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Category Archive for: ‘Sometimes I Have to Rant’

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    What You Should Know If You Work With Me

    One of the most exciting things about a young career in real estate is that you get to know yourself and your quirks as you figure out your place in this business. Learning simple things like how, when, and where you like to work is incredibly useful if you recognize and use that info.

    With that in mind, I try to be keenly aware of what conditions make me most effective and what type of environment will allow me to thrive.

    So what follows is a guide to any future business partners.

    It’s not an ultimatum. Nor is it a rule book. In fact, this is just a snapshot of what makes me most effective in business right now. It may change over time, but I doubt it. Most of these are lifelong preferences/ideas and not passing fancies.

    So, here is what you should know about me if we are going to work together . . .

     

    A. Ethics are non-negotiable

    If you and I don’t see eye to eye ethically, we shouldn’t be partners. I know that sounds preachy or moralistic, but if we are coming from different ethical perspectives we won’t get along in the long term. There are so many deals to be done and properties to see that no single deal is worth sacrificing your ethics. If there is any ethical “gray area” in a deal, kill the deal. We’ll find a better one anyway. Don’t hurt other people, don’t sabotage, don’t exact revenge, don’t trick people. You can make money being honest and upright with everyone and, to paraphrase Twain, there is less to remember when you tell the truth.

     

    B. I love helping other people make money or solve problems

    Maybe this plays to my generation’s obsession with meaning over money, but being able to help people resolve financial problems or come to mutually beneficial arrangements is fun to me. That makes me feel like I spend my day doing more than try to make boat loads of money. That is more fulfilling to me than a six-figure paycheck (some people get paid six figures right?). I’m not curing cancer or solving water shortages in Africa, but seeing my allies and adversaries walk away from the closing table with a smile is satisfying to me.

     

    C. I am honest to a fault

    This may come across as arrogant, but trust me when I tell you that my penchant for extreme honesty is not always an asset. It’s great that people know they can come to me for direct, honest answers and information. But I tend to divulge more than I should and would rather have all parties know all available information. That doesn’t mean I go out of my way to tell trade secrets to my competitors, but asymmetry of information bothers me even if it is tipped in my favor. So, if you are going to partner with me, you should know that I will always tell you the truth, but you should also know that I will tell everyone else the truth. Like I said, that is both an asset and liability.

     

    D. I would rather you make more money than me

    Let’s say that I own a company and you are the CEO. I will gladly pay you $150k to my $100k. Or $70k to my $50k. If you are my partner, I want you to know how much I value you. You should know that I appreciate you enough to compensate you beyond my level of compensation because I think you are more important to the partnership than I am. If you are ever unsatisfied with your compensation or percentages, talk to me. I want you to feel like I pay you more than you are worth. Is that a way for me to get rich? Probably not. But having happy partners who love working with me will mean more to me than the zeros in my Suntrust account. And happy partners are productive partners. Productive partners are lucrative partners. So keeping you well paid will work out fine for me in the long run anyway. Even if it doesn’t, I doubt I will regret paying a partner a bunch of money. If I recruit you, you deserve it.

     

    E. I give money to charity

    Maybe I should change this header to “I run corporate finances like I run personal finances.” We operate on 80% of our income because 10% goes to charity and 10% goes to our emergency fund. We can argue over the other 80% until we are blue in the face, but that 20% is untouchable. We can decide together which charity or charities deserve our cash. When revenue increases, I’ll probably increase our cash holdings. I don’t like debt (especially corporate debt). Having been a lender and now a successor creditor, I can tell you that the borrower truly is slave to the lender and I want to minimize that with my business partners. I am pretty conservative with my money and like my war chest to be heavy. Food for thought for anyone expecting 50% returns on their capital and maximum leverage on their portfolio. You probably aren’t a fit for me.

     

    F. I have a life

    I could throw around the cliche about “working to live instead of living to work,” but you probably already know that about me. I coach baseball. I am in two terrific men’s bible studies. I run this website. I have a personal investment portfolio I work on weekly. I work out. I run. I am crazy about my wife and dog (and one day kids, hopefully). All of that is to say that there are several things that demand my time weekly. You, as my partner, deserve my time and should demand it from me. But understand that I will draw the line. I don’t answer the phone on Sundays or during dinner with my family. If you are the kind of person who works until 10 PM every night and expects me to do the same, talk to someone else. I’m not that guy. I work my brains out when I am in the office and I strive to be the most efficient man in the business, but I do not throw hours at a problem and I will not sacrifice my family life for our financial gains. Sorry.

     

    G. I want people to love working with me

    Perhaps my first goal in creating partnerships is to structure an environment where you want to come to work every day. I want your head to pop off the pillow every morning and know you have a brother ready to go to battle with you. Sure, there will always be problem tenants, difficult deals, accounting mistakes, government delays, and a thousand other headaches that come with deal-making. But I hope you enjoy fighting those battles with me. If you don’t, talk to me about it. Let’s make an environment that you love and find fulfilling.

     

    H. I trust people

    Probably too much. I love working with my friends and I love that our industry is full of so many great men and women. The problem is that I am inherently trusting and will assume that everyone I meet is a good person unless they give me a blatant reason not to. I wouldn’t say I am gullible, but I do tend to give people the benefit of the doubt and allow them to impress or disappoint me. So it would be useful to have a potential partner who has a healthy level of skepticism and pessimism to balance out my sunshine and rainbows.

     

    I. I value creativity and flexibility

    Don’t like what you’re doing? Change it. Think the market is shifting? Shift with it. Think one property type is overheated? Let’s pursue others. Wanna buy cell towers in Botswana? Cool. Let’s figure it out together. I think the days of “I’m a single tenant retail broker for 40 years” are behind us. Shift. Adapt. And have fun. I can be as flexible and creative as you like and I hope you challenge both of us with new ideas, strategies, and investment models. Bring it on, hot shot. We’ll figure it out.

