Ch-Ch-Changes

Just gonna have to be a different man.

Time may change me; but I can't trace time.

David Bowie’s hit from the ‘70s could be an anthem for the current times. Companies have been forced to adjust, adapt and ally in ways never envisioned before. Take a look at how some companies are making the change...

• Pulte (for sale housing) appoints Avalon Bay CEO (for rent housing) to its Board of Directors. Could this portend a move into rental housing for volume builders?

• National homebuilders Lennar and Toll Brothers open real estate investment funds for distressed properties. Evidently, REO = ROI.

• Westinghouse teams with Lennar on solar homes. Too bad “Sun City” is already trademarked.

• Panasonic considers building smart homes in one of their Japanese factories. An app is sure to follow.

• The Bill & Melinda Gates Foundation funds a $42m initiative to reinvent the toilet. No kidding. Talk about being flush with money.

• Google invests $280m in SolarCity to help homeowners put in solar panels. And, they’ll know where and how you spent every kilowatt.

• DR Horton launches new micro-home project (Division 43) on a 1/3 acre, urban infill site. No job too small for this industry giant.

• SunCal trades development services for 180 acre tract of land. Why buy when you can barter?

It's Not About the Money

The constant stream of negative news in our industry makes it difficult to motivate employees and sustain morale. To borrow a line from “American Pie” (the song, not the movie), there seems to be a lot of “bad news on the doorstep”. It’s become a daily challenge for owners and executives to keep their teams focused and energized. However, don’t think hope has taken the last train for the coast; there are steps you can take that are simple, sustainable and require little or no money. Read on...

Understanding What Truly Motivates People

A really smart guy by the name of Dr. Frederick Herzberg led a study in the 1960’s and identified six factors that truly motivate people.

• Feeling of Achievement
• Recognition / Status
• Continuous Learning
• Responsibility
• Meaningful Work
• Advancement Opportunity

These motivators become self-evident when employees take the initiative without being asked, go the extra mile or become intensely focused on their work. And, they vary from person to person.

Notice how money is missing from the list above? That doesn’t mean it’s not important. Herzberg found six drivers that aren’t motivators but when overlooked, lead to dissatisfaction among employees. He calls them “hygiene” factors:

• Salary / Compensation
• Job Security
• Supervision / Mentorship
• Policies / Procedures
• Work Conditions
• Interpersonal Relationships

What You Can Do

First things first: let's recognize that two of the significant Hygiene factors– Salary and Job Security, are big question marks at the moment. As much as you would like to pay your employees more or assure them job security, the market conditions might not support it. That’s the cold, hard truth so no need to dance around it.

However, there are many things employers can do for their employees that have nothing to do with that. As Dr. Gary Williamson, an industrial psychologist with PSP Metrics notes, “Five of the six motivators have nothing to do with money or promotion, therefore there is no reason (for an employer) to not provide them.”

• Step 1: ask your employees to force rank what matters most to them among the following motivators: Feeling of Achievement, Recognition / Status, Continuous Learning, Responsibility, Meaningful Work.

• Step 2: do the same exercise for the Hygiene factors that you as an employer have control over: Supervision / Mentorship, Policies / Procedures, Work Conditions, Interpersonal Relationships.

Remember, these twelve drivers vary from person to person and can change over time. Recognition and Achievement might be high on the list for someone in his/her 30’s but shift to Meaningful Work as they mature. Your goal is to learn what really matters most to each employee today... the top 1-2 drivers for them in both categories that you CAN control... and do something about it.

Want to learn more? We came across this entertaining video that demonstrates what we’re talking about. Enjoy! http://www.youtube.com/watch?v=u6XAPnuFjJc

Credits:

• “One More Time: Answers for Motivating Today’s Employees”, Dr. Frederick Herzberg, courtesy of PSP Metrics.
• Dr. Gary Williamson, Managing Partner, PSP Metrics, Pittsburgh, PA

What Makes Companies Successful

Ever wonder what makes some companies more successful than others? Some insights were offered by David Gardner (cofounder of the Motley Fool) in an interview with business writer Will Deener. Gardner's stock picking strategy includes more than just what's on an income statement or balance sheet. The financial data has relevance, but he places as much or more emphasis on the following: what really makes a company tick...

• What is the company’s culture?
• What is the value of its brand?
• What is the personality of the management team? Does the CEO embrace a sense of humor? Tip: people perform better when they work with people they like.
• Is the company innovative and creative?

Gardner: “It may be hard to express those things as a number, but they’re a lot more tangible and real than a lot of things on an income statement. If you can’t make people smile or laugh, it doesn’t mean you’re a bad person, I’m just not interested in your company."

