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With the 10-year yield once again quiet, let’s get right into this week’s commentary.

When Good Enough May Cost You Time, Money and Clients

I took the following from the Kepner Tregoe website on Problem Solving:

Addressing risk: Humans have learned to identify trends and developed an awareness of cause-and-effect relationships in their environment. These skills not only enable us to fix things when they break but also anticipate what may happen in the future (based on past-experience and current events). Problem-solving can be applied to the anticipated future events and used to enable action in the present to influence the likelihood of the event occurring and/or alter the impact if the event does occur.

Through the years, I have covered a lot of subjects.  All of it surrounds being very good at what you do and protecting the interests of clients and partners.   With that stated, I want to bring up a personal experience; and then I will circle back to what this means for all of us in business.

I am an efficiency guy.  And, that means I am always looking for ways to do something easier, quicker, better, etc.  Soon, I am planning on taking a couple of business trips; and I decided I do not wish to take my main laptop system that I use to run my business.  Now this is not anything too crazy when it comes to efficiencies.

However, I did a little research; and I decided to run down to my local computer store.  I had this bright idea that I just wanted to get a small laptop computer that allowed me to work remotely.  It certainly would not be as powerful as my main system, but it would allow me to not fall behind when away from the local area.  Still simple, right?

Okay, I buy a very basic system that has with it a one-year subscription to Office 365 (since I use the Microsoft suite of products a lot).  This is not ideal as Microsoft wants you to continue to pay them annually.  However, that was livable to me.  I bust open the laptop to get it ready; and I do not see the Office product anywhere.  Now I go online to determine how to find it.  Note, from a customer service perspective, it would seem smart to include instructions.  However, that is just my way of doing business apparently.  Anyway, I figure out how to find it and install it.  I work through it and then it shows I only have 6 months left on the one-year subscription (not good).  I call down to the store and tell them about the issue.  They stated that they needed me to come back down and get a new laptop (one that comes with a full year of Office 365).  And, now I am wondering why they did not check the machine first (again, I am wondering who is running this place).

I head back down and start working with the tech guy (who is very nice).  He wants to take a look at a lot of things to make sure I know what I am doing.  He eventually finds that I have some inactive subscriptions for Office that I am not using.  He asks me if I would prefer that over the subscription.  I told him that would be ideal for my needs.

He then says he is not sure which of the subscriptions were being used by my existing laptop, but he will just guess.  That is when I told him to hold on.  I asked him what would happen if he guessed wrong (50/50 chance here).  He said it was no big deal if he was wrong.  My own analytical skills were kicking in now.  I then asked him if he guessed wrong, then wouldn’t my existing system be unable to use the Office suite.  He kind of went “oh yeah.”

My apologies for the length of this story.  However, I wanted to make some points.  Here is a techie (who should have strong analytical skills) that unwittingly was needlessly going to risk my ability to run my business.  And, that is what many in business do all the time.

Many professionals only know their own business; and they do not think down the road to the effects that their decisions make on others.  The costs can be great with clients and business partners losing a lot of time and money.  AND, the sad thing is these professionals really never understand that impact.

Taking this back to commercial mortgage brokering, I know that many of my colleagues under appreciate the benefits of having someone anticipate problems before they occur.  For example, a Commercial Broker stated he just wants to get the deal to close.  Having just gone through my own fiasco with the new laptop, I challenged him on his desire to just get the deal to close.

I asked him what he loses if his client is unhappy with the overall experience.  What is the cost of this client not coming back for future business?  What is the cost of losing referrals?  What is the cost of everyone wasting time?  You get my point, hopefully.

He then seemingly got my point.  Now he may have just given in to my will.  But, I am hopeful that a light bulb went on for him.   There are costs involved when someone is just good enough.  It may not be immediately apparent.  Yet, it becomes obvious when you find people to work with that address risk and are constantly looking for the “gotchas” along the way.

Final note here is I did eventually get my new laptop square away.  It only took about 6 hours at the local store.  Happy ending? I will let you figure that one out!

Investments Opportunities for Purchase with Strong Cash Flow:

Back on the January 15th update, I wrote about “Creating Residential Listings Using Commercial Opportunities.”  Each week,  I am presenting some of those investment opportunities to better educate all on what is actually available.  Note that these are all Single Tenant Net Leased properties that have listed in about the last 10 days.  In addition, I assumed a 5.25% loan with 50% down.  This is just a small sample of what is actually available.

If you assume investors in the Bay Area are getting a cash flow of 3.5%, then you can see the potential improvement with these properties above.  This approach is great for the investors desiring increased cash flow, an opportunity to get out of daily property management, and/or taking the challenges of rent control off the table.  Should you wish to discuss any of these or others, then give me a call.

That’s it for this week.  As always, feel free to give me a call with any of your strategic financing needs.

Articles of Interest:

NREI reported “Mega-Deals Give Cross-Border Investment Volume a Boost in First Half of 2018.”

The SJ Mercury News shared “Silicon Valley powers Bay Area job surge during July.”

The SJ Mercury News also reported “Train station deal signals continued boom for downtown Mountain View.”


See the table below for approximate interest rates.

Type Rate Fixed Term
Apartments 4.345% – 4.970% 3 to 10 year (30 yr amortization)
Commercial 4.665% – 5.270% 3 to 10 year (25 yr amortization)
SBA Lending Call for Options Call for Options
SV Commercial Lending