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Why Commercial Real Estate Deals Die Before Closing w/ Richard Crouch · Real Estate Investing with RealDealCrew

• 0:00
  Your commercial deal probably won't die on the numbers.
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  It'll die because nobody ordered the survey.
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  or the operating agreement never said what happens when the leaseup runs late.
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  Richard Crouch has spent twenty-five years closing commercial real estate deals
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  at Woods Rogers.
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  In this episode, you'll learn how time kills deals and how to keep yours moving.
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  The operating agreement clause syndicators skip until they end up in court.
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  and the PSA language that stops your due diligence clock from starting before
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  the seller hands over their documentation.
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  If that's useful, subscribe and if you want systems and operations like this,
• 0:40
  head over to realdealcrew.com.
• 0:43
  Let's get started.
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  Richard Crouch joins me here today and you can learn what his team can help
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  you with by going to WoodsRogers dot com.
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  That's gonna be a clickable link in the show notes.
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  I really appreciate your time here today.
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  Thank you so much for having me.
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  Well, I I'm we're we're gonna touch on quite a few things here today,
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  but you've spent two decades on the legal side of commercial real estate deals.
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  What pulled you towards CRE specifically instead of j general corporate law?
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  So I as I was going through undergrad and and finding my way
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  and consulting with Career Services,
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  there was a lot about law that attracted me in terms of being creative,
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  finding solutions. I didn't necessarily picture myself being a litigator,
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  but I always had an interest in business generally and that was that was also
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  my my degree in undergrad as well.
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  and my first two mentors that I was brought on to work for were fantastic resources
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  to me and
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  That was in the early two thousands and so real estate,
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  particularly syndications, were just going gangbusters and that's that's where
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  the the need was for me and that's been what I've been primarily focused
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  on ever since.
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  So you you're known to finding practical solutions rather than just flagging what
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  could go wrong on a deal? Where did that philosophy come from?
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  I think from one of my mentors in particular,
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  I had one mentor who was very good about the technical skills,
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  your standard review, and then I had my other mentor was very entrepreneurial,
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  very business-minded, basically taught me everything else.
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  that they don't teach you in in law school and was very good about making sure that
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  you could manage clients, you know,
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  retain, attract clients, and help clients basically solve their problems
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  and realize that sometimes the solution to whatever the issue was
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  was not gonna necessarily fit within a nice little box.
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  And through through years of experience and also seeing where parties have made
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  mistakes and had issues of contention
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  definitely became a nice perspective in terms of seeing how parties could solve
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  problems and work towards common ground.
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  And so every day I use things that that one mentor taught me
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  and we'll we'll certainly always be appreciative of that.
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  How important was mentorship to you in your career,
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  especially early on?
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  Incredibly critical. there's there's a there's a lot where at a young
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  age where you're eager to please,
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  you don't necessarily know what you don't know.
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  And having a mentor, they just have the perspective of years of experience.
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  they've learned a lot in those years and they've made mistakes in those years.
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  And hopefully having that perspective can really make your your
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  own learning curve less steep and hopefully help you circumvent other potential
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  issues as well. But I still, even though I've been practicing 25 years
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  and and this one mentor in particular.
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  he can still take me to school on certain things and I still value his perspective.
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  So I don't think we ever stop learning,
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  but he definitely has an opinion and a perspective that that I always value.
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  And yeah, my other mentor would say things like,
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  I need somebody smarter than me to look at this.
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  And we sort of jokingly say that to one another.
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  'Cause there's just a lot of mutual respect and and realizing that you're never
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  you're never finished learning and having having another perspective can be very
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  I I noticed that you work f with everyone from first time commercial investors
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  to sophisticated investors that might have a very large portfolio.
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  Can you take a step back and kind of identify what the may be the biggest
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  gap you see between those two groups approach to the same deal?
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  Yes. one of the biggest differences in perspective is not being familiar with
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  the general process, particularly on an acquisition.
