Only Women Are Beautiful, What Are the Numbers?
During my thirty-year tenure as a realtor I had the privilege of meeting numerous real estate investors that I serviced as customers and sometimes was lucky enough to befriend. Quality men and women I was glad to know, regardless of our business dealings.
But there was none that I admired more than Mark Kornwasser. A survivor of the Nazi death camps, Mr. Kornwasser came to the US after the World War with little more than the clothes on his back. Yet after years of hard work and sheer will he virtually created a real estate empire.
In fact, that's how I met him. In 1976 I made a cold call asking whether he might have an interest in selling a shopping center he owned near my house in Fountain Valley, California. As it turned out, he wasn't interested in selling, but after several face-to-face conversations in his Hollywood office he opened the door for me to present real estate investment opportunities to him.
So on one particular day I drove him out to see a large newer shopping mall in Mission Viejo that had just come on the market. And like any realtor with little real estate investing experience (I was still pretty green then) my first comment to him as we drove around the mission-style store fronts and palm trees galore was, "It's beautiful isn't it Mr. Kornwasser?"
Without a seconds' hesitation he responded and forever changed my perception about real estate investment property. "Only women are beautiful, Jim, what are the numbers?"
The cold hard fact about investment real estate is that it's a business. Unlike residential properties where buyers would naturally be swayed by curb appeal and style, rental income property is about the numbers. The investor wants to know the cash flow, rates of return and profitability.
This is extremely important to understand if you plan to sell income property. You must prepare to present a real estate analysis that crunches the numbers. Gross rental income, operating expenses, annual cash flow, capitalization rate, cash-on-cash rate of return and other financial data the real estate investor can use to make a prudent investment decision.
There's no other way to successfully sell investment property, folks. It's all about the numbers. So you can take my advice and start preparing now, or hear it from your customer later.
Here's to your success.