The California Commercial Real Estate Luncheon & Expo
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‘Pearls of Wisdom’ Highlight 5th Annual Commercial Day
A capacity crowd turned out to learn the numbers, the different formulas, the mathematics that determine if this commercial investment is a guaranteed loser or that apartment complex is a moneymaking prized possession.
What attendees got were pearls of wisdom from one investor who transformed a $130,000 investment in a duplex thirty years ago into a real estate empire encompassing 88 apartment complexes. They also gleaned deep insight into how different players in a commercial transaction come up with different conclusions about the same set of numbers.
That’s why the theme of the fifth annual Commercial Day presented by the Commercial and Investment Division of the Southland Regional Association of Realtors was “Do the Math.”
The different perspectives on the numbers were detailed by Chuck Weinhardt, Union Bank, who focused on the mathematics of apartment loans. Edward Padilla, Opus Bank, targeted commercial real estate math, while Vlad Ballesteros, First Citizens Bank, which sponsored the event, explored the numerical pros and cons of owner/user commercial loans.
But the mistress of math turned out to be Carmela Ma, an internationally renowned broker and CCIM senior faculty member. Ma delved deeply into the three phases in every commercial real estate investment’s life cycle-acquisition, ownership, disposition. Miscalculate, or even worse fail to calculate, key numbers in each phase greatly reduces the odds of success. Top commercial real estate professionals complete over 150 hours of education delving into the numbers that Ma tossed around with the greatest of ease.
Yet the surprise of the morning seminar were the nuggets of information that emerged from a modest yet highly successful investor, Paul Ling. Over three decades Ling transformed a $130,000 tax shelter into ownership of 88 apartment buildings, some of them initially managed by Ling, so that he’d deeply understand the numbers behind each investment. “When we get bigger, we hire a manager,” he said, noting that loyalty means a lot to him as he uses different professionals and several property management companies consistently. He says he can tell within the first minute of a conversation if an investment is a good one, and he can receive five or six calls a day from brokers pitching a multitude of local properties.
Gaye Rainey, SRAR president who moderated the program, noted that of the 9,100 members of SRAR, about 1,000 specialize in commercial real estate. “SRAR’s commercial and investment division is one of six nationally recognized associations in the nation,” Rainey said. “A seminar on doing the math illustrates how we’re adding to our members’ knowledge and expanding awareness.