Regarding the ability to innovate or be creative: Gardner likes to invest in companies that have the ability to disrupt competitors through innovation. Example: Netflix, which blindsided its main competitor (Blockbuster) with a different delivery model of the same product. Since entering the movie rental arena in 2004, Netflix share have risen from $17 to $220 while Blockbuster struggles to reinvent itself and simply survive.

PS: if innovation is something you thrive on, check out Different by Youngme Moon. It's chocked full of case studies similar to the Netflix example.

Timesharing Your Expertise

Had an interesting discussion with a survivor from the RTC days. In the late ‘80’s, this gentleman was laid off from a civil engineering firm he’d worked with for the past ten years. Full time jobs in his field were in short supply and when they did surface, the competition was fierce due to the oversupply of candidates. He landed a few consulting assignments here and there while he continued his search for a full time position, but nothing of a consistent nature. He desired a more certain future... if not a full time job, then at least some type of recurring work he knew he could count on and look forward to. Any of this sound familiar?

Well, the solution he came up with proved to be unique, timely and cost efficient. Rather than pursue piece-meal assignments on a scattered schedule, he “sold” his services for one day a week to four companies, none of which needed a full time employee but all needing extra help. Just as today’s companies are doing more with less people, these companies could easily justify this arrangement to avoid overloading their regular staff. Plus, they knew what they were getting in terms of expertise each week and tailored the workload according to this person’s skill sets.

Our friend didn’t replace his income 100% nor did he reap the benefits of a full time employee, but the fractional strategy helped him survive the recession of the late ‘80’s. He also expanded his sphere of influence by working with four companies vs. one and was able to use them as references when the need arose. Best of all, he no longer faced the uncertainty of what lied ahead in the weeks to come.

There’s something for companies to learn from this story, too. We’ve made this case before: there is an amazing wealth of talent sitting on the sidelines, just waiting to be tapped– if not permanently, then part time. Not just line staff, but senior level executives from companies known for best practices. What would your company gain by hiring the former Corporate Controller from a national real estate developer for one day/week for a few months? Or, the former VP of Customer Service from an award winning home builder? Tap into the brain trust while it’s available.

How to do that? Well, we’ve got some ideas on that which we’ll be sharing soon. Stay tuned.

Drilling Down on Steve Jobs

We've said it many times before: if you really want to understand a candidate you must dig deeper than their initial answers. It's called "drilling down", and while it may sound interrogatory, it simply means understanding the Who, What, Where, When, Why and How to an answer. The exercise has equal value in sales situations: solicit this information from your customers and it becomes much easier to address their needs.

A good example is provided by Bill Conaty and Ram Charan, authors of "The Talent Masters". Imagine how helpful it would be to understand Steve Jobs... as a candidate or customer... to the degree described in this post.

2010 in the Rear View Mirror

As 2010 draws to a close, we hope the new year offers greater opportunities for all our friends in the real estate industry. To that end, we've highlighted some of the more popular posts and industry topics below. Best wishes for a better 2011, from all of us at the Talon Group. Bob Piper, Rodney Hall, Tony Cleveland and Jean Mason.

Loss Share Agreements: the FDIC's strategy to avoid repeating the fire sale days of the RTC period. Bundle distressed bank assets in a portfolio, sale to an investment group with a five year protection period against loss (up to 20% of the portfolio value). Learn more about it or risk not being invited to the dance in 2011/2012.

More things FDIC. The FDIC and its approved subcontractors (RAC's) went on a hiring spree this past year and most likely, will continue the pace through much of 2011. Don't make the mistake of thinking all the jobs are finance and accounting related; there's work to be done in all facets of the industry. This post addresses employment opportunities with the FDIC, while this one focuses on those with FDIC approved subcontractors.

Repositioning Your Business or Career. Developing new products and services could be critical factor for survival in the years ahead. Here's how one builder/developer addressed the situation.

Purpose Driven Networking. Launch an effective networking campaign without becoming a pest to everyone you know by starting here.

The Problem with LinkedIn Recommendations. Heavy on superlatives, light on specifics. Most have the objectivity of your mother. Here's a better way to solicit recommendations from past co-workers or bosses.

The Naked Interview. With a title like that, it's bound to be more fun than a regular interview, right? Strip away all the typical interview questions and try this if you want to really understand a candidate.

Our Favorite Interview Question. Self explanatory... read about it here.

Lesson Learned in the Search Business. Also known as Talon's School of Hard Knocks. Save yourself time and pain by learning what we learned (the hard way) over 25 years.