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  a lot of people, particularly when they're when they're getting started,
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  their only perspective may have been a fairly simple residential closing that they
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  were involved in, maybe possibly for their own house.
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  And as you get into more sophisticated transactions and more s complex forms
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  of financing, the deals become very complex.
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  There end up being a lot of deliverables,
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  a lot of requirements, underwriting and legal requirements of the lender that
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  a lot of parties are not used to navigating.
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  And so I think sometimes there might be a bit of not necessarily just sticker shock,
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  but just being overwhelmed by how many moving pieces there are,
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  what the various parts of the processes are and why they're there.
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  And that is something that obviously through experience it it becomes more
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  of a joy to represent some of the more experienced acquisition firms because they're
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  used to seeing a lot of these requirements.
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  There is definitely a lot less hand holding.
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  but honestly everybody has to start somewhere.
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  And so doing a lot of the hand holding is a necessary part of the process
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  and it's one of those ways that you become an invaluable business advisor
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  and legal advisor to them and in a way together your team improves because
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  you have very common goals.
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  so that's I think probably just the experience in terms of how
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  to navigate issues and also when issues come up.
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  For example, if you have a tenant issue or maybe a roof that needs to be replaced,
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  how the parties deal with that issue,
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  what sort of escrow arrangements they set up,
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  and basically how you solve problems and come together on problems without
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  it necessarily having to be winner takes all.
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  You know, with with the experience you've had,
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  especially over the last twenty five years,
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  there's a number of different asset classes right here in in the commercial area.
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  Do you find that there are any that investors kind
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  of underestimate or the legal complexity associated with any of these?
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  I think one area that still has managed to have strength through all
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  of this is self-storage and I think a lot of that and also industrial as well.
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  And I think part of that is there's not necessarily as much tenant build
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  out involved with that. So a lot of those tenant complexities
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  you don't necessarily have. so those asset classes have have done better more
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  recently.
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  I know there's some valuation issues with multifamily right now and both retail
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  and office. largely depends on the market.
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  a lot of people would say that they're they're struggling,
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  particularly office.
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  Now, but throughout my career,
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  I've I've seen all of those in a strong position at some point.
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  and it's it largely started with retail.
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  office was pretty strong throughout my career until obviously COVID.
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  multifamily was very strong after the global financial crisis
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  and maintained that strength for quite a good while.
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  And then basically after COVID,
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  industrial really became a darling.
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  In that particular space. So I've I've definitely seen all of them
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  go through their various cycles.
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  but it seems like self-storage and industrial have perhaps been
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  the most consistent of all of them throughout the two dozen years.
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  Yeah, we we've heard a number of times that time just kills deals.
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  and you know, I I have to I have I don't want to put you on the spot,
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  but sometimes that seems things seem to be slow is on the legal side of things.
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  You know, you you you could could you kind of give me an example
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  of maybe a transaction that that nearly died because it moved too slowly
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  and what actually saved it?
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  Yeah, yeah, I certainly can and and that was probably one of the first mindsets that
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  the one mentor I was mention mentioning imparted to me is he basically said,
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  N never assume that you're the smartest person in the room or that you're
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  the biggest gift on the transaction and he did say that there is
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  an ongoing struggle in terms of how people view
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  Attorneys and oftentimes they're viewed as the impediment department.
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  And I've told my own team, and now that I'm trying to train younger attorneys
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  in the transactional process, I've told them don't take your cues from
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  a timing perspective from other attorneys on the deal.
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  Because it's not uncommon that they might get a purchase contract opposing counsel
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  may, and you might have a couple weeks before you hear anything.
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  And I've generally told my team
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  longer this goes on, the more deal fatigue you get,
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  the more confidence is eroded that the deal is going to act actually happen,
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  the more agitated and paranoid the parties become as to whether there will ever
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  be a closing. So if you get something,
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  if you get a contract or a lease,
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  most clients are really expecting you to get something back to them within
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  one to two business days, and you need to always be striving
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  to acknowledge that commercial reality.
