArticles.com/?expert=Matt_Sparks 

  

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How to Find the Right Commercial Real Estate Broker

Syndicated Post by Darin Garman

One of the things that can really catapult your success investing in apartments and commercial real estate is working with the right commercial broker. Finding a great deal is really all about the numbers, and getting more deals across your desk. Working with the right commercial broker will not only save you time, but make you a lot of money by getting opportunities in front of you.

So the question is, "How do you find the right commercial broker?"

I will "bottom line" this for you and make it easy. Make sure you find a broker that does nothing but investment real estate and specializes in it. DO NOT use a broker that is a "jack of all trades," meaning going from an open house on a Sunday to chatting with you about the 320 unit property on Monday.

You want someone that does nothing but spends time in the investment real estate world.

Why?

The specialized knowledge that a commercial broker has will be able to get you more GOOD opportunities to look at and because they know the market will be able to identify properties that can be very profitable. A good broker can also assist you in developing ways to purchase the property where you are making money at the closing table too. Plus they will help you avoid some of the common investment mistakes, as well.

This, more than any other of my "rules" is violated, and the investors that do violate this many times pay for it too. Make sure that you are not one of them.

Do you want to learn more about investing in commercial properties? Click the link below for my FREE 7-Part Investment e-Course. I'll also send you my FREE special report and teleseminar access "How to Buy Apartments and Commercial Real Estate With No Or Low Money Down."

Download it free here: Commercial Real Estate.

Article Source: http://EzineArticles.com/?expert=Darin_Garman

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A Creative Strategy You Can Use to Buy a Business Now

Syndicated Post by Martin Shultz

You want to buy a business now. You believe that market conditions in your target industry have bottomed and are most likely to improve. You need a creative strategy that will allow you to satisfy wants and needs of prospective business sellers, but still not expose you and your capital to too much risk if your timing is wrong. In summary you want the best of both worlds.

Yours is not an unreasonable request. And there is a proven and much used creative strategy that both buyers and sellers have used to bridge these kinds of gaps for decades. It had probably fallen into disuse during the expansionary period leading up to the current severe recession. It was not needed very often because of easy availability of relatively cheap debt, and because most people believed the good times would continue to roll. And most who didn't believe this weren't going to step into the path of an oncoming freight train by buying a business.

The circumstances that have brought about the need for this creative strategy are different than those common during this last expansionary period. Now there is uncertainty about future prospects. Both in terms of direction and in terms of amount. This disparity will tend to create a significant gap between the future expectations of most businesses for sale, in the minds of current owners, and prospective buyers. And the respective views of the future may not even be expressed explicitly. They may be implicit in their respective views of the underlying value, and related price of a business.

Sellers understandably want to ignore or seriously discount the results on their respective businesses of the past couple of years. They want to revert to the industry multiples that had previously been used as rules of thumb for valuations in their industry. And in doing so, either want to average the past few years cash flow results, and apply the multiple on the average, or something similar.

As a buyer, you have a different perspective. You would certainly like to get a bargain, and buy a really great business at a considerable discount. But in the real world, that doesn't happen very often. So you need a creative strategy to get you to a situation that is almost as good. And that is a situation where you won't lose money if you are wrong. This is consistent with Warren Buffet's rule number one for investing. It is "Don't Lose Money". (And as information rule number two is remember rule number one.) Or at the very worst, you will lose money but you know how much, and are prepared to risk that amount.

Let's get down to basics. You are evaluating a business that you are thinking of buying. You may be having difficulty justifying the asking price. It is not consistent with your view of the future. You may not be as confident as the current owner about the specifics of future expectations for the performance of the business. You may disagree with the timing of the cash flows his price implies. You may also disagree with the actual size of the annual cash flows his price implies. And there may be other issues including expectations for future interest rates. All of these have caused you to believe that at the asking price you will not achieve your expected return on capital. Or even worse, cause you to lose money. And worst of all, it is difficult to quantify the loss you could be exposed to. It may be time for some creative buying.

In these circumstances, many buyers will work diligently to convince the seller of the error in his thinking. In some situations that may work. But there are other factors working against you. The seller may have become fixated on a price, and this fixation will close his mind to your argument. An old uncle of mine used to say "convince a woman against her will, she's of the same opinion still". I am certain he was not the author of this what we would now consider to be a sexist remark, but used it frequently. He failed to realize that it applies equally to men and women. So try as you might, your attempts at reason and logic may well fail.

