As regular readers know, I do two kinds of deals:
- Deals with investors, where I am generally given discretion to make all decisions relating to buying, renovating, and managing the property in question; and
- Deals I broker, where I am simply an expert intermediary (hopefully) helping my client to deploy capital into the multifamily space.
Of the two, brokering deals is considerably harder, because I am not the decider.
During the course of a deal, there are a huge number of tactical decisions that need to get made, from what to put in the offer, to how to handle counter-offers, to scheduling inspections, to handling discrepancies that arise in the documentation provided by the seller, to negotiating credits, through to closing.
When I am doing a deal for myself (and my investors), I make these decisions very quickly. With rare exceptions, I know how I’m going to handle any situation approximately 10 seconds after it arises. I’m not claiming that I always get everything right. But there’s little-to-no-friction on my side of the deal, because I basically know what I’m doing.
When I broker a deal, it’s a different story. On those deals, the decision-maker isn’t me; it’s the people risking their hard-earned money on an investment. They generally trust me, but they need to be kept informed throughout the process and convinced that the way I propose to go forward is, in fact, the best way to go forward. Then, once I convince them, I need to set about convincing the seller. Not easy!