     

    J. I’m a wanderer

    I may be speaking too soon, but I don’t think I would be satisfied with a career that only involved Atlanta. I love Charlotte. Nashville has impressed me. Phoenix is growing like ATL. San Antonio is under the radar. Chile is undervalued. India is ripe. While it is way to soon to expand anything oversees, it is fun to be strategic about national and international investment platforms depending on your capital. So, while I may never own apartments in Melbourne, I would be surprised if I only work on Atlanta deals for the rest of my career. Atlanta will always be home base, but there are other interesting cities and opportunities all over the world and our business is getting more and more connected globally every day.

     

    K. Answer this question:

    “I don’t know anyone who is better than me at______”. Fill in that blank and then do that blank everyday. Every minute you spend not doing that “blank” is a wasted minute. I will do my best to outsource, offshore, delegate, and automate everything else for you. If you really want to shine, you need to do that “blank” as often as possible every day. We will have to scramble and do everything ourselves for a little while, but we will be keeping an eye toward focusing on what we are best at doing.

     

    Now the real question is: Who would want to work with someone like that? I dunno. But just in case someone thought it was intriguing, I figured I would write it down.

    Do you have any special quirks or stances that make you productive? Anything unique to your ideal working situation? Let me know in the comments.

    – Duke

     

     

  • We Built This City on Eth-nic Foooooooood!

    Brookhaven!!!!!

    So Brookhaven’s a city.

    And now I live in the suburbs again. Dang it.

    Oh well.

    Now it’s time to see how a city is built. I have a few friends and neighbors who were heavily involved in the creation of the new city and I will be working with them over the next few months to figure out how this whole shin-dig is going to play out.

    I see from the BrookhavenYes site, that the city begins operation on December 17th of this year. Presumably there is a ton of work to be done when trying to create a new government from scratch.

    Between now and then, I have a few questions that I would like to have addressed:

    What about the budget? Who makes it? Who approves it? How is it balanced?

    What about taxes? I’m told that they will be low (3.35 mils), but why do we think we can run a government with lower tax revenue than any other government?

    What about the big three? Atlanta’s three biggest problems are transportation, water, and education. What are we doing as a new city to address those?

    Where will town hall be? Where will any of the Brookhaven government buildings be?

    What is the election structure? Who are we electing and when do we elect them to plan this party?

    When do all these new policemen start patrolling?

    What about zoning? I’m familiar with the Brookhaven-Peachtree Overlay District and its zoning requirements, but what will this new animal want in new developments?

    A decent resource for new residents of Brookhaven

    While you ponder those vexing queries, here are a few resources for you to conduct your own research.

    Brookhaven Yes FAQs

    Brookhaven Map

    Google Map of Brookhaven

    Brookhaven Yes Board (J Max Davis seems to have all the quotes)

    Brookhaven’s Wikipedia Page

    AJC article on the challenges facing the new city

     

    What do you think about the new city? Are you optimistic, pessimistic, legalistic, masochistic? Do you have any more resources? If so, please share them in the comments.

    – Duke

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  • When I grow up, I want to be Jordyn Wieber

     “It’s not how far you fall but how high you bounce that counts” -Zig Ziglar

    Fine. I’ll admit it. I’m addicted to the Olympics.

    I LOVE watching our country compete in anything and the Olympics create this unique, high-tension environment where everyone is watching and Gold is on the line.

    Say what you want abut NBC, they are dominating my DVR right now. (I recorded the weight-lifting championships yesterday!)

    I even get into Women’s Gymnastics.

    Yep.

    I’m a 27-year-old, testosterone-filled meat-head and I like watching our girls flip around on balance beam, uneven bars, vault, and floor routine. Don’t judge me. Blame it on Kerri Strugg. I was 12 when she stuck that vault in ’96 a few miles away from where I was sitting. I’ve watched ever since.

    So, it should come as no surprise that I was watching this past weekend and I was watching last night when our girls, the so-called Fab Five, were competing. I’m not a sports reporter and I know a little-more-than-nothing about Gymnastics (I’m 6 foot freaking 7), so I will leave the details and superlatives to the experts.

    What I do know is courage and toughness.

    It’s the double-edged sword of sports that we can see the best and worst about us. You can know some of the most extreme highs and intense lows through competition, and sometimes they happen in the same week.

    Enter Jordyn Wieber.

    Wieber, as I am told, is the defending world champion in the individual competition. In my basic understanding of the sport, that means she is the best all-around gymnast on the planet.

    In the Olympics, girls compete on the team level and individual level. Their qualifying scores from this weekend determined who would qualify for the individual finals and which teams would qualify for the team finals. Through a quirk of the Olympic rules, only two girls from any one country can qualify for the individual finals. So, even if the U.S. has 4 of the top 5 gymnasts on the planet (which I am told is true this year) only two of the four can qualify for the individual finals in the Olympics.

    Again, I will leave the drama and sportscasting to the pros, but Wieber ended up placing third or fourth of all girls and two other Americans placed ahead of her.

    The reigning world champion did not qualify for the individual finals.

    NBC made sure to get a ton of close-ups of her sobbing into her hands as soon as she learned she wouldn’t qualify and in one particularly torturous shot they showed the U.S. teammate that beat her in the foreground as she was crying in the background. (Sometimes I think you have no soul, NBC.)

    But Wieber’s Olympics weren’t over. She still needed to compete for the team title for the U.S.

    Long story short, she did so last night and led our girls to their first gold medal since the aforementioned Strugg killed it in ’96. She was terrific. She was the team leader and maybe the best performer in the gym last night in London. Knowing that all personal accolades were gone and any individual medals were hopeless, she still went out and crushed it and led our country to a gold medal.

    Cool story. Queue the epic music. Wave the flag. And so on.

    Yeah, I was proud of her and proud of my country. But more than that, I was motivated. Whatever Wieber has inside of her, I want that.

    You may wonder what Olympics gymnastics has to do with commercial property in Atlanta.

    Well, you may have noticed that the last 5 or so years in our economy haven’t been so great. We aren’t exactly sailing smoothly. Some of the greatest names in our business in the last 20 years have retired, gone bankrupt, or just folded and drifted away.

    We are an industry that literally built the city of Atlanta. Yeah, we have Coke, Home Depot, UPS, and some other cool businesses here. But, at our heart, we are a commercial real estate city. We led all major U.S. cities in growth over the last 10 years (prior to ’08-’09).