We Asked You: "How has the industry changed in the last 25 years?" Here's what you had to say.

Best Reads. Two books captured out attention this year. "Different" by Youngme Moon talks about separting your product, service or brand from the competition. This short clip sets the tone. Also, check out "Getting Naked" which makes the pitch for greater authenticity and transparency in business relationships.

Skinny Offerings at Fall ULI

We hoped to hear some great insights (if not encouragement) at last week’s ULI meeting but there wasn’t much to go around. The short version: we’re still in for a long slow recovery, so don’t expect to see huge improvement anytime soon. The lone bright spot appears to be the multifamily sector. With occupancy rates hovering above 90%, apartment projects are cash flowing and lenders feel comfortable enough with the underwriting to lend on them. As far as any other real estate category, it’s persona non grata. Here’s what we heard:

Capital Sources

• Pension Funds & Insurance Companies: no interest in participating in blind pools or anything with comingled financing. (For some crazy reason, they want to know what they’re investing in before they commit money. Yet another "new normal". )

• Private Equity Groups: appear to be sitting on more money than the Swiss banking industry but have been slow to put it in play. Reasons abound, along with pointed fingers: hurdle rates are too high, the best deals are tangled up or owners (read banks) are not willing to absorb the impairment to market values (read “what a willing buyer is willing to pay”). As one hedge fund veteran described it: “We’ve initiated letters-of-intent on 40 deals this year and have yet to complete one of them.

• Foreign Capital: One regional homebuilder enjoying success in the fast recovering Mid-Atlantic region said private equity groups, along with a few regional banks who weren’t heavy in real estate before, have been pursuing their business. Regardless, he said he’s seen more than a few deals completed this year with capital sourced offshore, through groups in Japan and Germany. Will this become more common? Do they interpret underwriting differently than their domestic peers?

Hardest deals to finance

• The blind pools and deals with comingled financing mentioned earlier, along with distressed properties or anything that has hair on it (e.g. unresolved regulatory issues), are next to impossible to finance at the moment. Of course, those metrics describe the majority of the deals out there, but who's keeping track? Creative underwriting won’t help; it’s like putting lipstick on a pig. Until something happens that allows re-pricing of these assets, they will continue to be pigs in the eyes of every capital provider... no matter how well you dress them up.

Key to success for new projects

• Using entrepreneurial skills to bring distinction to a project over what is already out there. For community developers, is there a deeper role the information center can play in the community versus just a purveyor of collateral materials? What about a day care center exclusively for residents in a first time buyer community? Or, an on-site medical center in an active adult community? (If any of this resonates with you, check out “Different” by Youngme Moon.)

• Smaller tracts with shorter build-out cycles appear to a the honey hole. (Check your redneck dictionary for that term.) Ten reasonably priced deals with 100 lots per community carry far less risk than a bargain basement purchase of a single 1000 lot PUD. Deals that don’t require massive upfront investments for infrastructure and can begin booking sales sooner are like a warm Snuggy to capital providers. Five to ten year build-outs no longer work for most of these firms, no matter how much data you plug into the proforma. One private capital player said he’s even skeptical of three and four year projections; he wants to see deals that can be bought and sold out within a few years.

The Chairman's Report

Finally, we were hoping to hear some really good scoop from Sheila Bair’s address. Ms. Bair is the Chairman of the FDIC and the holder of all things secret in that department. For the most part, they remained secret. She gave a confident, eloquent speech that lasted fifteen minutes, followed by another 15 minutes of Q&A. When all was said and done, her 30 minutes of face time yielded little in the way of specifics: no action plans, no strategy, no policy direction. But gee whiz, she sure sounded impressive on the podium. Maybe that’s why she’s parked in Washington DC; she sounded like a politician!

Turns out there were better panels to sit in on. Earlier this week, Builder Magazine posted a much more informative article on deals that have been done with the FDIC and how they were structured. We’ll save you the trouble of looking for it; check it out here. Next time, we'll study the program agenda a little better. Click here to read the Builder Magazine report.

Repositioning Your Business or Career

The reports coming from last week's Fall Meeting of the ULI point to a long, slow recovery, or as Ivy Zelman once described it, a "canoe" rather than a broken "W". The extend & pretend recovery will continue to force many builders and developers– i.e those without access to public money– to the sidelines for the foreseeable future. So, what happens when a talented management team finds itself blocked from their normal line of work? The answer: attack the issue the same as a real estate project in need of repositioning: develop new product and services to address the "new normal".

