Stay Away From Deal Killers

Stay Way From Deal KillersIt’s true that there are some issues that simply crop up during the course of a loan transaction, and it is often difficult to predict or prevent them. Yet, right at the start, there are often clear red flags of issues that will kill a deal—or significantly change the direction you need to take. If you can recognize these red flags for what they are, you can nip those problems in the bud and save a great deal of time. Here are some common ones:

Credit

Find out what your borrower’s credit score is! I know many of you are not set up to pull credit, and many lenders pull credit in final underwriting only and use broker-pulled credit at loan submission, or go off the estimate provided. Borrowers often think they know their credit score but often are not honest with themselves (or you) about it. If at all possible (and if authorized to do so), pull their credit or send them to www.annualcreditreport.com (for an FTC-sponsored report free to consumers every 12 months) or to www.freecreditreport.com, to obtain scores themselves. A clear picture of credit worthiness (and the ability to examine a borrower’s report for any issues) will eliminate a slew of potential problems that could come up down the road. Be aware that some free credit reporting websites have a wider spectrum of scores for borrowers and don’t give an accurate representation of credit. Make sure that the credit report range for the site your borrower is using is between 450 and 850; if your borrower is getting a credit score of 680 on a scale from 350 to 950, its going to significantly skew their actual credit risk profile.

Foreclosures, Bankruptcies, Judgments and Tax Liens:

These are all items which will almost certainly disqualify a borrower from conventional financing, and although lenders have different guidelines with respect to the timing and status of these issues, they are always viewed as negative. Be sure to ask your borrower, up front, if such issues exist and, if so, get a clear explanation of why, when, and what was done or is being done to remedy these action(s). If your borrower is unsure if he has these issues or you don’t feel he is being forthcoming, check the “public records” section of this credit report, it will disclose any of these potential pitfalls.

Value

Clients almost always think their properties are worth more than they are. Do some extra leg work and check up on value. Call a local realtor, ask for a recent or even older appraisal, or look for recent comparables. A solid grasp of value, early on, will set clear expectations going forward. If you feel your borrower’s value estimate is unreasonable so will your lender. Save yourself some time and look professional in front of your investors by determining an accurate value estimate upfront.

Environmental

There are very few lenders that can work around an environmental issue, whether conventional or private-money. If there is one, your deal will likely die, so ask about it up front and request a recent or even older Phase 1 report, if available. Often Phase 1 reports are very extensive and can be hundreds of pages; to quickly determine if there is a potential issue, skip to the “conclusions and recommendations” section and look for the words: “No further action”.  If there is a Phase 2 or Phase 3 report, you likely have trouble on your hands. Phase 2 reports are only ordered when additional soil, ground water or further testing needs to be done. A Phase 3 report means that actual environmental remediation is being, or was done and this could be good or bad. If the remediation was completed and the state has given the property a clean bill of health then you are in the clear, if there are still lagging issues after a Phase 3 has been done—walk away.

To Do List

The “To-Do” List: Your Key to Productivity

To Do ListEver feel you have been super busy all day, but really got nothing done? Or forgot to do something really important? If this is you, you’re either not managing your to do list effectively or worse, you don’t have one!

Managing a To Do List is one of the most important skills successful people in business have. It is fundamental in effectively navigating through a busy work day and making sure crucial tasks are accomplished.

By keeping a To-Do List, you make sure that your tasks are written down all in one place so you don’t forget anything important. By prioritizing these tasks, you concentrate on what needs your immediate attention, and what you can leave for later.

Although, keeping a properly structured and thought-out To-Do List sounds simple to do, you’d be surprised how many people fail to use them effectively. This article should give you a few pointers on how to make the “To Do List” your best friend.

Creating Your To Do List

Ironically, the first thing to do each day should not be your to do list—it should already be waiting for you when you arrive at your desk.  Here’s what you should do:

  • Put aside 15 minutes at the end of each day to write tomorrow’s to do list.
  • Make sure you check tomorrow’s calendar and schedule to see how it may affect your list. (Tomorrow’s to do list will likely consist of meetings and any crucial deadlines that are fast approaching)
  • Consult today’s to do list and focus on any outstanding tasks. (These remaining jobs will likely feature on tomorrow’s list)
  • Take into account previously skipped tasks. (If you’ve bumped a task from one day to the next, this task should automatically get a higher priority)

Now with these key points in mind, write down the tasks you will be facing. For the time being, don’t worry about how important or unimportant they are. Focus on creating a list of what you need to get done. Do this until you have listed everything that you have to do, with all tasks shown as manageable pieces of work.