    Our industry was home to the leaders and innovators in a great city heading for great things.

    Then 2008 came along. We got hit. We got black eyes. We lost momentum, time, and money.We lost chances at greatness. No doubt about it.

    But if little Jordyn Wieber can find the strength and courage to do what she did last night, why can’t we?

    Ours is a city filled with brilliant and talented people who have all been hurt by this Great Recession. Some of us have wanted to sulk into a corner and cry (and some of us have).

    But, you know what?

    The sun came up this morning. Today is a new day. Tomorrow is full of promise.

    And we still have something worth fighting for.

    This is a great city with a bright future and I’m excited to see where we can go. We have our issues to work out and demons to overcome, but we can be great and we just need another chance to show it.

    Maybe you went bankrupt. Maybe you damaged your reputation. Maybe some great relationships have come to an end. Maybe you lost your life savings. Maybe some dreams died.

    Cry. Get upset. Get angry.

    And then move on.

    We have some great things we still need to do around here, and our teammates need us to step up.

    So, here is a toast to Jordyn Wieber and a toast to all of us. She showed us what we all need to do after a crushing blow. Move on, keep competing, and act like the best.

    Do that . . . and greatness will never be far away.

    Thanks Jordyn.

    – Duke

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  • 5 Lessons I’ve Learned After 5 Years in Commercial Real Estate

     

    This is me in the office. Quite the grizzled veteran, yes?

    I just got back last week from my 5 year reunion at my alma mater. Apparently that’s a rare event as some of my colleagues who went to UGA, Auburn, Tech, etc couldn’t imagine pulling together 10,000 people for a reunion.

    Luckily for us there were only 400 in my graduating class.

    As nice as it was to catch up with my old teammates and classmates, it got me thinking. I realized how much I had learned in my first 5 years in commercial real estate that I hadn’t anticipated when I charged into the world with my Bachelor of Arts in Economics.

    So, allow me to share 5 lessons I have learned in my 5 years in commercial real estate:

     

    1. He with the best habits wins

    I know I’ve touched on this before, but it really is true. Yes, there are big deals and huge strides made in every career, but I am convinced that the guy who sets out to create great habits for himself will end up “on top” on the long run. Your habits will catch up to you sooner or later. Will they boost you up or drag you down?

     

    2. Financial success and intelligence are only loosely related

    I’m using financial success as my measurement for success for the purposes of this point. It is amazing to me how much money was made between 2002 and 2007 by people I wouldn’t trust to handle $50. I know THAT time in our financial history may turn out to be an aberration, but it is staggering at times the amount of money made by stupid people. And commercial real estate is a self-proclaimed “B-student’s paradise.” Not that B-students are stupid by any means, but an industry that doesn’t claim to have A-students is, by definition, claiming not to have the tip of the academic sword (for better and for worse).

    All of that is to say: intelligence isn’t as highly correlated with success in commercial real estate as I had thought. The richest people aren’t always the smartest people. Intelligence certainly helps to distinguish yourself and there is a certain baseline level of intelligence that everyone in the industry must have. But this ain’t rocket surgery.

     

    3. There are very few truly creative people in ANY industry

    I want to keep this statement broad because I have noticed that this phenomenon isn’t unique to CRE. I find that there are only a handful of truly innovative and creative people in any industry.

    Taking a concept that worked well in Dallas and bringing it to Atlanta isn’t all that creative. It’s highly logical, but I would consider it par for the course. Even taking a concept from Dubai and bringing it here isn’t all that creative. All you’re doing is copying someone else’s great idea. True innovators create new products, reinvent best practices, and can reshape the entire CRE community. People like that are rare.

     

    4. There is almost never black and white – only grey

    I learned this from my time in private equity as we go through foreclosure and bankruptcy proceeding in GA and FL. According to the loan documents, our case is almost always cut-and-dry and in our favor. The borrower almost never has a strong case, legally. But borrowers do sometime win these cases.

    If they get a borrower-friendly judge or jury and argue their sob-story well, they CAN win. In my mind, this is ludicrous because I can plainly read the loan documents that said “I will pay you back or you can take everything I own no mater what.” I don’t see room in there for much interpretation, but apparently I’m wrong.

    This idea also plays into the “gut” or “art” part of our business. Anybody can run good numbers and spot a decently located property. The best of the best have this “gut” instinct to know when to pursue a property that is in that grey area between the black of “no” and the white of “yes.” They buy or sell when others are hesitant and they make a killing doing so. That is the grey area that I need to get comfortable playing in or I will be surpassed by those who are.

     

    5. The best people in the business love what they do and would probably do it for free

    You know these men and women. They love leasing retail space or building hotels or buying shopping centers. If they didn’t get paid to do it, they’d do it anyway. Their career is fun and fulfilling to them.

    I think I covet that feeling more than any other in business. To know that you enjoy your role and look forward to performing every day is a gift that few of us receive. It has been my mission since shortly after leaving college to find that role for myself. As I mentioned in the header, people who find that role are not only the most fulfilled, but also are often the most successful. Work doesn’t seem like work to them. They are just having fun and happen to make money doing so. I hope you can find that role for yourself. Otherwise, you’re just getting up early every morning to collect a paycheck and you will have a perpetual feeling of swimming against the tide.

     

     

    Those are just the 5 that stand out to me. Obviously, I have learned a great deal more about the financial and technical side of our business, but those 5 stand out to me as particularly poignant and meaningful to my career.

    Has your experience been different? Did you learn different lessons than I did? Feel free to share in the comments.

    – Duke

  • The Internet is Commercial Real Estate

    Your turn for the limelight . .

    Lightning struck my brain this morning (figuratively) and I had an epiphany. It’s not really all that rare since I do some of my best thinking on my morning jog. But this one has stuck with me so I thought I would share it.

    The Internet is commercial real estate and commercial property deal-makers are uniquely suited to succeed in creating a web presence.

    I’ll start with the first half of the idea. At its most basic level, the internet is just a collections of places where you can see, do, and buy stuff. It is a collection of places for commerce, learning, working, and interacting. Sound familiar? Define commercial real estate . . .

    Through online collaboration (i.e. Basecamp) and video-chat ( a la Skype), the internet is now a place to work.

