MG_subpage_testimonials-murphy.jpg

Archive

Posts Tagged ‘commercial real estate advice’

The 5 Challenges of Owning and Managing a CRE Brokerage Firm

April 15th, 2014 No comments

This week we are launching our second phase of CRE-BOSS, a series dedicated exclusively to commercial real estate brokerage owners and managers.  As such we thought we would refresh a blog I originally posted almost 2 years ago.

Over the years, we have had the privilege of working with countless owners and managers of commercial real estate brokerage firms. As a part of helping them discover ways to build their success, by helping their agents grow their businesses, we have identified five key challenges brokerage owners and managers regularly face:

1. Recruiting Challenges. Brokerage owners and managers know the lifeblood of their business is their agent pool. Growing that pool is a challenging and time-consuming process, which requires both a diverse skill set as well as a clear strategy. Bringing in a fresh college graduate is a very different process from recruiting a disgruntled top producer from a competing firm. Each of these “elevator assets” needs to be handled with care.

2. Brokerage Staff Challenges. Every broker is an individual, and they all need different things at different times from their manager. The best commercial real estate managers are trainers, mentors, coaches, business strategists, and, at times, psychoanalysts. An old colleague of mine, John McDermott, of SVN, once accurately summarized that a broker only wants their manager’s attention for one or two reasons: to bitch or to boast. Likewise the manager has to deal with the administrative and support staff and ensures they are not only getting the job done, but getting the respect they deserve.

3. Business Development & Marketing Challenges. In addition to growing and managing a brokerage team, owners and managers of commercial real estate firms play a role in keeping their team busy. They have to wear two hats to do it. Sometimes, managers must oversee a marketing strategy that builds brand equity and opens doors for brokers to enter. At other times, brokerage managers must go into the field and both close sales with their brokers and generate live leads for them.

4. Operational Challenges. In addition to managing the team and the brand, leaders of commercial brokerages have to keep the lights on, satisfy the requirements of state licensing agencies and otherwise, keep the office running. Along with these nuts and bolts issues, managers who want to succeed also need to collect and analyze performance data to understand where they are succeeding and where they need to work harder.

5. Challenges Getting to the Next Stage. The best managers that we work with also keep an eye on big-picture strategic considerations regarding the future of their firms. For example, they look for other brokerages in their market or in complementary markets that they should acquire or merge with. They also build a personal strategy for how they will relate to the brokerage in the future and for how their company will continue after them. Unfortunately, many managers are so overwhelmed by the other four challenges that they fail to give these crucial issues enough consideration.

Every one of these challenges may seem daunting, but you can become a master of all of them. Over the next five weeks, we will address each of these issues and explore how to become a better commercial real estate brokerage owner or manager. 

Share

The Dirty Little Secret About the $638,000 Commission

April 8th, 2014 No comments

It seems my blog post last week regarding our 2013 Earnings Report has created a lot of attention.  A few respondents felt the $638,000 annual average commission figure our clients earned last year was falsified at worse or greatly inflated at the very least.  Fortunately neither is true.

One colleague, whose opinion I value greatly, suggested my numbers where analogous to comparing the average height of an adult male to an average height to an adult male professional basketball player.  He felt the two cannot be compared in any valid fashion.  I disagree with the analogy.  Comparing height is comparing something one is born with, a genetic trait.  I have never heard of someone who was 5 feet 9 inches (my height when I need a haircut) and, after implementing a disciplined system, grown to 6 feet, 5 inches.  If there is such a system, someone please tell me now.

In this month’s Success Magazine, publisher Darren Hardy outlined “The Dirty Little Secrets of High Performers”.  Much of his editorial can be correlated to why some commercial real estate professionals are top earners, while others are not.  As he noted “The success of those you admire has less to do with inborn talent, intelligence, nature or any other gift and is more dependent on the process of creating and reinforcing successful habits that they built into their lives and environment.”

The beauty of understanding this is that anyone can become a superstar success.  All they need is the discipline to pursue and implement proven successful habits.

So can you earn $638,000 in commissions?  Again, this was simply an average of our one-on-one coaching clients.  Thus many make much more, and many make much less.  The key is all these folks are disciplined, follow our proven methods and create a new level of successful individual.