There are other details that will come into play as well. And they are very important to enhancing the buyer's willingness to accept part payment in the form of an earn out out (sic). So you need to have the details clearly understood and incorporated into a formal agreement. Things like what triggers the obligation to pay, and when payment becomes due. You will need professional help to accomplish this, either from a lawyer or accountant experienced in working with this concept. Make sure that the agreement contemplates the seller being provided with some right to audit so long as you have earn out related obligations to him. That way you should avoid any feeling on his part that he is being cheated. Proactively offering the right to audit will help you sell him on the concept in the first place. It will show him that your intentions are strictly honest.

This type of creative strategy is one that gets the seller what he wants or close to it. Provided that future events unfold in accordance with his stated or implied view of them. But it saves you from paying for something that may not take place, until it does happen. It effectively saves you from paying today, for a future that you don't experience, and one that you don't benefit from. You will be in a position of agreeing to pay for these future results, and paying for them, as you experience their benefit.

Will this work in every situation? Not likely. But proposing a creative strategy like this will demonstrate to the buyer that you agree with his price, so long as it is justified by results. Nothing works in each and every case. But you have nothing to lose by proposing it, particularly when it is obvious to you that you will have a disagreement on price without it. What is the worst that can happen? The seller will say no. And that is not fatal. What is more likely is that the seller will ask questions for clarification. Providing you with an opportunity to explain and discuss the situation. Be flexible in considering his input. So long as it is consistent with your risk management approach.

You may have to give a little on price in order to properly manage your downside risk. You may end up paying a bit more than you originally wanted to pay. But does that matter when you are paying with income that exceeds your original expectations? And only from this incremental income. It is not unlike paying commission on a sale that you wouldn't have made without the efforts of the individual entitled to the commission. You will be paying purely for results. At least on the earn out portion. Consider the slight increase to be the premium that you are paying to insure your risk.

For more actionable information that will help you in assessing a business buying opportunity take a look at the information at http://www.selling-a-business-without-stress.com/freereport.html. Although it is written to help sellers of businesses, it will work well for you. It is written from the perspective of what buyers should look for in a business, and accordingly what business owners should provide.

The author, Martin Schultz is a leading authority in preparing a business for sale and the publisher of the free information site http://www.selling-a-business-without-stress.com which provides actionable information about selling a business. His experience includes over 20 years evaluating acquisitions including as one of the founding shareholders of a publicly traded company that grew through acquisition. (After merging with another business of similar size, the merged company now trades on the NYSE.) His other credentials include an MBA from a highly respected North American university, followed by over 30 years of business experience. Martin is now an author and business consultant in corporate finance.

Article Source: http://EzineArticles.com/?expert=Martin_Schultz

Still confused about an 'earn out'?  Stay tuned and, in an upcoming article, I'll get into the explanation of the mechanics of this creative business purchase and sale option! - Doug

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Bludgeoned Commercial Real Estate Has Begun To Entice Chinese Bottom Feeders

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7 Time Management Tips For Small Business Owners

Guest Post

Are you a small business owner who is always late in meeting deadlines? Or are you the kind of business owner who does not have time for his family and always feels the pressure of doing more in less time. Then please keep on reading. Being self employed is really great but it also demands you become more organized. This article is going to cover the tips which would help you to manage your time in much better way so that you can become more efficient and therefore more productive.

Learn to say no: You should learn to say no to all unnecessary business meetings or enquiries from customers who are not really interested in your services. Unnecessary business meetings and customer enquiries take too much time that could be saved if you start filtering them and ignoring the less important ones.

Make a list: Making list of tasks that you want to do in one day and to arranging them according to their importance and allocating a fixed amount of time to each task saves a lot of time that used to get wasted in thinking about which task to do after completion of any other task.

Set small goals: Day to day you should set smaller goals which are easily achievable instead of setting long term goals. For example, if you want to read a book having ten lessons, rather than setting your target to read the whole book in ten days, set a goal of one lesson a day. Reading one lesson a day has a better chance of being achieved than reading whole book in ten days.

Avoid wasting time on social media websites: We never notice but most of us use to waste lot of time checking emails, surfing social media sites, reading blogs etc. Set a fixed amount of time to read your emails, twitter, forums etc.

Complete task in one shot: Never leave the tasks without completing them. We have a habit of delaying tasks that are either tough or are not of our choice. But leaving them without completing them and resuming them again wastes your valuable time which you have to spend every time to make yourself ready to start the work exclusively for each specific task.

Use technology/outsource: Many free applications are available which can easily handle almost all kinds of business operations. You can use such applications or outsource your administrative tasks so that you can focus easily on creative ways to grow your business.

Be flexible: It is very common to face unpredicted situations where you have to give your attention to other activities which are not related to your business. For example: taking care of an ill family member or attending a family function. Try to keep your schedule flexible so that you can easily adjust to such things without sacrificing already scheduled tasks.

Rudo Barr is working as an internet marketing executive for Fortepromo which creates high quality promotional products that help companies to promote their brands. 

