Investors say – More is better than Less and Sooner is better than later

While is seems simple to say that more is better than less and sooner is  better than later it goes a little deeper than that. A lot of investors, particularly if they are small investors, agree with this concept but don’t always know what to watch for or how to calculate it. One of the tools an agent can use that will be helpful for an investor/client is a CFA ( cash flow analysis) worksheet that will project the performance of a property out a number of years. The number of years might be determined by the investors requirements. A lot of investors like to project out 10 years even though the further out you project the less reliable the information will be. As an agent this will give you an opportunity to stay in touch with your client over time. By watching the things that are going on in the market you can make suggestions to your client as to the possible best time to sell.  Analysis the performance of the property on a regular basis to determine how it compares with the CFA projections and ascertain if it still meets the investors criteria. By following recent sales in the area, sales CAP rates, the number of like units sold as well as new product coming on line.Commercial Real Estate Success by the NumbersTaking these thing in to consideration will allow you to keep your client informed. Let’s say that the investor was looking at an after tax return of 8%. If a sales price based on the current CAP rates would show an 11% return an investor might want to take advantage of the current market and sell now. He/she might want to reinvest the proceeds into another property which might provide you with an addition sales opportunity. Another benefit to providing information updates is to help  provide you a referral base. Satisfied clients tell other people.
Good follow up with clients will provide you with a steady income. Because of additional sales and referrals you will find that you will spend less time and money trying to attract new customers. Remember that more is better than less and sooner is better than later and always be on top of the market so that you can give good information to your client to help in the decision process.

 

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