Perhaps the best example of this can be seen on Lakewood Real Estate Solutions new website. LRES is comprised of the former management team of Lakewood Homes, founded in 1990 by Buz Hoffman. For the last 20 years, Lakewood has been known in the Chicago market as an industry leader, offering superior housing product and thoughtfully planned communities. During their reign, Lakewood attracted some of the best talent in the Chicago market, the same talent that now comprises Lakewood Real Estate Solutions. When the recession and resulting credit crunch pushed them to the sidelines, they chose to leverage their in-house talent as a workout team, helping banks and institutional owners with distressed real estate assets.

That alone isn't necessarily headline news; after all, many professionals in our industry are trying to do the same thing. The differentiator in their case is a unified team with a proven track record, combined with a website that is simple and delivers a crystal clear message. We first learned about it when one of their first blog posts, "Buzzwords" arrived in our Inbox. The email announcement captured our attention for two reasons: it was clean and attractive, but also lent a positive feel to an otherwise discouraging business (workouts). We also like how they invested the time and energy to develop a professional, multifaceted website. Everything about it smacks of professionalism.

Whether you're a one man show or a team of talented people, you might want to consider doing something similar to what Lakewood has done. It will require some investment, but there are plenty of off-the-shelf products to quickly build something similar to what you see on Lakewood's site. A $1500 investment and monthly fee of $40 (for web hosting) should get you there. (Check out Adobe's Business Catalyst, a suite of services that in addition to web site development also includes blog posts and email campaigns.)

Before you balk at the cost, keep in mind that promoting yourself and your experience has never been more important. If the latest reports for a long, slow recovery are an indication, short term contract gigs might become de rigueur. A multifaceted site like this helps people find and learn about you. One other benefit– it lends greater credibility to your job search when you've been "consulting" for over a year (or longer).

Check out Lakewood's web site and feel free to post your comments; they would appreciate the feedback.

Pony Rides and the Great Real Estate Recession

The forecast continues to look bleak for real estate development of any kind, but particularly the commercial real estate markets, which appear headed for a financial tsunami. The numbers are large enough to cast a shadow over every facet of a recovery, even when divided by two. Somewhere in this pile is a pony, i.e. opportunities for investment and employment, assuming you know where to look. (Check out our prior posts on the FDIC/RAC's, for one.) The point: real estate projects (distressed and otherwise), will still need to be analyzed, managed, leased, sold, finished, marketed, etc. provided you connect with the right buyers and sellers. Here's the state of the union and best guesses for what's coming. In coming weeks, we'll talk about how to ride the pony.

• $38 billion – the remnants from failed banks that the FDIC is trying sell, ranging from virtually worthless mortgage backed securities to office decorations such as plastic Christmas trees.
• $1.4 trillion – the total original value of commercial real estate loans due to reset between 2010 and 2014, nearly half of which are underwater, i.e. the borrower owes more than the underlying property is worth. (Congressional Oversight Panel Report
• 40% - the decline in commercial property values since 2007.
• $280 billion – the additional loan losses that will need to be absorbed based on extrapolating the last two points.
• 94% - the portion of failed banks (since 2008) that had real estate loans as their largest category of delinquent debt. Construction loans accounted for 23% of the total. (SNL Financial)
• 35% - portion of which real estate loans comprise the total loan portfolio of most banks.
• 95% - portion of real estate loans comprising the total loan portfolio of Imperial Capital Bank in La Jolla, CA.
• 33% - amount of total U.S. deposits held by Bank of America, JP Morgan Chase and Wells Fargo following consolidations and acquisitions, up from 21% in 2006. (SNL Financial)
• 280 – the number of bank failures since 9/25/2008.
• 829 – the number of U.S. banks currently on the FDIC problem watch list. (Standard & Poor).
• 2932 – potential number of bank failures over the next decade (Keefe, Bruyette & Woods.)

Tip of the Month: Indeed.com

If you’re in job search mode and not familiar with Indeed.com, you should be. Indeed.com is a free service that scours the top job boards and Fortune 500 companies for new openings daily. To give you an idea what I’m talking about, today I searched for “Real Estate” as a keyword in the following markets and this is the number of advertised openings that came back:

Dallas, TX: 2040
Houston: 984
Charlotte: 638
Phoenix: 977
Washington DC: 2979
Atlanta: 1264
Chicago: 2286
Denver: 789
San Francisco: 2246
Los Angeles: 3886
Orlando: 549
Miami: 1085
Las Vegas: 386

If you care to add it up, that's 20,109 openings in those thirteen markets alone. Granted, not all will be real estate specific roles and only a portion might be a match. However, shrinking the total to 5% or 10% still leaves a decent number of job leads... not to mention the opportunity to identify companies you didn't know of before.