Prioritize

Now that you have your list, run through the tasks and LABEL them with a level of priority.  When it comes to prioritization, people use different criteria to determine how their tasks should be ranked. Some use a color coded system, while others use the basic number system. There is no right or wrong way to go about as long as it works for you. I personally find that a traffic light system works best. See below:

Productivity Light

After your to do list is complete, quickly scan through the items and classify them with the above colors in your head. Grab some fluorescent pens and mark each task with its respective color, and then review.

Using Software

Although using a paper list is an easy way to get started, software-based To Do Lists can be more efficient. These can remind you of events or tasks that are due soon, they can also be synchronized with your phone or email, and they can be shared with others on your team, if you’re collaborating on a project.

With so many time management software programs available, it’s hard to know know which one to use. You can simply use MS Word or MS Excel to manage your To-Do Lists. Some versions of Microsoft Outlook, and other email services such as Gmail, have task lists and To-Do Lists as standard features. One in particular,  “Any.do“, is a popular online task management tool that will sync your information on the cloud allowing access across multiple platforms. It can even show you your To-Do List tasks on the calendar. Other similar services include Todoist and Podio which provide added features.

TodoistTodoist allows you to manage projects of any complexity by creating nested-tasks, adding deadlines, assigning priorities, and using color-coding. Also, Todoist automatically synchronizes your tasks across all your devices – smartphones, tablets, laptops, desktops – so you always have up-to-date access.

PodioPodio is a social collaboration platform that allows teams to create customized work spaces for internal and external workflows.  It helps groups manage and complete projects more effectively while eliminating redundancy and reducing 1-on-1 communication (This option maybe too much for your everyday needs, but worth taking a look at when tackling big projects).

One of the biggest advantages to using a software-based approach to manage your To-Do List is that you can update it easily. For example, instead of scratching off tasks and rewriting the list every day, software allows you to move and prioritize tasks quickly.

Key Points:

Key PointsTo be well organized, you need to be using a To-Do List. By doing so, you will ensure that:

  • You remember to complete all necessary tasks.
  • You handle the most important jobs first, and don’t waste time on trivial tasks.
  • You don’t get stressed by an overwhelming number of unimportant jobs.

To draw up a Prioritized To-Do List simply jot down all of the tasks that you must carry out. Mark the importance of the task next to it, with a priority from 1 (very important) to 5 (unimportant). Rewrite the list into this order of importance. Then carry out the jobs at the top of the list first. These are the most important, most beneficial tasks to complete.

Using a software-based approach to manage your To-Do List has added advantages. Many programs, in today’s market place, can be synced via the cloud which gives you access to your information everywhere including your smart phone, which make it much easier to manage, prioritize and move tasks around.

Avoiding Time Traps

Avoiding Time TrapsOur paychecks and reputations depend upon putting financing together for borrowers who often have difficulty obtaining it, so looking for reasons why a loan won’t work can certainly seem like a step in the wrong direction. Yet although I routinely encourage pursuing niche borrowers and difficult-to-finance deals, you need to be able to recognize a deal that will eventually have a light at the end of its tunnel, as opposed to one that will only end in a black hole. The best way to avoid a transaction like these is to look for indicators that it might not be viable, at the very beginning of the process. But (especially if you are new to this business) how will you know the red flags when you see them? Commercial real estate financing can be complex, and even the most seasoned professional can miss an obvious trap, so how are you supposed to catch one? The short answer is: Know your lenders! Each lender you may work with has very specific guidelines as to what they can and cannot finance. Often there is flexibility within those guidelines (and certainly nuances) but, in general, before you send over a deal, you should have access to a clear-cut picture of what financing they supply. Almost all lenders publish either specific parameters or general overviews/program sheets of their offerings. Review those program details and you’ll have the tools you need to save time!