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  And so yeah it's it's intet incr incredibly critical.
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  That's something that has not changed throughout my career.
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  And there are times where sometimes if the responsibility for
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  a certain deliverable was not allocated properly between,
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  say, the attorney and the purchaser,
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  for example, like maybe it's a third party report.
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  and then eventually it comes to light that nobody ordered it,
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  somebody has to order it, you get it three days before you're supposed to close.
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  There might be something like an encroachment on a survey that you're gonna have
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  to deal with. Either get an encroachment agreement,
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  resolve that issue somehow, you're gonna run into timing issues,
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  and you might run into something where your lender is gonna require you to do X,
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  and if you can't get it accomplished within that time frame,
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  because
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  either there was poor communication or procrastination,
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  the underwriting committee might miss its deadline and you might have
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  to push back closing 30 days and again the credibility and
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  the transaction getting done and the patience of the other side
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  is gonna be challenged. and you may run situations where your seller starts
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  to list the property again because they don't think the deal's gonna happen.
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  Hmm. Yeah, I understand that Woods Rogers is has touched deals nationwide
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  at this point. is there any areas of the country that is kind of your sweet spot
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  or is it or have you found that what what has been the most difficult
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  to scale to that level?
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  I would say primarily through the southeast is where a lot of our clients tend
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  to focus. we tend to be, we actually physically are located
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  in the mid-Atlantic region, but a lot of the areas of growth for other clients tend
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  to be in cities that have a fairly young high-tech.
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  Oftentimes they're a college town,
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  so they have a lot of educated young professionals constantly moving into
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  the workforce. oftentimes they might be a capital city for a certain state,
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  so there might be a lot of legislative government jobs as well.
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  And those tend to be strong areas for growth.
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  So like Nashville, Raleigh, Atlanta,
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  are some common examples where the markets always have some good fundamentals
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  to them. And
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  You know, it it seems like in the last ten years or so that that particular market
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  geographically has grown even more,
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  particularly in areas like Nashville.
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  Would you mind spending a little time do you help syndicators
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  or getting things going regarding that and what does that typically look t like,
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  especially for people who want to try to do that for the first time?
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  Yeah, there are a number of things that people oftentimes don't think about.
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  I mean I I had mentioned a lot of the moving pieces in an acquisition,
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  getting very used to that, ordering third party reports.
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  and oftentimes when we have a new client who's getting is fairly new to that space,
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  we'll even provide a acquisition flowchart to them so they can see
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  all the moving pieces at one time.
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  but
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  One thing that I I see time and time again.
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  That parties tend not to think through as as syndicators
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  is properly memorializing the deal.
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  oftentimes they're so excited about the deal,
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  you know, in their minds the deal like can't possibly lose,
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  you know, they'll have no problem with cash flow and and meeting returns.
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  And there can be certain variables that they just don't thoroughly think through.
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  or there might be some assumptions that they have,
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  With their forecasts that are a little bit too optimistic and don't factor
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  in things like interest rates that in or increase incredibly quickly in
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  a very short period of time, which we're seeing a lot of that right now.
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  And oftentimes their operating agreements were something maybe they took
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  off the shelf or they had somebody who wasn't really qualified.
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  as a transactional attorney to prepare it for them.
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  And there might be certain things in there where if you have
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  a asset that underperforms and you have a situation where either you didn't lease
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  it up in the time that you thought you were going to,
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  you you had other assumptions like you thought it was gonna basically take twelve
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  months to lease it up, and ended up taking eighteen months,
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  and you're not able to
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  Refinance right away and meet returns,
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  issues like that. you need to have mechanisms in your operating agreement that
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  addresses what happens in situations like that.
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  so a lot of people you need to have basically aspects of governance,
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  corporate governance answered in terms of who makes what decisions.
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  if you have a scenario where you need additional capital to keep an asset viable,
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  You need to have mechanisms for how you approach the investors for that.
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  What happens if some investors contribute and others do not?