    The internet has become the ideal place to store and manage documents. Sounds a bit like self storage or warehouses, eh?

    Do I really need to draw a comparison between a shopping mall and Amazon.com?

    The point is: The entire theme of the internet is placemaking. You want to create a space where people want to be. It’s the exact same concept as commercial property.

    We, as CRE geeks, ask questions like:

    • How can I get traffic to my property?
    • How can I make visitors want to stay on my property?
    • What can I do to the layout of the property to optimize the visitor/tenant experience?
    • How can I entice shoppers to spend more money in my mall?
    • How can I give tenants easy access to my building from their commute?

    The web geek version would be:

    • How do I get traffic to my site?
    • How can I make visitors stay on my page?
    • What can I do to the layout of the site to optimize user experience?
    • How can I get visitors to spend more money on my site?
    • How can I get visitors into my site easily from their natural web-surfing patterns?

    Do you see that these are the EXACT same questions that require the EXACT same mentality and need the EXACT same skill set?

    We spend our entire careers figuring out how people interact with places and that is exactly what web traffic is about.

    I would even go so far as to contend that there is no group of people on the planet better suited to innovate on web traffic patterns and user experience than commercial real estate professionals. It’s our entire career. It is how we have made our living for every year of our professional life.

    Need further convincing? Ok.

    Web addresses. Do you know why every site builder and designer wants a “.com” address? Of course you do. Same reason all of the office buildings in Atlanta want “Peachtree St” addresses. Everyone knows it and everyone goes by it.

    Why is blinds.com a better web domain than woodblindsofatlanta.com? For the same reason that “Atlantic Station” is a better label than “that brownfield development on the old Atlantic Steel site off the connector.” It’s short, pithy, and people remember it.

    Why do web designers spend so much time on their tags and categories? For the same reason you spend so much time studying the demographics around your retail center. You want to know what your target customer is looking for.

    Is this exciting to anyone else?

    I'm told it's my oyster

    Hopefully, those three examples didn’t teach you anything. You already knew the concepts because you’re a CRE pro who understands a customer or tenant’s interaction with property.

     

    So, what I’m telling you is very simple:

     

    If you are in Commercial Real Estate, you are ALREADY very well equipped to succeed in creating a web presence.

    It’s all the more exciting because deals and properties are finite. As the saying goes “They aren’t making any more land.” Well, apparently there’s a fresh supply of internet. We may be hindered by geography, financing, capital markets, or something else in commercial property. On the web, you are limited only as far as the human mind is limited. If you can imagine it, someone can probably create it.

    So, here is the real question:

    What are you going to do about it?

    I’ve just told you that you have an unparalleled skill set that makes you uniquely suited to succeed in a limitless environment. You have a chance to be utterly dominant at building a corporate brand, expanding your influence, growing your skill set, and yes, even making money through the web.

    What are you going to do about it?

    Hit me up in the comments.

    – Duke

     

  • Millenial Manifesto: Working Environment

     

    I was raised to work on multiple, varied projects quickly.

    I had an epiphany about myself and (potentially) my generation this week and I want to share it with you briefly.

    When I turned 8 years old, the pace of my life started picking up. That’s when I started playing football, basketball, baseball, and any other “ball” sport.

    Being the son of two hard-core Christians, I also went to church at least every Sunday and Wednesday and usually had some type of youth group event every week.

    I also begin reading books more regularly and began to get into a routine of nightly homework.

    The point is, I did several different things in one day. On a typical day, I might get up, go to school, have an afternoon practice, have an evening church event, do my nightly homework, and then read or watch TV until bed. That’s 6 different events in 6 different environments.

    High school was even more involved. Morning lifting for football, 6 periods of school, afternoon football/baseball/basketball practice, evening church or worship/FCA event, nightly homework, and then bed. Again, 6 different activities in 6 different places.

    Moving on to college, the schedule looked something like this:

    • Get up, fool
    • Run or lift
    • Class until early afternoon
    • 3 hours of baseball practice
    • Evening Worship Service
    • Homework
    • Family Guy with the Roommates
    • Bed

    So, by my count, that’s 7 or 8 things in 7 or 8 places.

    Something else I would like to point out is that I went to a Liberal Arts college. So I was studying a diverse array of subjects for each of my four years. I was an Econ Major, Spanish Minor, and had a pretty serious concentration in New Testament Studies and History. That’s 4 different subjects I studied heavily almost every day and that doesn’t even include the courses I took on Galileo, Chemistry of Art, Beginners Japanese, etc. The point is, my studies in school were widely varied and diverse.

    If your elementary, middle, and high schools were anything like mine, you know what this is like. First period is biology, followed by anthropology, followed by calculus, followed by English, and on and on and on. In school I jumped from subject to subject in short one hour or 90 minute bursts (and I bet you did, too). The above line-item of “Go to class” included very different experiences every hour or so.

    Ok. So what’s the point?

    The point is: I spent 15 of the first 22 years of my life learning how to accomplish great things through short bursts of intense focus. Since I only had 50 minutes every day to learn AP Calculus, I had to learn to adjust my temperament to an extreme and intense focus for a short period of time, then move on and do it in the next class/practice/event.

    Yeah. So?

    So, then I graduate from college and I am looking for a job (because that’s what you are supposed to do, right?). And guess what these employers are selling?

    It goes something like this:

    Duke, we want you to sit at your desk for 10 hours every day and do the same thing all day! Doesn’t that sound great?

    Come again?

    You are basically asking me to do the exact opposite of what I have been trained to do for 15 years. That’s like telling me to 1) take the only way you know to accomplish diverse tasks,  2) forget it, 3) do it OUR way, and then 4) be grateful for this generous offer.

    What?

    Let me out of this conference room!

    I’m not here to turn the business world on its ear, but can you see the lunacy is this? I understand that there are certain pre-existing constructs in every work environment, but asking someone to be productive in a manner that they have never been productive before is a little silly.

    I will get into ways an employer can configure the work day to play to Gen Y’s strength and productivity, but for now I just wanted to point out the fundamental conflict between the way I was raised to accomplish and the way I am asked to accomplish at work.

