In this market, finding viable real estate investments is hard.
Getting a good deal is a blood sport.
Whether you’re making your first CRE investment or your thirtieth, you’ll probably feel the temptation to “trust your gut.”
After all, you didn’t get this far only by trusting other people’s advice.
But can you really trust your gut when it comes to commercial real estate (CRE), especially in these crazy times of high interest rates, wobbly banks, and sky-high asset prices?
There’s actually an easy answer: If you’re already at the top of the field, by all means…then yes, trust your gut.
Like Modesto Maidique points out in an excellent HBR article, accomplished CEOs in their industries often cite “trusting their gut” when pressed on how they made their most important and fruitful decisions.
No wonder – most of these leaders are truly among the most visionary and accomplished people in their industry. And as Modesto says, “intuition is the handmaid of experience.”
Their intuition is like a powerful playbook distilled from decades of experience and expertise.
But what happens when they venture beyond their core areas of expertise? Well, Warren Buffet’s gut led him into a $200B blunder, which you can read about in Modesto’s article.
Uh oh.
At Cardinal, we know when to trust our gut. And we’re CRE pros. But few of our clients are.
And since we don’t think “trust us and our gut” is an effective sales strategy, we’ve distilled our experience and expertise into tools that can show our clients HOW we put that hard-earned intuition into action.
One tool in particular helps clients understand whether they’re likely to get a good deal—even in markets like this one.
It’s called The STP Scorecard™.
In a nutshell, it compresses 30 years of CRE expertise into a 30 Question assessment that reveals whether or not there is a good deal to be made.
Given our proximity to all things NASCAR, we like to think of it as a tool for answering the “Richard Petty” question: “Does this deal have STP?”
So, what is STP? Let’s take a look under the hood, one letter at a time:
The “S” in STP represents the Seller circumstances behind the deal. Do they need a quick sale, or is there no urgency at all? Are they aggressively marketing the property, or do they prefer to keep things quiet?
“T” relates to the difficulty of the Transaction. Does the deal have significant legal and/or tax consequences? Are there multiple owners involved?
And, finally, “P” assesses the attributes of the property itself. Is it fully occupied or vacant? Old or new? Are there deferred maintenance issues?
After answering 30 questions about these “S”, “T”, and “P” issues, deal makers get a summary score that is proportional to the probability of getting a below fair market value deal.
The higher the score, the better the deal.
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“I’m a great deal maker in office space, but The STP Scorecard™ lets me easily compare similar deals to find advantages that might not be obvious. Plus, it’s fast and fun, and gives me confidence to stretch outside my comfort zone”
-Hunter Bost, CRE Investor
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We think of The STP Scorecard™ as a systematic and reliable “gut check.” Sure, we’ve done hundreds of deals and learned hard lessons along the way. We could probably go into most negotiations completely blind and still be confident we’d do okay.
But having a fast, repeatable process of running through all the issues that could make a deal go north or south gives us confidence every time. Plus, it turbo-boosts our ability to compare and prioritize dozens of opportunities simultaneously.
So, we invite you to give The STP Scorecard™ assessment a try. It’s like getting $5,000 in deal consultation and analysis for 10 minutes of your time…for free!
After going through the assessment, we think you will not look at your deals the same way again.
If nothing else, you’ll find out if you’re really as smart as your gut thinks you are.