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  How do their interests get diluted?
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  If a sponsor doesn't meet returns for a number of fiscal quarters,
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  and they don't submit a business plan for how they're going to improve things,
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  do you then have grounds to remove them?
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  And that's one of those things we actually rarely see or or something that gave
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  a a clear example of the metrics of performance for a sponsor.
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  And sometimes you run into situations where investors either because they haven't
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  gotten a return or things haven't played out as well as they thought that they
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  would, might be a little disgruntled but don't necessarily have
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  the grounds to remove the sponsor.
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  And things basically deteriorate to litigation.
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  And you really need to have some clear objective criteria for your sponsor,
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  and that protects the sponsor as well.
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  because if they satisfy that criteria,
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  they can keep a certain level of stability in the project.
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  but if not, there's a lot of unanswered questions and and litigation
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  is a very expensive way to resolve any of those issues.
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  But there should also be some mechanisms in the operating agreements as well that
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  do have some very clearly contemplated exit strategies.
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  because oftentimes there will be a clear plan where basically after
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  X number of years, we either plan to sell or refinance,
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  we end up having plan on having some capital event where investors
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  are gonna get completely caught up.
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  So you do have scenarios like that,
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  but then you have some of those less certain examples,
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  like what happens if there's a death or a disability of a member,
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  a bankruptcy, or you just have,
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  like I was saying before, a dissatisfied member who just wants to exit the deal.
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  what are the mechanisms for that?
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  How do they provide notice? How if their interest is going to be purchased,
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  is that going to be valued? And what are their general rights surrounding that
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  as well?
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  So a lot of these things that I've been talking about are things that,
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  you know, everybody wants the deal to go well,
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  but a lot of these are mechanisms for okay,
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  if things don't play out as planned,
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  what is your roadmap to keep things basically out of court?
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  How are some of these practical things going to be dealt with?
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  And when you're going into a syndication,
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  you really need to have everything papered accordingly because everybody wants
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  the deal to do well, but you need to have documents that say,
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  okay, if things go wrong or don't go.
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  that going to be governed. And so I'd say that's that's probably one
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  of the biggest things people just don't thoroughly think through but really need
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  to at the beginning of the deal,
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  not not once things go south.
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  Hmm.
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  It's it's kind of interesting you brought up the the aspect regarding
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  the interest rates increasing like it has.
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  We've I've heard of a number of commercial people having some troubles right
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  now because of it. It based on what you're saying there,
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  is it just based on, you know,
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  poor planning or or strategies that have caused this type of thing?
• 15:51
  Because it sounds like it's these these levers that you're talking about that could
• 15:57
  Possibly still save that opportunity in the end.
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  Yeah, it some of it comes with experience as well.
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  I mean theoretically some of the more experienced operators
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  may have more conservative assumptions and more reserves in place
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  for deferred maintenance and capital expenditures and
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  And really making sure that there's enough to continue to meet their returns.
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  some of the operators that are maybe less experienced,
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  particularly if it's been the last 10 years or so,
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  may have been in a circumstance where they saw nothing but positive upward activity.
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  And that can definitely shape your assumptions if you think things
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  are going nowhere but up, or you're hoping that interest rates will go down
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  in a shorter time frame than actually occurred.
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  and then again you're
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  You might be stuck in a situation where you're having trouble refinancing
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  or having to modify your loan and having a lot of difficult negotiations
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  and and possibly expensive conversations.
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  because very rarely do lenders accommodate you without you having
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  to pony up something for them in terms of credit enhancements or
• 16:56
  pay downs of principal.
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  very very rarely do to do you get something for nothing when you're trying
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  to basically extend a loan maturity and for a long enough period to either sell
• 17:06
  the asset or hopefully refinance the asset on better terms.
• 17:09
  Just to remind everybody, we are talking to Richard Crouch.
• 17:12
  You can learn more by heading over to Rich to WoodsRogers dot com that's gonna
• 17:18
  be a clickable link in the show notes.