    Think about it this way:

    What do admissions officers at universities look for in prospective students? It’s not just about the highest test scores or grades. They (allegedly) look for the proverbial “well-rounded” student, right?

    How about employers? When McKinsey is scouring Ivy League campuses are they looking for the smartest nerd in the business school with the highest grade? Nope. They want a young man or woman who has demonstrated excellence in several areas at the same time. They want someone who is “well-rounded“, too.

    So, Mr. Employer, let me see if I have this straight. You want me to demonstrate that I have achieved excellence in multiple areas at the same time so that I can come and do one thing for you, in the same place, all day?

    Middle school was structured to get me ready for high school where a high value is placed on being well-rounded. High school gets me into a college where the admissions office heavily favors well-rounded students. College gets me ready to enter the workforce where the best employers want the most excellent students that are well-rounded. But once I enter the workforce I’m supposed to specialize at one single task all day every day and be the best at that.

    Hmmm . . .

    Am I the only one confused by this? Is anyone else struggling in this battle? Let me know in the comments and I’ll comment back.

    – Duke

     

  • Random Thoughts

    fatal-pics

    Crunched for time early this week, so I will stay random.

    1. I realized this weekend that CRE pros are like actors. Just because you can make some money on a deal doesn’t mean you should take it. You want to be Daniel Day-Lewis, not Eddie Murphy. (Sorry Eddie! We cool?)

    2. I still need to be convinced that there is demand for a BILLION DOLLAR gambling complex in Norcross. It’s a cool idea, but Norcross? I’m from Gwinnett County, but Norcross? We’ll see.

    3. Shout out to DDR for the SetUpShop concept they have been experimenting with here in Atlanta! Basically it’s like co-working space for retailers (kinda), and apparently they are killing it with those favorable lease terms.

    4. Who’s jacked up about the Brookhaven cityhood vote? I’m ashamed to say that I have no opinion since I don’t know enough about the pros and cons. What a terrible resident I am. maybe I should write a post about both sides . . . .

    pseudo-thoughts

    5. Decatur might as well be Macon. There is no direct way for me to get there from my home in Brookhaven or my office in North Buckhead. I know they have tons of tasty treats and may be the most walkable part of Atlanta, but I could get to the airport in 20 minutes and get on a plane to Dubai before I arrived in downtown Decatur.

    6. There has been some speculation that I am Duke Long‘s son. It is a fabrication. “The Duke” is my pseudonym that is used to preserve the liability of any of my employers or clients who disagree with my posts. My real name is Ron Mexico (and if you don’t get that joke then you ain’t from ’round here).

    7. By the way, if you haven’t checked out www.CRE-Apps.com yet, do it. If you are under 40, it will get you jacked up about the future of tech in our industry. If you are over 40, you will probably be unimpressed and mutter something about face-to-face interaction blah blah blah.

    8. I’m only half kidding about the over 40 thing. I have found many boomers and older Gen X-ers embracing and encouraging technology as a medium to transform and streamline our industry. But I find still more in that age bracket who like to talk about walking to work in the snow, life before the internet, and reading proformas by candlelight. Personally, I love when people refuse to embrace tech changes. That clears the path for me to have an obvious advantage over them.

    9. I’m reading The Power of Habit and it’s pretty good. Look for a review in the next week or so, but after reading most of it I still submit that “He with the best habits, wins.”

    10. I just hired a virtual assistant to help manage my schedule and research tasks and she has already saved me a tremendous amount of time over the last few weeks. It’s amazing how much I can accomplish when I don’t have to focus on the stuff I hate (research, data entry, paperwork, etc.). She is selectively looking to add clients. So, if you are interested, post in the comments and I will hook you up.

    That’s your weekly dose of random, kids. Now leave Daddy alone and let me get back to causing trouble.

    – Duke

  • 10 Things You Should Know About Your Creditor

    image courtesy WayneFontes.com

    I'M COMING FOR YOU!!!!

    Over the last few months I have been working for a private equity firm that acquires commercial mortgages from the FDIC. Through a structured sale, we purchase these notes and then share profit on the notes with the FDIC.

    You could call me a “Successor Creditor.” Note that I don’t go by “Lender.” Lenders want long-term relationships. I want resolutions.

    I have found that most of my borrowers are confused as to who we are and what we do. Once they get that, borrowers tend to be mystified as to how to deal with someone like me and my company.

    So I put together a list of things you should know about me and successor creditors and how we conduct our business.

    1. I Have A Soul.    I don’t enjoy making people unhappy. I’m not here to take your kids out of private school and send you to the soup kitchen. Every evening, I go home and tell my wife about my day at work and I have good and bad days like everyone else. So, speaking solely for myself, please understand that I am a real person who really wants to make a deal with you.

    2. I Get Paid For Resolutions.     As I just mentioned, my role is about making deals. I don’t get paid to hurt you. I get paid as loans sell, properties sell, and discounted payoffs are funded. It is not in the best interest of my employer to torture you for 18 months. Let’s make a deal and move on with our lives.

    3. I’m Not Afraid Of Bankruptcy.     Having said #2, I am not afraid to take my time and work through bankruptcy with financially crushed (or uncooperative) borrowers. I work through cases of Chapter 13, Chapter 11, and Chapter 7 bankruptcies on a daily basis and I talk to bankruptcy trustees regularly. So don’t think that threatening to go BK will scare me or make me go away. As a secured creditor, I am in a great position to emerge well from your bankruptcy and you won’t be able to borrow money from anybody for at least 7 years (more likely 10). So, go ahead and file BK if you want. I’d rather work something out with you, but if that is your preference. . . knock yourself out.

    4. I Don’t Have The Final Say.     Everything I do is subject to approval by credit committee. I can give you preliminary approval for a deal and I know what credit committee wants. I have never had to re-trade a deal before, but you should know going in that I don’t have final approval authority and it is possible that I will say “yes” and credit committee will say “no.” You can get mad at me all you want, but I am at their mercy just as much as you are champ.

