My first real job was as a licensed broker at a real estate firm that sold both residential and commercial property.
The training in that job consisted solely of my boss saying “the cap rate is 10”. Armed with this industry insider information, I confidently approached a very successful local residential builder with a proposal to sell him a building in our little midwestern town.
Since I was a worldly 21 years of age and seemingly on my way to stardom in real estate, the builder agreed to meet the next day. His one condition: “Bring me a plan on paper that proves this makes economic sense for my business”. Suddenly, I was faced with reality.
I didn’t know anything about his business, let alone what market rent, vacancy, and expenses would be appropriate for a combination retail/office/grain elevator property. And that assumed the cap rate wasn’t a joke!
Prior to the meeting, I had no time for preparation and did not complete a market based inquiry. The meeting was very brief for obvious reasons. I still think about it.
So whether you’re a beginner or an experienced assessment professional, know that blissful bravado is fleeting and is the route to failure. It may get you in the door, but you will soon regret taking everyone’s time. I relate this story now because it still has relevance today.
Do not go in unprepared. Do your homework. If you need more time, ask for it. You may not be able to get the all the time or the relevant information you’re seeking, but at least you will have given your best effort.