• 17:20
  If you found some value in what we're chatting about so far,
• 17:23
  do us a favor, share this with one of your friends if you're watching us on YouTube.
• 17:27
  Give us a like and subscribe. So Richard,
• 17:31
  before investors typically engage you,
• 17:36
  what what has been the
• 17:38
  The biggest problem that that they've that you've encountered.
• 17:42
  Is it a is it a timing problem,
• 17:44
  a preparation problem, or something entirely different around their biggest mistakes
• 17:48
  before they even reach out?
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  I would say too often they tend to again,
• 17:53
  a lot of it's discounting the importance of properly documenting certain concepts
• 17:57
  and the business terms of the deal.
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  And sometimes they will sign something a little bit too hastily because again,
• 18:02
  you know, time kills deals. You don't want to lose the deal.
• 18:05
  but sometimes
• 18:06
  Yeah, you know, if you give yourself enough time,
• 18:08
  you can actually deliberate on things.
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  You can seek the advice of advisors and possibly avoid expensive mistakes.
• 18:15
  and I've seen it a number of times where somebody might sign a letter of intent,
• 18:18
  which is generally non-binding,
• 18:20
  but even within those letter of intents,
• 18:22
  you might actually have some binding sections within that,
• 18:24
  like an exclusivity
• 18:26
  Provision or something along those lines.
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  And sometimes s somebody signs something that they thought was really no big deal,
• 18:31
  they would just wanted to keep the ball rolling,
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  and they end up having a complication down the road.
• 18:35
  some of the other things that I've seen mistakes is in terms of
• 18:39
  not getting an attorney involved or having an advisor involved,
• 18:42
  is just assuming that the off-the-shelf agreements and contracts
• 18:47
  boilerplate and standard and adequately protect their interests when oftentimes they
• 18:53
  they're definitely lacking in terms of protection for your particular client.
• 18:56
  So signing things like that before you get an attorney involved and
• 19:00
  one of the things that oftentimes will happen as well is if you run into
• 19:04
  an issue either after you've signed an LOI or even worse after you've signed
• 19:07
  a purchase and sale agreement and maybe the issue that's arisen wasn't really
• 19:12
  contemplated.
• 19:13
  in that PSA, at that point in the game,
• 19:15
  you've also lost any leverage to try to negotiate a better position for yourself.
• 19:20
  And so that's definitely one of the risks,
• 19:22
  excuse me, that I see by people that move into deals too hastily without getting
• 19:26
  council involved.
• 19:27
  Well, we're gonna kind of jump into the operation side of this for briefly
• 19:30
  if you don't mind. You know, due diligence is one of the most document
• 19:34
  and process heavy parts of any deal.
• 19:37
  How has your firm's due diligence process changed operationally over
• 19:41
  the past few years?
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  So we always, always, always, regardless of when we've been engaged,
• 19:46
  regardless of when the deal is gonna close,
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  if we know we're representing the purchaser,
• 19:50
  for example, we've done enough deals that we know generally what the lender
• 19:53
  is going to ask for, what the issues are that are gonna arise.
• 19:56
  So we'll be ordering things like your third party reports like for title
• 19:59
  and survey and for zoning reports.
• 20:01
  As early in the process as we can.
• 20:03
  We don't really want to wait for a lender checklist or anything like that.
• 20:07
  Because again, we we know what they're gonna ask for.
• 20:09
  And once you get the purchase and sale agreement signed,
• 20:12
  every day is critical. I mean,
• 20:13
  you might only have like a 30-day due diligence period in some cases.
• 20:16
  And you really don't want to have to be stuck in a situation where you're having
• 20:20
  to post additional money to extend your due diligence period.
• 20:23
  you should always have provisions in your purchase and sale agreement for that,
• 20:26
  and that's something that we now
• 20:28
  make sure is in every PSA is that if for some reason you're still waiting
• 20:31
  on certain reports or you're still waiting on materials from the seller,
• 20:35
  which is pretty common, that you have an automatic right to extend.