    5. You Will Be Held Accountable For That Personal Guaranty You Signed.    When you borrowed these funds originally, you were so certain that you would repay this loan that you signed a document that said that you personally guarantee the repayment of these funds. You were so certain you would perform that you put all of your personal financial assets up for grabs if you didn’t. Then you didn’t pay. Now I have a legitimate legal claim to ALL of your financial assets (if your guaranty was unlimited and most of them were). Don’t try to walk away from that because it will just piss me off. Give me a deal that will satisfy the guaranty and THEN you can walk away. I assess the value of the mortgaged property and the value of the personal guaranty. If Donald Trump had a loan with us that was $200,000 underwater, I wouldn’t care because I would just ask him to write us a check for the shortfall. The property isn’t worth the loan amount, but Mr. Trump’s personal guaranty is certainly worth $200,000. So keep that in mind when you are negotiating with me. The personal guaranty needs to be satisfied before you can walk away from any loan.

    6. Honesty Is The Best Policy.    I do this all day every day and I have gotten very good at spotting liars. If you are upfront with me and show all of your cards, you will enjoy working with me. As I said in #2, I’m not here to hurt anybody. If you try to hide things, transfer assets to your wife, or simply refuse to cooperate with me, you will not enjoy working with my attorney. Tell me the truth and we can be allies in finding the best solution. Lie to me and my attorney will crush you financially.

    7. Effort Counts.    Remember that I am selling your resolution to credit committee. I want to tell them that “Mr. Borrower has done everything he can; begged money from relatives, sold his collection of baseball cards, and moved into an apartment to help us resolve this loan. We need to approve this deal.” I’m not telling you to move into an apartment, but work hard trying to find creative ways to come up with cash and financing options! There are hundreds of private lenders and wealthy family members out there willing to help if you go look for them. Turn over every stone and we WILL get a deal done. If I get the impression you are sand-bagging or not even attempting to find a resolution, then my attorney will give you a little kick in the rear to get you going. One way or another, you are going to have to do some work to get this deal done. I’d rather not do it in court. Just put in a little effort and find a way to get a deal done and let’s move on.

    8. The Law Is On Our Side And We Have More Money Than You.     Some of my more, um, confident borrowers  get it in their head that they can exploit legal loopholes in the loan documents or that they can just wear us down in court. These borrowers are the ones who lose the most money to us (which is great for us, by the way!). Even though we are buying mortgages from failed lenders, the legal documents are pretty much all boilerplate with your personal data injected. They all have the same covenants, restrictions, and clauses and the legal system has upheld all of these documents when borrowers have attempted to exploit any weaknesses. Think about it: If all these documents pretty much say the same stuff the same way, what judge wants to make a ruling that says these documents are not legally binding? It would crush the lending system if a court ruled their documents were not legally enforceable. It ain’t happening, so don’t waste your time or your (our) money. For those who want to wear us down and sue/counter-sue us, feel free. We do this all day every day and I have never heard of anyone beating us in court except for blatant fraud or illegal transactions. We are a multi-billion dollar company with some of the best attorneys in the country. You are more than welcome to try to manipulate the US legal system to protect you, but I wouldn’t recommend it and I won’t feel sorry for you when you come back to me $200,000 poorer and in the same place you were before all that jazz.

    9. What Is Equity?     Unless you borrowed at 50% LTV in 2005 (and we both know you didn’t), your property is underwater. Get used to that idea and don’t try to throw appraisals from 2005 and BOVs from 2006 at me. Those are worth about as much as toilet paper. You have no equity in your property. Get over it, move on, and let’s free you up to find some deals where you CAN have some equity.

    10. We Can Be A Great Ally.     We have thousands of loans all over the country and we are looking to move ALL of them in one way or another. Work with us and you will have access to some good deals that we need to move. Someone could make a great deal of money by purchasing deals we are selling. So don’t burn bridges with us. If you want to be a long-term player in CRE, you will want to have a good relationship with us. I’ve sent several deals to former borrowers who I liked working with. That’s how this business works. I deal with people I like and trust. Earn my respect and my trust through a contentious relationship and I will go out of my way to help you in future deals. Good borrowers make my life easier and I want to return the favor.

    So, there they are. Those are my ten insights into the world of successor creditors. Has your experience been different? Do you have any insights to add?

    – Duke

  • Goal Setting: The Ideal Day

    flickr-user-wolfgang-staudt-3

    This may be unique to me, but I think an integral part of setting goals for yourself should include your time.

    That is, I think you should plan for what you want your ideal day to look like in addition to what you want to accomplish or who you want to be.

    Most of us focus on deals we want to do, money we want to make, or roles we want to acquire as our career progresses. But, how many of us plan for how we want to spend our time in an ideal work setting?

    Maybe the simplest way I could ask it is as follows: Suppose I were to give you $100 Million, no strings attached, and you realize that you still want to have a career. How would you spend your time in those work days?

    For this thought exercise, let’s assume that careers have more intrinsic value than the basic need to make money. People like you and I are accomplishment-oriented and, as the great JoePa noted, there is only one major life event after retirement. We don’t stop being achievers when we have a bunch of money. Think about it. Think of all the start-up and business success stories you have heard about the entrepreneur who struck it rich and made so much money that they never had to work again. How many of them actually never worked again?

    Maybe 5%? Maybe less?

    Most of us love the rush of working and accomplishing things. That basic desire may change slightly, but it doesn’t fade when we get rich. It is still there and even the one-hundred-millionaire will want to work toward some goal every day.

    So, for this exercise, let’s assume you have enough money to do whatever you want whenever you want to, but you still yearn for accomplishment and efficiency. How will you spend your day?

    Do you see why this is a crucial question to ask of yourself? If you only focus on deals, money, and titles, you will work yourself to death and ruin your health and your relationships. I think you need to build some time into every day working on your life plan, not just your business plan.

    Consequently, what are the things you would like to do every day to have an ideal life? If your life were “perfect”, what would you spend your time doing every day? I’m not trying to dig too deep philosophically, but if you don’t think about what the perfect version of your life would look like, then how do you know what to aim for?

    So, back on point, what would your perfect work day look like?

    Here are a few questions to consider . . .

    What types of things would you accomplish?

    What time would you wake up every morning?

    How many hours of sleep would you get?

    How would you spend the majority of your time?

    How much of the day would you spend in the office vs your home?

