By Darryl McCullough
Senior Partner
COUNSELING SINCE 1972
4 MIN READ
This paper is educational material drawn from real transactions. It is not an offer of securities, and it is not tax or legal advice for your situation.
We Are All Different
Before any transaction, an honest self-assessment: what kind of investor are you right now, what is your situation, and what do you actually need?
Every corporation and every individual is different. We categorize ourselves against a selection of norms: risk tolerance, age and life cycle, expansion or divestiture plans, long-term objectives.
Then things change.
Below is an ongoing thought process that allows further internal research, analysis, and ultimate focus before applying creative fundamentals and formulas to your real estate transactions, over both short and long horizons.
What type of investor are we at this time in the cycle?
- Institutional investor
- Institutional lender
- Passive investor
- Private lender
- Value-add investor
- Property user
- Builder or developer
- Speculator
What is our current or long-term situation?
- Need cash
- Need income
- Want out of management
- Want out of negative cash flow
- Mortgage coming due
- Geographical change
- Entity dissolution
- Too many properties
- New opportunity
- Partners disagree
- Health
What is our current or long-term objective?
- Corporate expansion
- Retire passive
- Spend talent
- Recognize value
- Consolidate
- Corporate disposition
- Acquire more assets
- Reduce inventory
- Convert to paper
- Change benefits
What are our current or long-term wants and needs?
Cash. Industrial. Mortgages and notes. Homes. Businesses. Cottages. Mini-storage. Multifamily. Campgrounds. Condominiums. Building lots. Offices. Warehouses. Development land. Retail commercial. Resorts. Hotels. Motels. Mobile home parks. RV parks. Timeshare memberships. Agricultural property.
What will we do to complete a transaction?
- Add cash
- Add or create paper
- Add property
- Exchange a portion
- Take a problem
- Partner with others
- Manage
- Move loans to a new property
- Lease back or guarantee income
- Discount or buy-back option
- Options
Honest answers to these questions are the beginning of every successful transaction we have been part of.