Share

When Your Prospect Says “Send me information”, Say THIS – Prospect Qualification – Part Two of Two

March 18th, 2014 12 comments

In last week’s blog, I noted that NOTHING and I mean NOTHING irritates me as much as a slow maybe. It is absolutely frustrating. Give me a quick no, now. I also noted how I see others (not our clients, they now know better) put themselves in the position where their prospects continue to suggest they are interested in their services but can never commit. take ctrl

I noted how it was time to stop letting prospects control you. It’s time to take control of the process and start working with those who are ready, willing and able to make a decision. Then we shared The “Prospect Spectrum” – 8 steps to determine how qualified a prospect really is.

However, what happens when you do qualify a prospect and the prospect then asks you to “Send Information” or to “Submit a Proposal”. What do you do then?

In this Massimo Minute, I want to share with you the two questions you should ask your prospect when they ask you to prepare material for their review.

The first one is simple. “Great, what information are you specifically looking for that will put you in position to make a decision.”  This allows you to send applicable, customized information, instead of just some boilerplate, put together in 3 minutes. It won’t get you any business; I am really just throwing darts on a wall, information.

If your prospect cannot articulate what they want you to send, then you haven’t qualified your prospect, or perhaps you haven’t articulated your value proposition as well as you think you did. A qualified prospect should be able to clearly communicate what they are looking for to allow them to make a decision. If they can’t, review the Prospect Spectrum from my last blog and see what step(s) you missed.

Second and the most important, once the prospect clarifies for you what to send, ask for a follow up commitment. This “follow up commitment” will save you more time, money, aggravation and frustration than you could ever imagine. Remember, nothing aggravates me more than a slow no; chasing for an answer and being dragged through the field of “only ifs”. You don’t want to go there; this is where you lose all control.

What is a follow up commitment? It goes something like this. “Great, but before I send you ______________ (the information, the proposal, etc.), let’s agree to a specific date and time that we are going to _________(talk/meet) again. During that time we will decide one of two things:

  1. You want to move forward and ______________(the result you are looking for, whether it is getting a meeting, a signed exclusive, a contract, etc.), or
  2. You don’t want to move forward, but you will tell me why, as this will only help me understand how I can better serve you and other clients in the future.

Now, if the prospect won’t commit, you have some options to consider. And these we will address in our next Massimo Minute.

 

Image courtesy of  bishopclimate.me

Share

Prospect Qualification – How To Take Control – Part One

March 11th, 2014 2 comments

There is NOTHING and I mean NOTHING that irritates me as much as a slow ‘maybe’.  It is absolutely frustrating.  Give me a quick ‘no’ now.  There will be plenty of opportunities in the future to share with the prospect why we are the best at what we do and there really is no better choice than the Massimo Group when it comes to improving income.  Forgive me, but you should feel the same.  You want your prospects to understand they only have one choice and that choice is you.Wating

However, we put ourselves in the position where our prospects continue to suggest they are interested in our services but can never commit.  The prospect that tells you they have not had the opportunity to review your proposal, or they still need to meet with their partners.  So, still believing you have a chance to win their business, you wait, checking in periodically, yet never really making any progress.  When, in reality, you are actually digressing.  You are wasting time with unqualified prospects.

Stop letting prospects control you.  It’s time to take back the process and start working with those who are ready, willing and able to make a damn decision!

There are two steps to determine if the prospect on the other end of the phone line or table is really worth your time.  We will explore the first step today and second, a more significant step, in my next post.

First, you need to confirm where you are on the “Prospect Spectrum”.  This was an approach shared with me by Ralph Spencer, CCIM, a regular contributor to the Massimo Group.

1)     They have a need for some type of commercial real estate solution.  Recognize your prospects may not realize they have a need, and it’s your responsibility to determine if they do.

2)     They are aware of their commercial real estate need.  If not, is there any information you can share with them to make them aware?

3)     They have the authority to execute a solution strategy.  There is no greater waste of time than dealing with someone who has no authority.  You make your pitch asking for a meeting only to find out the prospect needs to speak to their partners, or worse, their boss.  You didn’t qualify.

4)     They have the budget approved to execute a solution strategy.  If your solution is a new lease, a new mortgage, a new purchase or consulting arrangement, make sure your prospect understands the appropriate costs.   We never send a proposal or move down the prospect process without confirming the prospect understands the required investment and expected returns.