    How often would you be on the phone?

    How much time would you spend meeting with people?

    How much time would you spend with family?

    How would you fit in your exercise?

    What else would you like to spend your time doing?

    How many days per week would you work?

     

    All of these answers are unique to each person and no one can tell you what you “should” be doing. You have to figure that out for yourself and I can almost guarantee that these answers will change over time as your temples gray. But you MUST have a plan on how to spend your time.

    When the shadows creep in, all we have is a collection of moments in our life. The greatest regret of a dying man may be to look back at his life and realize he wasn’t intentional with the way he used his moments. Those are the times when you hear men talk about “wasting their life.” That’s just a way of saying they wasted the time they were given on this earth since they didn’t intentionally plan how to spend those moments.

    Don’t you be like that. Have a plan for your time and how you want to spend it. I bet that you will realize that there are changes you can make today in your current life stage to get you closer to that ideal day. You certainly don’t need $100 Million to make the first steps in that direction.

    Take a few baby steps today and every year for the next 5 years and I am betting that you will find yourself much closer to that ideal day than you ever imagined you could be. You may just find that the $100 Million is an irrelevant consideration and that control of your time is more valuable to you than a huge paycheck.

    Lest I be accused of being a philosopher, here is my practical application. My ideal work day and week is below. Take note of how much time I spend doing each of my activities and how I answered the above questions. That should tell you more about my priorities and lifestyle desires than any long-winded rant could. I put a few notes at the end of the schedule.

    And here it is (click to enlarge) . . .

    Notes –

    7.5 hours of sleep every night. Reading at least twice a day. Running everyday. Goal time at the beginning and end of every week. Answer emails ONLY 3 times per day. Plenty of practice on delegating tasks and organizing. Three networking lunches every week. Three afternoon lifts every week. Mentoring or coaching every single weekday. Two bible study/small group sessions every week. Date with the wifey every week. About 11 hours every week with the family in the evenings. 40 1/2 hour work week with most of my time spent on making deals, driving markets, and visiting properties.

     

    Seems like a fun week and, frankly, a very efficient one. Notice how my goals conform to this ideal schedule. I need to find a role in which I am a deal-maker by phone and in person. I need to develop my organizational and delegation skills. I need an office that is close to a gym and close to my home. I need outlets through which I can coach and mentor young men (or my children). I need to stick to my networking in order to know the right people to call and visit property with during my day. And on and on and on. I can glean crucial data points to aim for now that I have this written down and recorded. If this is how I want to spend my days, I can now figure out what skills I should acquire and what contacts I need to make in order to get there.

    Anyway, that’s what my ideal day and week look like. What does yours look like?

    Visit this site and download the printable hourly calendar (I downloaded it to Word for editing). Fill out what your ideal week would look like and then take notes on what you are spending your time doing. How does that align with your priorities? Can you implement any of these changes right now? As I said above, start working toward that goal little by little and you may find that you have an ideal schedule before you ever become a high-powered executive. You may even want to show this to your boss. If he or she is a good boss, they will understand what you are doing, why you are doing it, and they will help you move toward your goal.

    Use this tool and these ideas in any way you please. Let us know what you come up with in the comments and remember that your time is your most precious resource and if you don’t plan how you are using it you may look back and wonder what might have been.

    Happy planning.

    – Duke

    (Hat tip to StudentHandouts.com for the great, free resource)

  • The Millenial Manifesto: Motivation

    aj-brustein-2

    I’ve said it before and I’ll say it again: I don’t speak for everyone.

    I only know myself and my own issues. So any comments I make about my generation are simply an extrapolation of my own thoughts on my struggles, strengths, and style. So, please read my comments with a cautious eye.

    Today, let’s discuss motivation. Last time we discussed the Millenial Generation, we talked about loyalty and employers. To distill the message: If you can find out what motivates us, we will be just as loyal as any other generation. The $1 Trillion questions is: What motivates a Millenial?

    Allow me to shed some light . . .

    1. Meaning – I know it has been said a million times, but I am just as interested in “making a difference” as anyone else. Now, that phrase is certainly over-worked, but to me it means that I look back at my career and see that what I did improved the lives of others and improved the place I lived.

    Exploiting the arbitrage opportunities in the widget market in Southeast Asia’s developing economies can be extremely lucrative as a career, but that career would never allow me to go to sleep at night feeling like I truly accomplished something important or meaningful. I wouldn’t look back on that career with satisfaction knowing that I effectively traded the put options of textile conglomerates in Jakarta. Maybe that’s just me, but huge paychecks aren’t what I think will cause me to look back on a career with a sense of accomplishment.

    I have to make sure that what I am doing is a meaningful endeavor and not simply a job that pays well.

    2. Creativity – I need to have a certain level of creativity in my role. That isn’t to say that I need to be able to paint or write poetry. I just need an outlet in my day-to-day activities in which I am encouraged to think creatively, challenge the status quo, and invent new products or processes. That was probably the worst part of my job as an analyst.

    When I worked as an analyst, my basic role was as follows:

    Duke, here is a model. Here are some numbers. Put those numbers into that model. When you are finished, bring it to me and I will tell you how you input those numbers incorrectly.

    Does that sound like an environment that offers ample opportunity for creativity and inventiveness?

    There are certain time-honored traditions, battle-tested best practices, and hard-learned lessons that every member of my generation should try to adopt from previous generations. But every role should have an opportunity in which the employee can think creatively and dynamically about a problem that needs solving. All I really want is an environment in which I can approach a “boss” and say: What if we tried it this way? or Can I run an idea by you?

    If I am in an environment that fosters those types of discussions, then I will have all of the creativity that I need.

    3. Flexibility – If you measure my output, work-ethic, or effectiveness by the number of hours I sit at my desk, then you and I have a huge fundamental disagreement on what constitutes an effective employee. Life happens. People get sick, relatives pass away, friends get married, tires blow, lunches run long. If you micromanage the number of hours I sit at my desk, the vacation days I take, the phone calls I make, or any other way I spend my time, then I will try and find a way to leave your employment as soon as possible.

