In the past month one of my clients took a turn that I never expected. They want to renovate their REO and sell it later. They want me to be the GC and the manager.
On the other side of the business, our receivership practice is booming. We have more than 10 projects going right now, most including commercial real estate. Projects are all over the state.
This is all creating a situation where our small business needs to look at where we are going and start turning away projects that do not fit the core.
First things first. We are not going to turn into a construction company. I do not have the time to run a construction company, I can't make enough money doing it and most of all, I can't buy into the plan of renovating crackhouses (a little), stuffing some tenant in there and beating on them to pay the rent every month. Long story, but I'm not going to do it.
Next thing is that I am not going to be the field guy anymore. Yes, I will go out to the property and do the initial in-processing, but I have very qualified people working for me. They do this and like doing it. They work with buyers too and I don't. I like the field too, but theses guys expect me to bring in the business and keep them fed. I have been hearing more and more that they want me to do more work that makes them money, ie. go book deals.
After this, I am going to hire a selling manager for the brokerage who is going to earn an override on all of the transactions and manage the agents.
Next, I am going to rotate out of property management. Someone is going to get hired to do this and I am going to share the deal with them. No salary. Make part of the income. They'll make more that way and I wont be hung on a salary.
Lastly, I am going to work on our business, Gryphon Asset Management. This is the company that handles all of the state court appointee assignments and the business line that create opportunity for all of the other entities, Auction, Brokerage and Property Management. We already have one client that has us as an all encompassing advisor and my goal for 2008 is to get one to two more local lenders to bring us on in this capacity.
As all of this goes on, a tier two goal will be recruiting. I need good people throughout the state and don't want to keep outsourcing. This is not a true priority that I am going to force however. Over the years, I have begun to believe in passive recruiting. The best people, the ones that have staying power, show up and are not chased.
This approach may shoot me in the foot with working for other asset managers, but I am not doing that anyway. We are not chasing the Countrywide banana nor are we making a killing on BPO's from REO Trans.
So there is it. My business plan for 2008 growth.
Making these decisions really takes a lot off my shoulders. Our business provides a Single Source For All Asset Management Solutions, that doesn't mean that I micro manage all of the projects.
Do you have questions about distressed assets, receivership or bankruptcy sales, auctions? Email me at rfk@gryphonusa.com and I'll try to answer it in an upcoming post.
Richard F. Kruse is the President of Columbus, Ohio based Gryphon USA, Ltd. (www.gryphonusa.com). The Gryphon Organization includes Gryphon Asset Management providing receivership and consulting services in the distressed marketplace, United Country Gryphon Realty & Auction Group (www.ucohiorealty.com & www.ucohioauctions.com) providing real estate brokerage and auction services throughout Ohio and OnlineAuctionUSA.com (www.onlineauctionusa.com) providing commercial asset liquidations from the Midwest to East Coast.
United Country Gryphon Realty & Auction Career Opportunities Available. Call 614-885-0020 x 17
Rich - Hire a "Ginger" a la Richard Davis' Tradewinds Properties * Real Estate Pros tv show. Pay her well (lease her a nice car) and get her going from the JUMP on your operation....let her SEGEWAY into whichever role she wants - PM, Sales brokerage, and then YOU and HER hire the other job description.
Get involved with IREM if you are not already involved and pay fees for your PM to get CPM. I have actually done ALL of the jobs you describe and while I do enjoy the rennovation organization work, I love the PM work more....luckily my husband likes the construction coordination and he is GOOD at it.
RK,
we`re slowly leaving the property management side of our business as well.
The time involved takes away from other valuable projects we`re dealing with.
we`re tripled our commercial business which were very happy about.
WG - A Ginger would be a good thing, but leasing a car? Thanks for the idea about IREM
SD - Getting into commercial is a great move. Congrats.
Well I'm not a cute as Ginger but I'll take anything German with 4 doors!
And man do I wish I would have read this before sending you that email about CW today. LOL!
It sounds like you've got a very clear plan - now get to work! No, really ... It's a lot easier to focus and to get your people focused if the company has a plan and sticks to it. Good luck this year!
And if you ever feel like opening branches in other states, give me a call for CA!
- James
Wayne - I have a 2000 C Class I will rent you.
James - We had what I thought was a plan, but it was a little clouded with always saying yes. It is a lot more clear now that we have started saying no.
EJD - Our receivership side keeps the new opportunities coming. There are 2 companies in my area doing this work, including me, as opposed to 7000 real estate agents.