• 20:39
  In fact, I would say as a purchaser,
• 20:41
  you should probably have language in your PSA that if the seller hasn't delivered
• 20:45
  some of their existing materials about the property and so on,
• 20:48
  within a certain number of days after the
• 20:50
  execution date of the PSA that your due diligence period should not even begin
• 20:55
  to run until you have all that information.
• 20:57
  Because that's another thing that we've seen through the years where
• 21:00
  the purchaser is ready and willing to move forward with their due diligence,
• 21:03
  but they're missing such a big piece of the puzzle in terms of being able
• 21:07
  to properly review everything and then they're
• 21:10
  They're ticking up against the end of their due diligence,
• 21:12
  and it became it can be very anxiety-inducing for a purchaser if they don't have
• 21:16
  everything. and oftentimes the parties end up extending anyway,
• 21:18
  in circumstances like that. So,
• 21:20
  so we basically help everybody review issues in terms of title
• 21:24
  and survey and zoning. one of the things that's very critical is making sure that
• 21:28
  you have things like
• 21:30
  Access, which can be revealed through reviewing surveys and titles.
• 21:34
  Because that's oftentimes something that people overlook,
• 21:38
  excuse me, overlook as well. So reviewing that,
• 21:40
  also reviewing existing leases,
• 21:42
  the title exceptions themselves,
• 21:43
  because you want to make sure there are no restrictions on whatever your proposed
• 21:47
  use is going to be for the property as well.
• 21:49
  Because again, these are all things where if you don't catch them early on,
• 21:53
  they can be very expensive mistakes or oversights to deal with later.
• 21:57
  So basically due diligence is very critical.
• 21:59
  You always want to have the ability to extend it if you can,
• 22:02
  because once it's come and gone,
• 22:04
  your deposit is going to go hard and you're going to have some exposure there
• 22:07
  or potential losses if there's anything that you've left unexplored.
• 22:11
  Is your team leveraging AI in any way at this point,
• 22:14
  or is that something you still do on fairly manually?
• 22:18
  I think there are certain efficiencies that can be realized with AI.
• 22:21
  I think there are some clients too that actually want attorneys to be using it.
• 22:25
  and I think their mindset is because the common model is you might have
• 22:28
  a partner who's using an associate to maybe do the initial review
• 22:31
  and then that review is being supplemented or double-checked by the partner.
• 22:35
  AI is is pretty amazing in terms of some of the things it can do.
• 22:38
  It can certainly help you organize your thoughts.
• 22:40
  I do think over the years it probably will make transactional attorneys even more
• 22:45
  productive. in what we were talking about before in terms of slower turnaround,
• 22:49
  hopefully it can expedite some of those slower attorneys too to keep
• 22:52
  the deals moving along. But at the end of the day
• 22:55
  It still it does make mistakes.
• 22:57
  So of course everything has to be verified by an experienced attorney.
• 23:01
  and it it can it can help you answer certain questions,
• 23:04
  but at the end of the end of the day,
• 23:05
  if you have a difficult decision to make or a difficult issue to navigate with,
• 23:10
  there really is no substitute in terms of having an advocate.
• 23:13
  negotiate on your behalf and share their own experiences with you
• 23:17
  in terms of pitfalls they've seen,
• 23:19
  mistakes people have been made,
• 23:21
  that are basically dealing with that perspective and those experiences from
• 23:25
  experience counsel are really no substitute for AI.
• 23:27
  although I think it can certainly enhance a transactional practice but
• 23:31
  but not fully replace it.
• 23:32
  Have you seen any other practice or investor become a little too reliant
• 23:38
  on the results that they're getting from AI?
• 23:40
  There was one and you may have heard of this.
• 23:43
  This was more of a in the litigator's context in terms of drafting briefs
• 23:48
  to be filed with the court. And it sounded like they did not have they didn't check
• 23:52
  it themselves. They didn't have an associate double check some of the case citation.