    Here’s why:

    You may think that you are paying me for my time. You’re not. In most CRE professions, we are paid for our output. Yes, attorneys and accountants are paid by the hour and need to log some hours, but for all of us who are deal-makers, we get paid by . . . making deals.

    Since I am not an accountant or attorney, my hours worked is irrelevant. My output is the only effective measurement against which I can be judged. If I can accomplish in 5 hours what others can accomplish in 10, why do you want me to work 10? Maybe your theory is that “the most successful people in our business are the ones who work the most.” If that theory is true, then I will choose “moderate” success in business and will have a collection of fun hobbies that I enjoy and a wonderful home life that I can experience to the fullest degree.

    This is a deep topic and we can discuss the ramifications of time management and our generation later, but the bottom line is: I want to feel like I am trusted with my time. If an employer tells me what hours I have to work, how many vacation days I can have, and how long my lunch meetings can be, they are essentially saying “We don’t trust you with your time, so you have to adhere to OUR time policy.”

    Why would I want to work for an employer who doesn’t trust me with my own time?

    4. Balance – I touched on it briefly in Flexibility, but a sense of balance in my life is extremely important. Every person defines “balance” differently, but I can tell you a little bit about what it means to me.

    I am not my job. We all ask someone “What do you do?” when we first meet them, but I never want to be defined by my occupation. If all I am to this world is a commercial real estate deal-maker, then I will have failed to live up to the expectations I have set for myself.

    One example that is unique to me is coaching. I coach travel baseball around Atlanta and I really find a sense of purpose and fulfillment through mentoring these young men via the game of baseball. That is a hobby of mine that I cherish and would not give up easily for any paycheck. Any job that asked my to give it up would have to be truly exceptional and I’m not sure that opportunity even exists.

    Another example is my wonderful wife. She is the most important thing on this planet to me and having dinner with her every evening is important to me. Occasions arise where I have to chose between my job and my wife. My wife will win every time. No matter what. Fire me if you don’t like it. I’ll be fine. If I can only be great at one thing in my life, then it had better be as a great husband. If you want me to chose work over her, then you and I are going to have issues.

    That is what I mean by balance. I have more than one passion in my life and I need to be able to pursue those passions without reproach or condescension from an employer.

    5. Autonomy – I’ll admit up front that this is a tough one. The proper level of autonomy and decision-making-power to assign to each employee is an extremely difficult target to hit. I have never felt like I had too much responsibility or autonomy. I always feel like I have had too little autonomy, but I understand how companies want to limit down-side risk by having decisions funnel up through senior management. I get that and it makes sense, but consider human psychology.

    Psychology 101 says every human everywhere wants to feel important. MMFI (Make Me Feel Important) is one of the oldest and truest leadership maxims in business. If you want loyalty, make people feel like they matter and are important to you. Make them feel like you trust them enough to make some decisions. For me, that means trusting me with a certain level of decision authority. If I feel like I have a reasonable level of autonomy to decide certain issues that arise, then I’m happy.

    I am not asking for the keys to the castle or to park in the CEO’s parking spot. I just want some freedom to make decisions. I want to feel trusted and respected enough to decide on issues that matter to my employer. I would pass on a higher salary position if I had to sacrifice autonomy. The company that makes me FEEL  powerful and important will have little trouble convincing me to stick around.

    6. Compensation – I want to feel like I am appreciated through my compensation. I DO NOT need to be the highest-paid guy around town. Let me say that again:  I DO NOT NEED TO BE THE HIGHEST-PAID GUY AROUND TOWN. But I do need to feel like I am treated fairly by my employer. The definition of “fairly” is totally subjective and dependent upon a number of conditions, but I will give you a numerical example.

    Let’s say I make $50,000 per year. Cool. Everything is hunky-dory.

    Now let’s say I find out that my friends who work in the exact same role make $70,000 per year. Not cool. My peers make 40% more than I do in almost the exact same position. All else being equal, I may start looking for employment opportunities at their company.

    On the other hand, if I found out that most of my peers made $55,000 per year or even $60,000 per year in the same role, I would be MUCH less tempted to look around. That extra $10,000 is important to me, but it isn’t THAT important to me. In fact, notice where this motivation falls on my little list. I found five other aspects of motivation that came to my mind BEFORE compensation. If 1 through 5 are checked off of my list, then this one becomes much less important.

    The bottom line to me is as follows:

    If I can pay my bills, take my wife to dinner once in while, buy a couple books for myself, and not feel like all of my peers are egregiously above my level of pay, then my compensation is  fine.

    I have plenty of time to make large paychecks and increase my income. For now, let me keep the lights on, take her to Buckhead Diner, have a copy of Man in Full, and not be the laughing stock of my peer network. Then you won’t hear complaints from me about my paycheck.

    7. Education & Networking – This one may be a little more specific to me, but the two best ways that I know to advance in a career are through learning and meeting people. I am a knowledge-junkie and a network-aholic. I am always learning. I can never meet enough interesting people. I would love for an employer to pay my memberships dues to networking organizations and to reimburse me for my CCIM or CRE continuing eduction classes. I’m going to pay them either way because I love learning and meeting people.

    It would certainly build some loyalty if an employer said “Duke, we think you’re important enough that we want to pay for your eduction and networking”. In that scenario, don’t you think I would want to say nice things about that employer at my networking meetings? (Hint: I would!)

     

    So there you have it. There are 7 main factors that motivate me in my business life. Other members of the Millenial Generation may feel differently, but I would guess that some of the above points are universal.

    Reviewing the above list, it strikes me that there are really just two common themes: trust and respect. Let me abbreviate the list according to those two themes:

    1. I RESPECT myself for my chosen profession. 2. My employer TRUSTS me enough to allow me some creativity in my role. 3. My employer TRUSTS my ability to manage my own time. 4. My employer RESPECTS my personal life enough to allow me to attain balance. 5. My employer TRUSTS me enough to allow me to make decisions. 6. My employer RESPECTS me enough to compensate me fairly. 7. My employer RESPECTS me enough to pay for the things that help me advance in my career.

    I can break down these two aspects on a deeper level in later articles. For now, consider your own motivation in the workplace. Do you have any to add to my list? Any of mine that are unfair or unreasonable? Leave a comment below and let me know what you think.

    – Duke

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