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Of Course It's For Sale!

Back in the spring, I did a piece on selling your business and was featured on our local Chamber of Commerce Podcast site as a result. Since I'm taking a bit of a break right now, I thought this might be a good syndicated post to share about getting ready to sell your business.

Syndicated Post

I sent a friend who was interested in owning a business to visit a shop in town. I had told her the owner had just bought the place and had done a really good job of getting more customers into the store.

When I saw my friend the next day she told me she had visited the store and was surprised to hear the new owner say she wanted to sell it. I was surprised to hear that, so when I was in town a couple of days later I made a point of talking to the owner. She remembered my friend and all her questions. "That woman was so interested in the shop I asked her if she wanted to buy it." She went on to explain: "It's a business. It should always be for sale - for the right price."

Many business owners become so emotionally attached to their business that they don't consider selling until it's too late. If someone asked you to name a price for your business what would that price be?

Many entrepreneurs start businesses planning to sell them within a few years. Others just struggle to actually become the owner of the business instead of its only employee - if you thought working for someone else was bad, try working for yourself!

To be the business owner is to think of your business as an asset, something like a car or a house that can be sold on the open market. What gives the business value is its assets and the ability to generate positive cash flow.

No matter how you feel about your business, we can calculate what it's worth. For example, most business brokers will probably tell you that a typical business is worth 1.5 to 3.5 times discretionary cash flow plus the value of the tangible assets. In this case, discretionary cash flow is total cash flow plus the expenses that a new owner would not be obligated to pay - depreciation, owner's salary, auto expenses, loan payments, retirement contribution, travel and entertainment, etc.

Knowing what it's worth now will allow you to make the changes that will increase its value in the future. It will probably require increasing revenue, but if you increase revenue at the expense of margins you will actually be decreasing the value. Pay attention to the cost of that additional revenue. Do you need to do more marketing, increase production capacity, or add employees? Very often these steps can be taken incrementally to lessen the impact on cash flow but achieve the same long term goals. The key is planning and having the patience and persistence to achieve the results.

Do you know what your business is worth? If not, how would you know what to say if someone offers you a million dollars cash for yours? Maybe it's time to find out.

Dave Ferguson is a business coach and the owner of Lake County Business Coaching, Inc., a coaching firm dedicated to helping people in business to improve their performance and their results. More information is available at http://www.LakeCountyBusinessCoaching.com.

Article Source: http://EzineArticles.com/?expert=Dave_Ferguson

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Five Fool Proof Ways to Brighten Up Your Commercial Property

This looked like a great post for the end of the year; great tips on brightening up your commercial building to keep and attract the best quality tenants.

Enjoy!

Syndicated Post

1. On Cleaning Up and Success Team

So far, I have viewed and analyzed no less than 3,000 properties internationally. And I have discovered that most owners tend to overlook this very simple but vital task. Shocking, isn't it?

Irrespective of whether you are planning to rent out or sell your property, clean it up completely. This means the interiors as well as the exterior. Of course, unless you enjoy physical work and don't mind getting your hands dirty, you can always engage others. There are freelancers available through outsourcing website who wants to earn some extra bucks. It is recommended that you work with a "Success Team" to keep your properties in tip-top condition and make your investments more fool-proof and blissful. Ideally, members of your success team should include plumbers, electricians, handymen, painters, cleaners and other professionals like lawyers, valuers, real estate negotiators, property managers and interior designers. There are also professional cleaning companies with the equipment that can make your place shine like brand new.

Humans are very visually oriented. Thus, they are impressed by what they see, making it paramount that you clean up thoroughly. Yes, that means top to bottom, left to right, and inside out. Most buyers and tenants want a property that has been well taken care of.

2. Trim Overgrown Trees and Shrubs

Where applicable e.g. landed industrial and semi-detached commercial shop offices that come with trees and/or bushes at the front, side or back of the building. By trimming overgrown trees and plants, it instantly brightens up your property, makes it more attractive and opens up more space.

3. Repaint with Lighter Colours

This is weird but true. Using a different colour does give a different effect to the same room. To prove a point, the next time when you see an advertisement by companies marketing paint, pay close attention. The paint boys spend thousands to show you how a colour can make a world of difference in life. Using lighter colours like white and beige to paint your property makes a given space look brighter, bigger and wider. (To get more space, you don't always have to break any walls or buy more land. Just paint with a light colour!)

4. Bring in More Natural Light

Use your own creativity, or observe what your neighbors have done. Explore and discuss with interior designers about ways to bring in more natural light. It could be as simple as enlarging existing windows, or putting in more windows; using more glass doors and partitions; replacing roof tiles with transparent tiles or skylights etc. The outcome are astonishing!