Indeed will also notify you when a new position is posted in your area which meets your personal interests or criteria, so you don’t have to recheck it every day. This is truly a great service, especially considering the price of admission (FREE!).

Cover Letters - Less is More

Talon Tip: keep your cover letters and introductory emails short. Imagine someone reading it on a smart phone with a small screen. Here’s a draft I helped someone with earlier this week (the original was three times longer):

- - -

Dear Mr. Hall,

Thank you for your time today. Per our discussion, I am interested in a Chief Financial Officer position. A brief recap of my experience:

• Acme Homes: three years as CFO of this $100M homebuilder
• Chesterfield Homes: ten years as Controller for this regional builder.
• Deloitte & Touche: seven years experience in public accounting and tax advisory

I’ll be happy to forward a full resume upon request or, feel free to view my public profile on LinkedIn.

Thanks again for your time and interest.

John Doe
jpdoe@hotmail.com
555-712-9758

Real Estate Market Update- 9/2/10

"Are you seeing any improvement in the market?"

That's the most common question we hear from people lately– inside and outside the real estate industry. Here are some of our observations based on market data, first hand accounts and listening to OPO (Other People's Opinions). We don't recommend using this to re-balance your retirement account, but at least it will provide a glimpse of what we're seeing and hearing.

• First things first, without question we've seen an uptick in search activity this year. It's not surprising when you consider the meltdown of 2008-2009; it would be hard not to post a respectable gain. Regardless, our search activity for the four months of May to August was reminiscent of the go-go years of 2006 and 2007. We actually broke a sweat!

• Is this a sign of a recovery? Who knows. Our search activity remains confined to a small group of builders and developers who cleared the impairment hurdles or were lucky enough to sidestep legacy debt issues. In several of these instances, they are hiring in multiples: one client retained us on five searches YTD, another on four. It's been a long time since we've seen nine searches from two clients.

• "Confined to a small group..." could also read "which leaves a large group sucking wind on the sidelines". Some appear to be highly cautious and conservative, others paralyzed by the lending freeze that blankets our industry or from being boxed out on land positions by the big builders. How much longer they can withstand these challenges remains to be seen.

• Meanwhile, a hiring campaign has been underway at the regulatory agencies (FDIC, FNMA) and the subcontractors they work through (RAC's). For many in our industry, this could prove to be the safe harbor (employment-wise) while waiting for the storm to pass. We posted on these job opportunities (and how to pursue them) twice before. If you missed them, here are the two links: FDIC Part I and FDIC Part II

• Another common trend during market corrections is the rise of small start-ups. Weak employment motivates many real estate professionals to create their own opportunities, usually by banding with a handful of peers to offer turnkey solutions to banks, institutional owners or by raising seed capital to do deals under the new basis thresholds.

• One thing is becoming clear: to survive (prosper?) in our industry today it helps to have an alternate strategy. For some, that might be a Plan B or C... and some of which have yet to be defined.

Behavioral Interviewing, in simple terms

“The best predictor of future performance is past performance”

If you've ever been in an interview and heard a question that started with "Tell me about a time...", then you've experienced a behavioral interview question. Behavioral interviewing is said to be 55% predictive of future on-the-job behavior, while traditional interviewing is only 10% predictive. As a result, more companies are adopting Behavioral Interviewing methods. Don't let the name intimidate you; the process is quite simple. All you need to remember is "STAR"; is that simple enough?

STAR serves as an acronym for the outline of a behavioral interview question and stands for:

• Situation / Task
• Action
• Result

In a behavioral interview, the objective is to learn about a candidate through a series of questions that draw on his/her past experiences: situations faced, actions taken, results delivered. If an interviewer wants to learn about a candidate's managerial experience, he might ask "What was one of the more difficult employee situations you've dealt with in recent years." From this starting point, a skilled interviewer can delve into a variety of questions: What were the circumstances surrounding it? What actions did you take? What other actions did you consider? What led to follow the path you took? What was the outcome? Given the opportunity, would you have done anything differently?

As you can see, this one question can lead to long list of other questions. It's possible to spend 5-10 minutes on one question with the STAR outline. This is when an interviewer begins to truly understand a candidate: how they identified the problem, assessed the situation, determined a course of action, experienced the results and what they learned in the process. Best of all, everything is based on a candidate's first hand experiences, not speculation or educated guesses on how they would handle something. As one of our partners is prone to say: "One is fiction until proven to be fact. The other is just plain fact."