Work on Loans With a Chance

The last thing you want to do when reviewing a transaction with a potential client, is wonder if it is something you can actually help them with. You certainly never want to be in the position of bringing in a loan without at least an idea of a few lenders that you could potentially bring it to. Having a transaction in hand—or worse, accepting an application fee on a loan request—when you don’t know where it is going, is a recipe for disaster. If you find yourself “hoping” that you’ll find a home for a loan that initially did not fit the guidelines of your current lenders, you are setting yourself up for failure. On the other hand, if you know up front what your lenders can offer, you can methodically dissect a client loan application or verbal summary to quickly align it with a potential financing source. Yes, some transactions will be borderline (do they fit your lenders’ stated programs or not?), and in that case you can run a scenario by your lender to see if it’s a fit—that’s what your lender’s rep or account exec is there for; to review scenarios, fill you in on additional guidelines, and give you feedback.

Don’t Bank on Exceptions

As early as possible after receiving a loan application, match up the loan request with your known program offerings, and if there is a clear mismatch, save yourself time, and pass on the transaction! (A clear mismatch does not mean a minor deviation such as a lender’s minimum credit requirement of 680 and a borrower with a 670 score, or a borrower needing a loan-to-value of 70% and a lender that offers only 65%. There are often ways to work within your lender’s programs if there are small differences between the loan request and the guidelines, or if the request still fits market tolerance.) It’s the obvious disconnects that should signal a quick pass: Did you receive a construction request for a strip mall and you don’t have any investor property construction programs? Pass. Got a financing request for an amusement park and don’t have lenders that will consider this property type? Pass. Have you received a request for a $100 million dollar purchase loan, and your lenders can’t go that high? Pass! Remember: The hours you’ll spend shopping a transaction that does not meet basic lender guidelines (and probably landed on your desk because it’s not financeable) are hours you won’t have to work the deals you can place.

Taking on Big Projects Effectively

Project ManagementHow often have you had a great idea for a new business opportunity, opening a new location or launching a new website? Many of us have had these moments of inspiration at one time or another, but then reality sets in and you ask yourself: How am I going to make this happen? Feeling overwhelmed is normal for entrepreneurs starting a new project, but the good ones are good at overcoming this feeling before procrastination sets in. Knowing why projects fail and how to manage them is the key to successful project completion. Let’s take a look at both.

Why Do Projects Fail?

There are many different reasons why projects fail. Some go over budget, some miss the deadline, and others simply do not meet overall expectations. If you stay in the project manager role for very long you are almost certain to come across some of them. By being aware of the most common reasons for failure, you have a better chance of avoiding them in the future.

Not Defining Clear Expectations
Expectations should be clear to all parties involved in the project from the beginning. Not identifying the key components that will deem a project successful is recipe for disaster.

Setting Unrealistic Timelines and Budgets
You can’t have it all… Product goals should fall in line with both the budget and timeline set in place. If expectations exceed the budget, you now have an impossible project to complete.

Scope Creep
This refers to gradual changes to a product that push it away from its original designs. Clear documentation and change control mechanisms are vital for this to be avoided.

Poor Risk Analysis
Try to identify potential problems during the planning stages. This will give you an advantage by helping you work around them before they even happen.

Poor Processes and Documentation
For projects to progress smoothly you MUST follow the processes and document all aspects of it. If you don’t follow processes and document events properly, do not be surprised if things don’t work out the way you want them to.

Poor Estimating
Use historical information and formulate lots of questions to make sure your estimates are as accurate as possible. Don’t leave anything to guess work. It will only cause frustration as the project moves farther along and deadlines are missed.

Poor Communication
Communication is extremely important during a project, and all key personnel should be notified of any critical issues. Doing so will make sure personnel is on the right page and avoid bigger issues as the project progresses.

Poor Business Case
A good business case will justify the business benefit of delivering a project. It also encourages team members to constantly monitor the project to make sure it still remains a good idea. This is important.

Making a Project Manageable

Project ChartProjects can be overwhelming if we don’t break them down. It’s easier to take on big projects by identifying the key components and breaking them down into smaller projects. This will aid in discovering and keep the individuals involved motivated as milestones are reached.

Step 1
Break down the pieces of the project which stand alone. A great way of breaking down these tasks is by mind mapping the project. If you are not familiar with this technique visit “Tony Buzan

Step 2
Place sub-projects in order of priority. For example, you can’t build the walls in your house until the foundation is completed, so the foundation must be on the list before building the walls.

Step 3
Assign qualified staff to each sub-project and give them deadlines. Allow managers and team leaders to view the entire project so they have an overall appreciation of the final outcome and see where they fit within the whole project.