5)     They have a relative sense of urgency about the real estate decision.  They may have a need; however, they may not believe it is a priority to them.  If you are not sure, you can always ask the question.  “When will (fill in your service solution) be a priority to you?

6)     They are familiar with your company and have had a satisfactory past experience.  The greater your presence with the prospect before you make contact the better chance you have of moving forward.

7)     They know, like and trust you.  Careful here.  Don’t assume you will win the business because you have done business with them in the past.  Confirm if they are speaking with other service providers.

8)     They are willing to be guided by what you say.  This is ideal, but even so, you need to confirm the prior 7 steps of the Prospect Spectrum.

 

Once you believe you have qualified (and you really haven’t fully qualified the prospect yet) you may be asked to send “additional information” or even a formal proposal.  I strongly suggest you do not proceed unless you first get one more thing from your prospect.

And that item is the subject of part two of this prospecting series.  We will post part two next week, but for now, start taking control of the process.

 

Image courtesy of Soul in Motion

Share

Every Opportunity You Secure is Based ON This One Principle

March 4th, 2014 No comments

Earlier this week, a client of ours sent me a picture of him on Florida beach.  The picture comprises of a tall, seemingly, CAM00366cold beer and an interesting combination of fried delights, as well as one of the many Massimo Group exercises we gave him to assist him in working ON his business. I loved it.  Well, not the food, I can’t do fried anything, but the client was allocating the time to focus on  growing his business, and working on his business will ultimately lead to greater opportunities, both in terms of quantity and quality.

Most commercial real estate professionals spend their days prospecting for new opportunities, either on the phone or, preferably, in person.  They are negotiating contracts, and ultimately they or their teams are fulfilling these opportunities.  These elements are the most productive activities for working IN their business.  They are transactional in nature and the result of working ON their business.

If you are not working on as many opportunities as you would like, then it is a direct result of you not spending enough time working ON the business. Working ON the business comprises of your strategic plan, your marketing plan, your operational plan and even human capital plan.  Yes, even if you work by yourself or with a small team you need a human capital plan – either investing in your people or yourself.

I have yet to hear of an instance where someone has called up and said, “I don’t know you, but I want to give you my business”.  Opportunities are the result of marketing and sales, which come in many forms when working ON your business.

Those who say they are “too busy to work on their business” are the same as those who find they have no new opportunities when their existing pipeline is serviced.

Transactions are essential in any business; they are the bloodline of a business.  However, it is when you work ON your business that you work on the heart of your business.

Share

A Potential Death Blow to Investment Sales?

February 25th, 2014 3 comments

It is common folklore that a silver bullet will stop a werewolf in his tracks.  In the CRE industry this was analogous to what the economy shot us with in 2007.  Fortunately many, but not all of us, survived.1031

Now we have another, yet more familiar, threat to deal with.  Tax reform.   This week the National Real Estate Investor reported, in late 2013, Senate Finance Committee Chairman Max Baucus (D-MT) released a series of tax reforms including the elimination of “like-kind” exchanges.  This Sec 1031 tax practice has been an essential catalyst to commercial real estate sales since its creation.

So how bad could the extinguishing of “1031s” be?  Many would say this could be disastrous on commercial brokerage community.  One simply needs to look to Canada, where there is no tax instrument such as the like-kind exchange. CRE transaction volume in Canada is significantly lower than here in the U.S.

How real is this threat?  Remember, this is the same administration that has placed capital gains benefits in peril.  Then again, this led to an increase in sales velocity in the 4th quarter of 2012, as astute brokers leveraged that threat to position owners to sell.  The potential impact on the discontinuance of like-kind exchanges would be much higher.  Any short-term increase in sales volume would be offset by a drop in velocity for years to come.

Let’s all hope this is one reform that doesn’t even make it to the Senate floor.

-

Original 1031 image property of  discoverrealestate.com

Share

Brokerage Business Perspectives from the 5th Row of Cameron Indoor Stadium

February 18th, 2014 No comments

This weekend I had the opportunity to sit 5 rows behind my beloved Duke Blue Devils basketball team and directly in line with Coach K.  Duke was playing the University of Maryland, which has historically been a very competitive match up.  I have been to several games in the past, but this one was special as my nephew, Greg – who is a big Duke fan himself – was recently accepted into the Naval Officers program and it was a celebratory event.  He wanted to see a game in Cameron and I wanted to watch Coach K and his managing of a game.  Heck – I run the commercial real estate industry’s biggest and, may I say, best, coaching organization so I am a student of any coaching similarities I can find. maryland

As the game progressed I found several elements that tie directly to our business and to yours as commercial real estate professionals.