One final thought: candidates should not feel obligated to come up with a stellar result for each question. A candidate's most valuable experience might have had a less than favorable outcome. However, this usually requires encouraging a candidate to speak openly and assuring them that a negative result does not necessarily demean their candidacy.

FDIC Opportunities, Part II- Navigating the RAC List

One of our recent posts focused on employment opportunities with the FDIC. However, most of those require prior experience with bank workouts and represent only a small portion of the total opportunities. For most real estate professionals, the gold mine of opportunities is with firms approved as primary subcontractors for the FDIC. These are the firms that actually manage the assets, determine values and strategies for liquidation, etc. For example, CB Richard Ellis is said to be targeting 600 new hires nationally for FDIC related projects. As more real estate portfolios end up in FDIC receivership, new positions will continue to surface with FDIC contractors requiring expertise in general operations, sales and marketing. Here's a strategy on pursuing those opportunities, sometimes before they've even been posted.

Step 1: The FDIC Receivership Assistance Contractors (RAC's)

The FDIC has published a list of firms approved to help with the management and liquidation of REO assets. The list is divided according to specialty or disciplines, some that appear to cross over each other. Your first task is to build a spreadsheet with the companies and contact names that could apply to your field of expertise. Don't be surprised if you end up pulling contacts from four or five of the listed groups; that alone should give you 30-40 potential employment contacts.

Step 2: Use Jigsaw.com to go beyond the immediate list

Here's an example of how to expand your reach with the RAC list: scroll down the RAC list to the second group that's focused on Owned Real Estate (ORE). The first subcontractor listed is CB Richard Ellis' Dallas office. A general email address is provided as well. You should certainly send your information there but I'd recommend going one step further by identifying one or two others in the same CBRE office whose titles indicate some involvement with asset management or liquidation. Using an online directory like Jigsaw will save loads of time and help you quickly identify who's who in a company. The monthly fee of $25 month is a bargain and allows up to 150 contacts to be pulled each month.

Don't stop there: use Jigsaw to determine if CBRE has an office in your local market... for example, Phoenix. Look for anyone in the Phoenix office with a title related to asset management, REO, distressed assets, FDIC, etc. If you find two or three potential contacts there, you now have 4-5 potential networking contacts vs. just one from the primary list. Repeat this for all the companies in your primary groups and soon you'll have 100-200 names on your spreadsheet. Note: make sure you capture the following for each contact: name, company, title, mailing address, email address and phone.

Step 3: Send each an email but don't attach a resume

Emails with attachments from unknown senders tend to get sidetracked by spam filters. You want to share the key details of your experience quickly and simply, without the need to open an attachment. Hence, we present the "Blackberry resume". It's clear, concise and can be easily read on a smartphone. Best of all, it's almost impossible to miss the keywords which really matter. Here's an example:

John... please keep me in mind if your future needs require a Phoenix based real estate finance professional. A brief summary of my experience:

• VP Finance- Gables Residential, a nationally recognized multifamily REIT
• VP Investments- Brookstone Capital, debt and equity partnerships for real estate projects
• Sr. Analyst- Deloitte & Touche, specialization in real estate and manufacturing

• BSBA- University of Arizona
• MBA- Arizona State University
• Licensed Real Estate Agent, Arizona

I'd be happy to forward a complete resume if you're interested. I'm available on a contract or full time basis. Thanks in advance for your consideration.

Bill Smith

bill.smith@anywhere.com

602-333-5555

Step 4: If you don't receive an email reply, send a resume by mail one week later

Your mail follow-up should include a cover letter that is virtually identical to the one above; the only change would be to the closing paragraph ("I've attached a complete resume..."). Resist the urge to ramble or write something longer; it will do more harm than good. The cover letter needs to clearly define who you are, what you do and where. Keep it short and sweet for maximum impact. The goal is to detail your experience in as few words as possible.

Lessons Learned in the Search Business

We've learned our fair share of lessons after 25 years in the search business. Some were learned the hard way, many times more than once. Save yourself time and trouble by heeding these tips.

• The best indicator of future performance is present & past performance. The shrinks refer to it as direct behavioral observations. We call it the Duck Theory: “If it walks like a duck...”

• Direct observations are better than inferred ones. The fact that John describes himself as a “people person” is encouraging. However, if he frequently slams his co-workers and supervisors during the interview process, it’s probably not true.

• “How did...” trumps “How would...” Hypothetical questions tell you what a candidate might do, whereas behavioral questions... focused on past actions... yield what they actually did. One is fiction until proven to be fact; the other is just plain fact.

• Recency, Recency, Recency. Like the adage "location, location, location" the best history is recent history. What someone did five years ago is less important than what they did last year.

