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- Just because rents have gone up 5% per year for the last 5 years doesn’t mean they can’t go down 25% in one year.
- Lease first, then build.
- Control your inventory.
- The easiest sale is to another salesman.
- Have an ongoing asset disposition program in good markets. Sell something…. Not every asset or building can be a core holding.
- Sell when the market is good because when the market is bad, there are NO buyers… at any price.
- Holding off on selling based on last year’s prices or what your pro-forma said is stupid.
- Do not follow the market down…. Lead the market. Make cuts quickly.
- Work renewals hard and early.
- Beware of tenants with good stories…. Be skeptical.
- Don’t let what your competition is doing influence your decisions. Do what you think is right based on the facts. You can’t erect a fence to keep the competition out.
- It’s better to start a building two months late and miss a deal than to start it two months early and face a shrinking market.
- Secondary locations can sit empty no matter how low rates go.
- No credit, no deal.
- New projects must be based on current rooftops and existing infrastructure, not future population growth.
- Do not inventory land at retail prices for future projects. A 20% increase in land price is only a 2-3% increase in total project cost.
- Do fewer deals and do them better. You can be more profitable by having more time to focus on the few and you get the added benefit of keeping overhead low.
- Too many deals dilute time and attention away from the good ones.
- It takes 5 good deals to make up for one bad deal.
- When a bad deal surfaces, 90% of management’s time is siphoned off from the rest of the business to deal with the problems of the bad deal. The result: The bad one is still bad and the good ones are now mediocre or troubled as a result of a lack of attention. 90% of management’s time should be spent on nurturing the good ones. Easy to say, hard to do.
- The first markdown in price is the smallest. The mistake is to hold off on selling at today’s prices in the belief the market will come back.
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By Keith J. Cunningham www.keystothevault.com
PPS Keith is returning to Sydney for a his 4 day MBA program contact me for more info
This entry was posted on Tuesday, June 23rd, 2009 at 9:03 pm and is filed under Property Investing. You can follow any responses to this entry through the RSS 2.0 feed.
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