 The warm up – We don’t go into a pitch or a presentation without ample preparation and practice.  Even though you may have given a similar pitch, phone call or speech several times in the past, it doesn’t mean you can wing it and expect perfection.  I am sure Jabari Parker, Duke’s top freshman and major NBA prospect knows how to dunk, but yet he as dunking in warm ups.  It wasn’t a coincidence that he had a thundering game-changing dunk in the final minute of the game; he had practiced that move thousands of times if not more.

The Game Plan – Everyone has a game plan. At least, everyone we coach.  You need to know how to set up your year, your month, your week and your day – every day.   Some days will not go as planned.  Duke had a game plan, but as it turns out they had their worse shooting performance of the year.  Simply put, their shots weren’t falling.  When the same happens to you – your shots aren’t falling – what do you do?  You adjust.

YOU HAVE TO WANT IT – After halftime, a normal phase of Duke Basketball games where Duke comes out more focused and makes one of their patented runs.  Uncharacteristically, things went the opposite way and Maryland gained the momentum.  Coach K called a time out, and stared down at his team and assertively and passionately repeated these five words, again and again and again. You Have to Want It!   Shortly thereafter momentum shift back to the Blue Devils.  Do you “want it”, do you have the passion to set a vision and make it happen?  Losing momentum in sales happens – no one is perfect.  You need to have a clear vision and passion to get the momentum back on your side.

Get Creative – The “Cameron Crazies – Dukes’ student section – are known for their creativity.   During the game one student held up a “Maryland Stinks” sign while wearing a gas mask.  He wore that darn mask throughout the entire game.  And it gets hot in Cameron!  No offense to the University of Maryland, this is just a creative example, albeit at their expense.  From a sales perspective, we must be creative.  Why did this student stick out in a sea of blue?  Because he was different.  Obviously you don’t want to offend anyone in your marketing or sales approach – that’s just wrong.   But how are you promoting your difference to your audience?

Everyone needs advice – The picture inserted in this blog, taken by yours truly, is my favorite. Cameron It shows two of the better college basketball players on the planet looking at their coach for instructions, and Coach K – the one with the BIG championship ring on his finger- instructing them what play to run.  Regardless of your level of success, freshman or senior, new-to-business or top producer, you need a mentor, a coach, or an advisor.  Someone to share how you can get better, make more sales, close more deals or work within the framework of a team.  If you don’t have one, you are simply going at it alone.  So many of your successful peers have leveraged others for their personal success – who are you leveraging?

Despite being heavy favorites, Duke managed to barely pull out another victory at Cameron.  Sometimes it takes more than what you expect to win a client, but then it is seemingly more satisfying.  Follow these five perspectives and you will certainly win more than you lose.

 

Cameron Crazies photo courtesy of the News and Observer

 

Share

A National Championship and Prospecting Lessons all in One Weekend.

January 29th, 2014 2 comments

If you have read my book, Brokers Who Dominate, you may recall the sport of lacrosse has played a prominent part in my life.  As a kid passionate about sports, I related everything to the game.  As adults we continue to compare sports to business.  This time however, I want to switch perspectives and share with you some business lessons from a national lacrosse tournament I participated in this past weekend.

Massimo Group reps Vince and Rod Santomassimo on the far right

Massimo Group’s Vince and Rod Santomassimo on the far right

The Florida Lacrosse Classic brought together 42 teams from across the country, to compete in a national championship event, segmented by a variety of age groups.  The winner of each division would be crowned “Masters National Champion” (affectionate term for old guys who play lacrosse) and ultimately be given the opportunity to play in the World Championships in the July of this year.

I had the privilege of playing with some old friends, and other fantastic players for “Team Florida”, my old stomping grounds when I first broke into the brokerage industry in the late 1980’s.  Like most sports, the object is simple – score more goals than the other team.  Throw in the mix of 50 year old men beating you with titanium sticks while you attempt to score makes it a bit more challenging.

