I’m in my home territory, Dallas, Texas with the Real Estate Profit Coach gang. We’re here for Jayme Kahla’s Commercial Inner Circle meeting with our students. The first day is a hot seat day with our 7 of our commercial inner circle members, along with Bob Leonetti, Scott Carson, Jason Schubert and I. This was our first face to face meeting together. We meet as a group twice monthly via teleconference to review commercial deals. Our plan is to spend a few days together twice a year working intensively on our deals. There are brand new investors, and very experienced investors in our inner circle. Regardless their level, all benefit from the advice and experience of everyone in the room. It’s really a great thing!

When I say our deals, I mean exactly this. We will be buying commercial property together as a group, and will share in the proceeds. We’ve been reviewing deals all along, and with our first face to face, it was time to define the rules. It’s important to make sure everyone has the same play book. We established:

• All deals presented to the group were for the entire group, not just to validate an individuals deal.

• The decision to move forward on a deal would be through a majority rule vote (yes, my Roberts Rules of Orders training is coming in handy).

• The individual that brought the deal to the group had first right of refusal moving forward if the group voted against pursuing the deal.

Our buying criteria was as follows:

• Multi-family or income producing propety
• Greater metropolitan areas
• Ability to deal with owner directly
• Must meet cap rate expectations for area (defined per market)
• Defined and credible exit strategy

Our goal for the three days was to find a deal. How would we accomplish this? Through leverage:

Scott’s activities:

• Posted Various Craigslist ads
• Contacted to local hard money lenders through REI clubs in Texas
• Contacted commercial brokers through ActiveRain

Jason’s activities:

• Posted Craigslist “I Need To Buy An Apartment”
• Contacted Property Managers through Google

Lorena’s activities:

• Sent out MeetUp email blasts to multiple local area groups
• Contacted commercial listing agents for any pocket listings
• Reviewed MLS properties

You will be amazed how quickly you can reach hundreds of investors through these techniques, and our response is great! Our ads are available online.

All of this activity in a one day period generated 16 properties to review. Jayme had a Florida boutique hotel in South Beach that looked great at first blush. She also knew the owner of a Dallas M streets apartment building for sale that cash flows!

We needed to evaluate the deals to determine which ones were credible and deserved further due diligence. Since most of the deals were apartments, we created a spreadsheet to log the important factors to allow for a quick review. The factors we included in the spreadsheet are:

• Gross potential income
• Vacancy
• Gross operating income
• Total operating expenses
• Net operating income
• Cap rate

These factors allowed us to level the playing field and look at a property solely based on its financial merits. No emotions involved. The point person, or the individual that brought the deal, could give us orally the highlights, and allowed the group to review 16 properties in 2 1/2 hours. If a deal looked marginal from the first blush analysis, the point person could elaborate the properties points, i.e. favorable financing, etc.

All this work generated a group decision of moving forward immediately on two properties, and further due diligence needed on five others. We delegated tasks and by the end of day three we had submitted a Letter of Intent on two of the properties.

Now, these are pretty good results for a few days work, right? It’s amazing what a little hard work and focus will do. Question is, why aren’t you doing this in your market?