• Rarely is anyone as good or bad as we think they are. Also known as the “divide by two...or three” rule.

• Everyone has hot-buttons which skew their objectivity, i.e. the attributes we like to see in people. Recognizing yours will help maintain objectivity.

• Never make a hire / no hire decision based on any one thing, whether it is an accomplishment or failure, praise or criticism, good or bad reference.

• If you don’t know what you are looking for, how will you know when you find it? The better you define what success should look like in a position, the easier it will be to assess those abilities in others.

• The more comfortable both parties are during an interview, the more open and authentic each will be. That means no more trick questions or acting like an armchair psychologist. Give candidates an outline of what to expect as well as “permission” to flip a question back to you at anytime, or to ask one of their own. (Learn more in our post The Naked Interview.)
  

• The interview and hiring process should be like a courtship: it starts with Attraction (dating), evolves into Assessment (learning about each other) and concludes with Acceptance (proposal). And like a marriage, it takes Adaptability & Alignment of expectations on both sides to make it work over the long haul.

• If a candidate needs more than 24-48 hours to accept/decline an offer, then something in the prior statement was not handled correctly. An effective interview process comprises more than one visit and plenty of opportunities for both sides to learn about each other. The decision should be pretty clear by the time an offer is made. Taking longer than a day or two will not make the decision any clearer or easier. Imagine proposing to your spouse and hearing “I really appreciate the offer. Do you mind if I take the weekend to think it over and get back with you?”

• Counter Offers tend to be short-lived solutions. Case in point: employee resigns in order to pursue another opportunity. Employer offers him a raise, bonus or promotion to entice him/her to stay, but never forgets how the employee leveraged the situation to his/her advantage. The relationship is never the same. It’s also a poor way to go about getting a raise or promotion. Historically, the relationship sours within twelve months and the statistics bear this out.

FDIC Employment & Acquisition Opportunities

Similar to the RTC days, the best avenue for real estate professionals to secure gainful employment in the near future might be with the FDIC. To date, the Fed has given banks a long leash to curtail an onslaught of failures; hence, the "extend and pretend", "pray and delay" monikers. As the economy shows signs of strength, the Fed will begin flexing it's regulatory muscles and require banks to address the deals they've been nursemaiding for so long.

Until those assets are re-traded, no one knows for sure what the total impact will be. However, when you consider there's an additional $2 trillion of commercial real estate debt due to reset between 2011-2013, half of which is valued less than what is owed, it doesn't look good. Clearly, the FDIC is faced with becoming the largest REO owner and employer in the nation. So, if you're in the job market or looking to acquire real estate assets at great prices, get ready.

The Hiring Side- "We've Only Just Begun"

The FDIC is hiring. And, like the old Carpenters' hit, it's just the beginning. In addition to the FDIC, there are the 100+ third party contractors (known as RAC's) who have contracts to support the FDIC's asset management and disposition activities. Many of them will need specialized talent, too. Some of the candidates will come from banking, some from real estate, some from other industries altogether. To see a complete list of third party firms by industry segment, check out the FDIC Receivership Assistance Contractor list.

Applying to the FDIC for an opening is no slam dunk. A separate online application must be completed for each position. Don’t make the mistake of applying for one position thinking the FDIC will consider it for other openings, regardless how similar they might appear. You must submit a separate application for each position of interest. It’s time consuming, but necessary. Some tips on completing the applications:

• The FDIC uses a scoring system to determine fit with a position. It is important that the language in your resume and the your answers on the application match as closely as possible to the job description. For example, if the job description requires “entitlement” experience but you use the term "approvals" in your resume, it may not receive as high a score. Certainly, don't embellish; just make sure you’re speaking the same language. This might mean rewriting your resume to better match the each opportunity.
• A background check will be required on each application as well, but you can copy and paste much of the information to speed the process up. Park the answers (in order) on a separate document as you complete the first application, the go back to it on additional applications.
• If you have any prior experience with the RTC, banks or federally approved workout firms (RAC's), be sure to note that; it is considered a huge plus. Again, don’t assume the folks at the FDIC will recognize a company’s name and draw the right conclusion; instead, spell out the relationship, duties or role. Learn more about the application process.

The interview process itself is rather impersonal. Once your application has been approved for consideration, a brief phone interview is conducted with someone at the FDIC. Assuming the visit goes well, a conditional offer is made subject to final approval and completion of your background check. Don’t be surprised if you are formally hired before you ever meet the person who will be your supervisor.