The First Call is always the hardest – During our first game, we were clumsy, uncoordinated and downright bad.  We flopped around with no direction and little understanding of what we were doing.  Personally, I led the pack in sloppiness.  Every time I went to the goal I got beat up and either missed my shots or got smacked into submission by an over-sized brawny defenseman.  Prospecting without a plan, direction, or understanding of your objectives or perspective is just as futile.  And yes, educated prospects will beat you up if you are not prepared.  You might as well “cold call” and at the Massimo Group, we don’t coach cold calling – don’t believe in it.

You have to find your groove – After a bad loss in game one, our team started to figure out how to play with each other, and the goals started falling.  Even my shots started falling; I got my legs and confidence back and was able to contribute.  Not all my shots went in, but you can’t score if you don’t shoot, so I knew I had to generate more shots.  I scored three goals (a hat –trick) in both games 2 and 3 and next thing I knew we were in the semi-finals.  Prospecting takes a plan, but more importantly, it’s the consistent implementation of that plan that matters.  Not every call will lead to a meeting, but I can guarantee you, avoiding prospecting will lead to very few, if any, quality meetings.  You have to take your share of shots, and sometimes more than your share.

When you’re in the groove – keep going.  In the semi-finals we faced a higher seeded team and found ourselves trailing 5 to 2 at one point.  Then our fearless team leader asked us to “have fun and do something stupid”.  All it took was one shot and I was “in the zone”.  I kept on taking my shots, abusing my

When your in the groove, don't stop!

When your in the groove, don’t stop!

body in the process, ended up with four goals and we found ourselves winning 10-9 and on our way to the National Finals for our division.   I have seen far too many times folks giving up way to soon in their prospecting efforts.  They secure one meeting and tell themselves to “stop while I’m hot”.  How self-defeating is that?  If you’re hot, take more shots, make more prospecting calls and ride the wave.

Make “one more call” – In the finals we faced a strong team from Maryland.  However, my personal groove was gone.  I stopped taking my shots.  Things were not falling for me.  Thankfully, we had a strong team; no longer resembling the bumbling old men we looked like only 2 days and 4 games earlier. We took a 7-2 lead late in the game, only to have our opponent tie the score at 8 in the final minute.  The game would go to sudden–death overtime, with the next goal securing the National Championship.  Despite playing poorly, I knew I was ready, in fact as soon as the game was tied I told myself – “Great – now you can end up on a high-note”.    From all the abuse, beatings and moves the defense applied, I knew exactly what to do and how to get us in position to win.  I took one more shot and, luckily, it went in.  We won.  National Champions.

Similarly, there are days I prospect and get beat up all day long, just like you.  The easy decision is to cut your prospecting efforts short and move to another, less productive activity.  However, in any competition, especially sales, winning is not easy.  I can’t count how many times I, or our clients, have secured meetings by simply making one last call.  OK, it is hokey, but being persistent, regardless of how the past has played out, is what will ultimately make the difference.

For me, I am not going to Disney World, but our team is going to the World Championships later this year – even at our old age!

 

Share

Systemizing Your Prospecting

October 7th, 2013 4 comments

For many brokers, the hardest part of the business is prospecting. If you’re one of these people, your antipathy to calling makes sense, especially due to the combined challenges of starting up systemconversations with people that you don’t know and the additional risk of rejection. However, getting out there and prospecting is well worth it. Just one good call could turn into tens or thousands of dollars of income. One of the keys to successful prospecting is to take what could be a random activity and turn it into a systemized process.

The key to successful prospecting is momentum. When you get into a groove, you make more calls in less time. It also becomes progressively easier to pick up the phone after each call. The momentum also creates similar benefits on the call as you are able to use what you learn on previous calls to make subsequent calls more effective.

Building momentum can be challenging. Between all the interruptions that most offices bring and the tendency to procrastinate during your calling campaigns, you might find yourself just making a couple of calls at a stretch. Here are some techniques that can help you to increase your focus and make more calls in less time:

- Block out times to call. Making an appointment with yourself to get on the phone eliminates the excuse that you don’t have time to do it. If you treat the time as it is a meeting with a client and close your email program, switch your cellphone to silent mode and let incoming calls go to voicemail, you might be amazed at how much you get done.

