commercial real estate

but the 10 year treasury off which commercial mortgages are set was up 7 bips today. Spreads are still rather wide in the commercial world too.

Headlines today: foreclosures up 79% over last year! Time to panic! Oh my!

The facts? More than 1 percent of U.S. households were in some stage of foreclosure in 2007, up from about half a percent in 2006.” ONE PERCENT. Comparisons drawn with the great depression abound.

Hogwash. Take a deep breath. The national foreclosure rate during the depression was 3.9%. On top of that the depression saw a bunch of distressed sales.

I know, a dry topic, but if you don’t work for an institutional owner or a national brokerage firm, you may be lacking in access to good analysts for Argus modeling and other financial analysis.

Here are some folks who have expressed interest in doing this kind of work, or do it for a living:

rebackoffice. http://www.rebackoffice.com/analyticsResearch/investmentAnalysis.html. $250 plus $10/tenant and $25/assumption. rebackoffice has a wide range of real estate outsourcing solutions. Overseas solution.

Cherie M. Hardgrove, MAI, CCIM. chgrove@columbus.rr.com. $90/hour.

Global Realty Outsourcing, Inc. T: (212) 209-0772. Wide range of pricing depending on format of data provided. Can do lease abstracting and other due diligence projects. Overseas solution.

Carey Guiberson. Carey [carey@ont.com]. Will refer assignments to his graduate students. $50/hour.

I’ve been in touch with Your Man in India about getting a personal virtual assistant.

I’m going to experiment with having him/her handle tasks that keep me away from sales related activities, e.g.,

-personal calls to companies, vendors, etc.

-Following up with prospects that have visited my listings (following a simple script. I will handle the most important leads and any work that requires a real estate license)

-maintaining marketing reports

-maintaining my database….particularly bulk additions to the database

-market research

This is all to supplement my company-provided in-house team. I’ll keep you posted on how it goes.

This is a complete generalization. Fees can be higher or lower. Just thoughts about the appropriate range:

Up to $3 million - 6%

$3-$5 million - 4% to 5%

$5 - $10 million - 3% to 4%

$10 - $20 million - 1.5% to 3%

$20 million to $40 million - .5% to 1.5%

over $40 million - .75% or lower

Fees tend to top out (with sophisticated sellers) in the $500,000 to $1 million range. That said I have heard of much larger commissions being earned.

I was walking through a mortgage broker’s space yesterday and heard a training seminar in progress.

The teacher was saying, “start your calculation with how big a commission you want to make, and price the loan accordingly.”

There are honest mortgage brokers, and then there are crooks. Ask your friends for referrals, and check your terms against bankrate’s averages for your state. Don’t be afraid to ask if you’ve been offered the best deal.

I often say I threw out my crystal ball a long time ago, but I’d say now’s the time to put a commission in your favoriate mortgage broker’s pocket and look at refinancing your house. I managed to catch a 5.375 rate several years ago, and that was close to rock bottom. We haven’t seen it in some time, but we’re just about there, with Bankrate showing the average 30 year fixed conforming mortgage at 5.44 percent. Don’t quibble over a few basis points.

Market rent growth is as important, if not more important, than in-place cash flow. Novice buyers focus solely on barometers of the “here and now,” e.g. capitalization rates and in-place returns. Learn to make cash flow projections and calculate an internal rate of return. You can buy a fancy program from Argus or you can do it in Excel. Don’t know where to start? Take the ccim 101 class. Take all their classes for that matter. They will pay for themselves many times over if you are making a career in real estate. Doesn’t matter if you’re flipping houses or buying million square foot warehouses, it’s a great program.

at the end of a long meeting yesterday with a very kind and soft spoken prospective buyer eager to buy one of my listings and cull information out of me, he pulls a 4 inch crumpled number 10 envelope and shows it to me: a big wad of cash. “Get me the deal and this is yours: ten thousand dollars.” Promptly stuffs it back in his pocket. Never seen anything like that happen before. I wonder how many agents have taken money like that. I’m sure it happens all of the time in other pars of the world….

an old cliche, I know but one many brokers forget. close mouth. engage ears and brain. make more money.