• 23:57
  It's and it basically turned out that
• 23:59
  It was a brilliantly drafted brief and it really w advocated
• 24:03
  its client's position very well,
• 24:04
  but it basically was citing some fake cases that didn't actually exist.
• 24:09
  And what happens there is there's the potential for clients to get sanctioned.
• 24:13
  There certainly is the possibility of attorneys being sued
• 24:16
  for malpractice or further having disciplinary issues,
• 24:19
  possibly losing their licenses for basically citing cases that don't exist.
• 24:23
  So that was definitely a prime example and a an example that pretty much
• 24:27
  any any attorney is given as a cautionary tale in terms of relying too much on AI.
• 24:31
  Sure. Do you do you foresee like what what what does this landscape look like
• 24:37
  to you in the near future? Like are you gonna are we gonna see swathes
• 24:42
  of the legal system being replaced by AI or it sounds like it's more
• 24:46
  of a augmentation and speed associated with it than anything else?
• 24:52
  That at this stage that's how it should be used.
• 24:54
  candidly, there are some firms where they're not necessarily laying
• 24:58
  off paralegals and young attorneys.
• 25:01
  Because that's that's kind of where the biggest danger area might be.
• 25:05
  but at the same time, they're not necessarily hiring at the pace that they
• 25:09
  may have been in the past.
• 25:10
  be because of some of those efficiencies and some of those enhancements,
• 25:14
  the need to add additional people is not as great.
• 25:17
  And
• 25:18
  So that's that's one thing that's interesting.
• 25:20
  I fortunately for me, there will probably always be a need
• 25:23
  for experienced attorneys, people that have been doing it for
• 25:26
  at least several decades. because again,
• 25:28
  you you just need the insight of somebody who's encountered issues,
• 25:31
  seen contention between parties and how that's been resolved.
• 25:34
  but for some of us, the younger
• 25:36
  associates and paralegals. they do they have some exposure there,
• 25:39
  but it doesn't seem like anybody's losing their jobs yet.
• 25:42
  It just seems like there are not as many opportunities in terms of
• 25:45
  new hires that we're seeing.
• 25:47
  You know, that's kind of interesting you bring that up because that's that's what
• 25:50
  I'm seeing as well. You know, it's kind of
• 25:52
  Causing causing people not to hire as many of the of those entry level positions.
• 25:58
  Unfortunately, it's those entry level positions that eventually become senior.
• 26:02
  And,
• 26:03
  Right.
• 26:03
  you know, you're not giving those people the opportunity to to kind
• 26:07
  of build themselves up into the role that they eventually need to become.
• 26:12
  It is it does seem to be somewhat short sighted in the grand scheme of things.
• 26:16
  'Cause yes, I I I'm lucky that I'm an experienced attorney,
• 26:18
  but who's gonna come behind me in in fifteen,
• 26:21
  twenty years? it's it's a very good point,
• 26:23
  in terms of having depth. definitely
• 26:25
  Well, Richard, this has just been a fantastic conversation.
• 26:28
  again, I'm gonna remind everybody it's woodsrogers dot com.
• 26:31
  You can learn more, clickable link in the show notes.
• 26:34
  Is there anything else we should have tried to hit on here before we
• 26:37
  st jump into the rapid fire and close out this episode?
• 26:40
  I would say the one thing to keep in mind is rather than viewing your attorney
• 26:45
  as as a a cost center and the impediment department,
• 26:49
  really surround yourself with good advisors,
• 26:51
  including an attorney, including a CPA,
• 26:54
  including maybe a talented team of brokers,
• 26:55
  and allowing their expertise to strengthen you.
• 26:59
  and when it comes to a transactional attorney,
• 27:01
  very rarely
• 27:02
  has there been some brilliant legal argument that has helped resolve
• 27:06
  a deal after the fact. I mean it that certainly has happened as well,
• 27:09
  but far more often than not, deals that that I've been able to save have been more
• 27:13
  because an issue was anticipated and dealt with in a timely way before
• 27:17
  it actually became a legal issue.