Step 4
Stagger the completion deadlines so that you as the primary project manager don’t get overwhelmed at one time with approvals and changes. Consider a 30-day spacing of deadlines or a timeline consistent with the amount of time you’ll need to review each sub-project.

Step 5
Include progress reports into a master file that shows the progress you’re making on the big picture. Give clients reports on the entire project rather than detailed data on sub-group activities. Clients are more interested in the final results than the steps it takes to get there.

Conclusion

Simply delivering a good quality product does not mean your project will be a success. To avoid failure, make sure you have identified the right business requirements, created an achievable goal, put strong project management into place, implemented high-quality standards, focused on benefits, and monitored your changing environment.

Most importantly, be sure to manage the expectations of your stakeholders, so that they stay supportive. These people will be the ones who will decide whether your project was a success.

Go Green in 10 Simple Steps

Fluorescent BulbsIn recent years, environmental concerns have become greater than ever. Lots of us are recycling at home, but many businesses still believe that going green is difficult and requires a lot of hard work. In reality, there are several simple ways that businesses can go green and reduce their impact on the environment – as well as reducing their outgoings, since going green is all about minimizing waste.

Many business owners think that efforts to reduce their carbon footprint are too expensive or difficult. This could not be more wrong. By making a few changes to our daily routine we make a big difference in our communities. Here are just a few:

Go for “Greener Options” in the products you buy.
businesses today can choose from a wide range of high-quality products that are equal in performance to traditional products, but can result in lower waste, fewer chemicals, lower energy use and less material use. Green options also can save you money. For example, re-manufactured ink and toner cartridges are less expensive than new cartridges; and Energy Star qualified office equipment can save up to 75% in electricity use.

Buy re-manufactured ink and toner cartridges.
Re-manufactured ink and toner cartridges cost an average of 15% less than national brands and come with a 100% money back quality guarantee. One returned cartridge keeps approximately 2.5 pounds of metal and plastic out of landfills. Re-manufacturing one toner cartridge also conserves about a half gallon of oil.

Recycle your office paper.
Only about 50% of all the paper used in North America is recycled. And there is a growing shortage of paper available for recycled products as Asian countries demand more recovered fiber. Consider starting a paper recycling program at your office. surf the web to find paper recycling companies in your area.

Recycle other office materials.
A high proportion of materials sent to landfills from most offices can easily be reused or recycled.You can recycle plastic and glass bottles, aluminum cans, cardboard, computers and cell phones. Check your phone directory for local recycling providers and help reduce the pressure on our overflowing landfills.

Use Digital Storage Solutions to reduce paper consumption.
Digital storage has become extremely cheap over the years. You can get a 1TB for just over $100.00, and will hold hundreds of thousands of files in a device that fits in the palm of your hand. Cloud computing is another option that will store your files remotely and has added benefits.

Buy Energy Star qualified electronic products.
Energy Star computers, printers and other business machines power down when not in use. They can help you conserve up to 75% of your electricity compared to standard models. By automatically switching equipment to “sleep mode” when not in use, Energy Star products saved Americans more than $3.5 Billion in energy costs!

Use compact fluorescent bulbs.
Switching from incandescent bulbs to energy-efficient compact fluorescent bulbs delivers outstanding efficiency — up to 75% energy savings for Energy Star qualified lights. That translates into significant cost savings as well as waste avoidance since compact fluorescent bulbs can last over 10 times longer than incandescent bulbs. These bulbs fit standard fixtures and deliver excellent natural light.

Use power strips to turn technology off when not in use.
Up to 75% of the electricity used to power office equipment may be consumed while the products are turned off! The simplest way to avoid this waste is to plug office equipment into a power strip that can be shut off each day.

Invest in modular furniture.
Modular components form the core of an environmentally efficient office design. Buying modular furniture helps you mix, match and grow without the need to reinvest in an entirely new look simplifying future purchasing decisions and reducing waste.

Donate unwanted products and furniture.
For major businesses, signing up with an organization like Gifts In Kind is straightforward and helps reduce waste, helping your community! Visit Gifts In Kind International’s web site here to find a better use for your end-of-life products.If a formal program with Gifts In Kind isn’t feasible for you, check with local charities. Many will be only too happy to take products that you can no longer use.

By the time you’ve taken a few of these steps, you’ll probably be thinking of other actionable ways to present a lighter environmental footstep. And that’s how meaningful change begins: consistent, incremental improvements to the way we manage our business and community resources.