Yesterday’s presentation from Bob McComb on getting your start in commercial real estate had plenty of great ideas, but one that stuck out to me this morning was about commercial leases.
Bob noted that a major barrier to entry to commercial dealmaking is the dreaded lease form. The legalese on a boilerplate form can make your eyes cross, and customizations from companies or owners or tenant reps only make it harder to display the expertise that you need to in order to give your client the feeling of certainty that they will get what they want by working with you.
The one thing not to do with a lease is avoid reading it. When you have a prospect on the phone, you need to know what’s in the lease – because the quickest way to pour cold water on a deal is to shut down conversation because you don’t know what’s in the lease agreement. If a broker tells someone “I don’t know what’s in the lease, so I sent it to the lawyer,” that’s a great way to not get called back.
So leases are necessary to understand, and it will make you money to understand them well enough to discuss them on your own. But they’re a mile long, they’re intimidating, and you need a magnifying glass to get through one. How can you meet the challenge?
Break it into pieces.
Bob’s solution: “Get a lease form. Don’t read it all at once. Start with the first paragraph. Read it as many times as it takes for you to understand it. Pick time on the train, or at home. Once you understand it, move on to the next paragraph the next day. Do this every day with a new paragraph, make it part of your self-education program. It will take you months, but when you’re done, you will know what’s in that form, and you can have the conversations you need to have without shutting down the discussion. It will get you to the point where you never have to say ‘I don’t know, but I can get back to you on that.’”
If an idea breaks down intimidation, increases understanding, and makes you money — that’s simply one great idea.
- How To Get Started In Commercial Real Estate: Bob McComb At NAR 2011 (commercialsource.com)
- Bed Bugs And The Law: IREM’s Chuck Achilles at NAR 2011 (commercialsource.com)
- NAR 2011 Commercial Programming Preview: Preparing To Lease Buildings And Represent Tenants (commercialsource.com)