- You do yourself a favour, by adding more value to your property;
- You do your tenants a favour, helping them save on electricity;
- You are also helping preserve Mother Earth, by reducing global warming and reducing the depletion of our natural resources.

5. Add More Lighting Points

Where appropriate, add more lighting points. With commercial properties, it is almost universal that tenants prefer bright places - unless they are in the business of "candle light" dinners. By creating a brighter and more spacious look, you can dramatically improve the attractiveness of your property.

Mike has been writing articles online for nearly 2 years now. Not only does this author specialize in personal investment, productivity, you can also check out his latest website on ftd flower delivery which reviews on FTD Flowers Delivery

Article Source: http://EzineArticles.com/?expert=Mike_Milanez 

 

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You Can Become a Multi Millionaire Through Commercial Property Investment

Syndicated Post

It is estimated that 98 percent of the world's millionaires have either made or parked their money in property. This is clear indication that there is a huge amount of wealth waiting to be harvested through property investment.

And yet, only about 5 percent of the population of any given country are active property investors. Why? Perhaps, the reasons are inexperience about what real estate investment has to offer, or simply the lack of motivation to get started because of limited information and guidance.

There are tried-and-tested ideas, strategies and recommendations which are general in application, giving you the flexibility to invest in any part of the world. In addition, the tools and advice provided will certainly ensure that you invest in the safest and smartest way possible to gain maximum returns on your investments.

They are facts of life in the world of property investment. Facts that have been verified. As Bernard Baruch put it, "Every man has the right to be wrong in his opinions. But no man has the right to be wrong in his facts." With better insight, are you ready to jump on the red-hot commercial property market bandwagon? Never mind if you're in the minority group, the crucial factors are:

1. Get serious
2. Get committed
3. Get started, and
4. Get off your butt, now!

Commercial property investment is an amazing avenue to great wealth. A few right investment can absolutely change your life and lives of your love ones.

Believe that nothing is impossible in a willing heart. All possibilities lie in you being willing to take the first step in the right direction towards financial freedom.

Mike has been writing articles online for nearly 2 years now. Not only does this author specialize in personal investment, productivity, you can also check out his latest website on ftd flower delivery which reviews on FTD Flowers Delivery

Article Source: http://EzineArticles.com/?expert=Mike_Milanez 

 

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Getting the Best Possible Commercial Real Estate Advice

Commercial real estate can be tough to get a handle on and making sure you get the best commercial real estate advice can make the difference between making it and losing your shirt. Professionals and "gurus" have devoted years to identifying, financing and making deals happen no matter through all kinds of markets. Do you honestly think you're going to waltz right in and be the next Donald Trump?

Commercial real estate is a terrific way to make money, but you already knew that because you are here! So what's you're next step on the path to financial success as a commercial real estate investor?

First, get a sound knowledge base in real estate and investing principles. This could mean taking some courses at a local college or online, reading some books or attending some seminars. Obviously, a trip to Border's Books or the library is going to be cheaper than other two options, but do whatever you think is best for your unique situation. Any way you do it, you need to learn the basics of the business and know what you're getting into before you sink money into an expensive seminar, course or worse yet an actual piece of property.

The nature of available property investments differs from market to market, so the best piece of commercial real estate advice you can get is to find a mentor you guide you through it all. A good mentor, whether they are directly located in your market or not, can teach you how to spot good deals, avoid bad ones and maximize returns. They can also point you in the right direction as far as education, seminars, what you need and what's a waste of money.

Once you have a good knowledge base a reliable source of information for the type of investments you're considering, you're ready to test the waters. Find the local investors who are making your dream a reality and watch what they do. Do your best to follow their progress on deals and look at the work it takes to make it all happen. Start looking at properties and deals that are comparable to what successful commercial investors are involved in and prepare yourself for your first good deal that comes your way.

Still looking for more commercial real estate advice? TheRealWelathBlog is run by professional commercial real estate investors who know their way around a deal. Make sure to subscribe to their newsletter so you get the most out of their updates and this wonderful blog!

Emily Cressey is a Commercial Real Estate Investor based out of Seattle, WA. She and her partners have invested in over $30 Million in commercial real estate projects. If you are new to investing, or would like help getting started, visit their commercial real estate investing site and subscribe to receive your free 5-video Course On Commercial Real Estate Investing For Beginners.

Additionally, if you would like reasonably priced commercial real estate advice, please feel free to contact The Real Wealth Company for affordable hourly consulting.


Cressey, E. (2009, July 23). Getting the Best Possible Commercial Real Estate Advice. Retrieved November 9, 2009, from http://ezinearticles.com/?Getting-­the-­Best-­Possible-­Commercial-­Real-­Estate-­Advice&id=2651682

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