- Sometimes “time” can be intimidating.  A “1 hour call block” may seem like 10 hours for some.  In these instances we suggest setting a “rep” goal.  Instead of one hour, perhaps the goal is 10 dials, or 10 connections.  The latter of course will take much longer to achieve, but setting a small “rep” goal can be the catalyst to quickly building a habit and growing from there.

- Plan your prospects. Instead of randomly paging through your database looking for people to call, take the time to predefine your dialing list. This makes it easier for you to go from call to call quickly.

- Pre-book follow ups. After each call, put an entry in your CRM’s calendar or your calling program to remind you to make your follow up call. Even if your call was not fruitful, consider booking a call for two to 12 months in the future so that you can touch the prospect again and have a chance at better luck. As you do this, you will find that you are making more and more pre-planned calls and fewer and fewer cold calls, reducing your planning time.

- Use an automatic dialer. Many customer relationship management (CRM) software packages can interface with a networked desk phone or with an Internet telephone on your computer to dial calls for you, saving you from stopping to dial and taking the risk of doing something else instead of dialing.

Prospecting might be hard, but it’s very fruitful. Spending a little time up front to set up a system and using your discipline to stick to it can make the process easier, and even more fruitful. Now stop reading this and go call someone!

Share

Avoiding the 5 Biggest Broker Failures in Commercial Real Estate

September 17th, 2013 4 comments

I was driving back from a meeting the other day, listening to one of my favoritFailuree CD Series from Success Magazine. The topic of the CD was failure. More specifically, the lessons we all learn from failure. Reflecting on my personal career, and the growth of the Massimo Group, and even our clients, I appreciate how much influence failure has had.

Failure is life’s greatest teacher. So let’s look at 5 ways you can leverage the all-encompassing educational tool that is failure, to grow your  commercial real estate brokerage practice.

1. When you don’t get the listing or representation assignment, ask the prospect (unfortunately not your client) why not. How else can you win the next opportunity with this prospect unless you fully understand where they found deficiencies in your presentation? Use this opportunity to better position yourself for consideration next time. “Well, I am sorry to hear of your decision, but we greatly appreciate your consideration. If you would, can you provide us with some specifics on where we fell short. I only ask because I value your opinion and critiques from qualified owners/tenants/etc. like you are one of the best ways for us to grow”.

2. When you get rejected on the telephone. Stop. Don’t make the next call until you debrief on the last one. This is true when you have had a great call as well. But when rejected, you need to ask yourself why. Was it a poor value proposition, did you fail to properly qualify the prospect, was your demeanor less than enthusiastic or did you simply give up too easily and invite the prospect to blow you off?

3. When a deal falls apart, you know, the one you have been working on all year and have already envisioned how you would spend the commission, review everything. And, I mean EVERYTHING. Somewhere along the process an assumption was made that started this downward spiral. It could have been in the beginning when you did not properly qualify the prospect, was it when you assumed the other broker would take care of that deal point, or the attorney was smart enough to not get in the way? A vast majority of the deals that die, die because of someone, somewhere somehow making an improper assumption. You know what they say about assumptions.

4. When a co-broker skirts you on a commission split, what did YOU do to let this happen? Did you do everything you committed to when the commission arrangement was first established? Did you get the commission agreement, along with division of responsibilities in writing? Did you monitor the progress of the other broker, and of yourself, during the transaction and address any inconsistencies while they happened?

5. When you fail to make your financial goal for the year do you understand why? Did you initially breakdown how many commercial real estate deals and what size of deals would need to be consummated for you to reach your goals. Did you then project how many prospecting activities and presence impressions you would need to generate the deals? Did you consistently review your pipeline and focus your efforts on those transactions that had the highest probability for you and your client, did you watch your numbers, your dashboard or seek advice from you mentor, colleague, manager, spouse or coach when you felt a change in course might be needed?

Darren Hardy, publisher of Success Magazine refers to failure as “The F word”. Like Mr. Hardy, I really LOVE failure. Why? As expressed by many, there is only one true “failure” in life and that is the failure to try. If you can relate to any of the 5 reasons above, then it means you are trying. If you start to increase your failure rate, you will be increasing your effort rate and ultimately you will increase your success rate. Do yourself a favor and go out and fail today, and fail a lot.  Success is right around the corner.

Share