• 27:19
  So just tend to think of attorneys in that standpoint as somebody that
• 27:23
  can really help keep you out of sticky situations and more of
• 27:26
  a strategic partner than than a lineup.
• 27:28
  Well, that was fantastic, Richard.
• 27:30
  if you're ready, we'll jump into the rapid fire and close out this episode.
• 27:33
  What lie do real estate investors often tell themselves?
• 27:36
  They oftentimes tell themselves.
• 27:38
  I think that if they ignore certain problems,
• 27:41
  sort of like preferred returns,
• 27:43
  that the problem will go away,
• 27:44
  basically playing ostrich. And it tends to just fester all the more
• 27:48
  if they're not proactive about communicating.
• 27:50
  And so I think that's that's definitely a naive thing that a lot
• 27:53
  of syndicators will do by not maintaining open communications with their investors.
• 27:59
  If you could go back in time and give your younger self a piece of advice,
• 28:02
  what would it be?
• 28:03
  Have a pretty diverse practice area.
• 28:06
  There's a lot that I have seen,
• 28:08
  but having gone through two cycles with the GFC and then the more recent cycle that
• 28:13
  you see with the spike in interest rates,
• 28:15
  having a diverse practice area where maybe you're also doing a lot of loan workouts.
• 28:20
  closure work, things where you can quickly pivot when one area contracts,
• 28:25
  I think would be good good advice back then.
• 28:28
  and that's that's probably where I would lean.
• 28:31
  As you were scaling your practice,
• 28:33
  what was your first hire and would you make any changes there?
• 28:37
  I think probably the first time I noticed that I was able to finally scale
• 28:41
  my practice is I had an associate where I feel like he really tuned in
• 28:46
  to not just what I wanted but what clients wanted and it enabled me
• 28:50
  to finally put trust
• 28:52
  in somebody else because I think I struggled with that too.
• 28:55
  You know, there's that mindset that nobody can do it as well as yourself.
• 28:58
  and when I finally started being able to do that and having confidence that they
• 29:02
  would follow through and follow through in the way that both I
• 29:05
  and the clients expected them to,
• 29:06
  that really enabled me to expand my bandwidth and to grow my practice.
• 29:11
  And still work with him today.
• 29:13
  He's a partner now. And I'd like to think that he he uses a lot of what
• 29:17
  I taught him as well. but I think that was probably the most significant thing
• 29:20
  is when I really had a good resource like that,
• 29:22
  I could basically duplicate myself and that basically enabled me to basically
• 29:27
  go to the next level and expand my practice then.
• 29:30
  And then finally, what single tool or process have you implemented that
• 29:34
  has had the biggest time saving impact?
• 29:36
  I think in terms of allocating responsibility,
• 29:39
  educating the clients, and basically being very proactive
• 29:43
  and prophylactic and making sure that your clients know what they're supposed
• 29:46
  to be working on, giving them very clear action items for what they need
• 29:51
  to take care of to basically get to the finish line of the transaction.
• 29:55
  as well as doing that with my own team at the very beginning of the deal.
• 29:59
  Not hoping that they get it, not hoping that they
• 30:02
  Don't need me to ask them about it later.
• 30:04
  Basically having those systems in place,
• 30:07
  having those lists, having basically standard communications with the clients,
• 30:12
  templates, things like that to basically maintain consistency and uniformity.
• 30:16
  I think deal after deal, year after year,
• 30:18
  has probably saved us the most time by not having to scramble if somebody were
• 30:22
  to overlook something.
• 30:24
  Well, Richard, I really appreciate your time.
• 30:26
  One more time you can learn more at WoodsRogers dot com.
• 30:31
  That's gonna be a clickable link in the show notes.
• 30:32
  But I really appreciate your time.
• 30:35
  I hope you'll consider coming back.
• 30:36
  It was great to meet ya.
• 30:37
  Likewise, likewise. Appreciate you having me.