Good news on compensation: the FDIC is paying market rates. Depending on the position applied for, qualifications and compensation history, the base salaries can range from $100-175k, plus bonus incentives and/or overtime. Each position has a defined compensation range (e.g. $105-125K). The initial offer will always be made at the lowest number; however, if payroll history is supplied demonstrating you are accustomed to making more than the low end, the local office has the option of increasing the offer by up to 25%

FDIC Careers posts positions currently available directly with FDIC offices nationally. Click on View All Vacancies to see the full gamut of needs. To search opportunities with both the FDIC and it's approved contractors, go to Indeed.com. Enter FDIC in What field and City or State in the Where fields.

The Buy Side: Acquiring Assets

The FDIC has a history of selling their assets at 94% of appraised value regardless of what the previous value of the asset was. Obviously, the key driver in the deal will be the appraisal. Given recent challenges in quantifying property values, this could be deal breaker for either side.

FDIClistings.com is a good site to start looking for potential deals. Prescient and the other asset managers have more than 1000 brokers that will list assets on behalf of the FDIC so look through local channels as well.

The Roseview Group works on various bank assets prior to the FDIC getting their hands on a bank. When they dispose of assets, they are interested in the following from a buyer: surety of execution, a desire not to be re-traded, an interest in not being nickel and dimed, a buyer that has a target asset in mind, and someone that will purchase without reps and warranties.

Asking for a list of all assets "for sale" is usually ignored. The RAC's get thousands of tire kickers and they ignore most of them. The surest way to get their attention is to have one troubled asset acquisition under your belt, and a specific new acquisition target or pool in mind.

NOTE: We'll continue to update this post with additional information so be sure and check back.

The Naked Interview

The next time you enter the interview arena– as a hiring manager or candidate– you might want to try getting naked first. OK, not in the literal sense but as described in the business bestseller “Getting Naked”, by Patrick Lencioni. Lencioni’s book addresses the three things that tend to sabotage client loyalty:

1. Fear of losing the business
2. Fear of being embarrassed
3. Fear of looking inferior

The solution: using transparency and authenticity as the foundation for consulting or selling environment– or, as Lencioni says "getting naked". No more posing, posturing or saying “the right things” in order to make the sale. His recommendation is to focus on understanding a client’s needs, helping them find solutions and speaking the truth – even when it might put the relationship at risk.

The book affirmed something we’ve felt is wrong with the interview methods many companies rely on. See if this sounds familiar:

• A candidate is invited to interview with a company. Other than knowing the position to be filled and essential requirements of the job, nothing more is shared in advance. The candidate is expected to enter the interview arena “blind,” hoping for the best and speculating on what might be asked.
• The interview itself is largely a pop-quiz process with the company representative asking the questions, the candidate answering.
• The candidate leaves the interview clueless on how well he/she might fit the position.
• On the way home, the candidate invariably thinks of answers – if only they'd had more time to think about it.

That last point is especially true of behavioral interviews, where candidates face questions beginning with “Tell me about a time when...” and, for whatever reasons, none of the best answers spring to mind. Too much is left to spontaneous discovery. As a result, both parties potentially lose: candidates fail to share their best experiences and companies miss an opportunity to learn about the candidate.

Our solution is contrary to most interview formats. Borrowing from Lencioni’s theme, we call it the “Naked Interview.” It’s purpose is to conduct the interview in a more transparent manner. No pop quizzes. No trick questions. No trying to see how candidates react under pressure situations. In fact, we suggest giving candidates an outline of the interview in advance, including the top two or three objectives for this position. Here’s how it might play out...

The Naked Interview

Acme Manufacturing is interviewing candidates for a VP Sales for their East Coast Region. The the top objectives for the new RVP Sales in his/her first year of employment:

• Help select and implement a new CRM program.
• Identify and assess expansion into three new markets.
• Assess the abilities of the incumbent sales team and determine if and where changes should be made.

Dan Smith, a Regional Sales Manager with another company, is one of the candidates being considered. A few days before the interview Dan receives this call:

“Dan, this is Bill Jones at Acme Manufacturing. We’re looking forward to meeting with you and want to give you a heads-up on some key things we want to discuss our time together. Besides the typical sales management duties, we have three overriding objectives we need this person to accomplish in his/her first year in the role:

1. The first involves CRM programs. We want to spend some time talking about your experience with CRM programs, what’s worked and not worked, etc.

2. Second, we want to investigate expanding our services into some new markets. So, any experience you have with identifying new markets. assessing their potential and supervising the start up operations will be of interest to us.

3. Third, we’re not sure if our sales team needs upgrading or simply better training. Therefore, we’ll want gain a solid understanding of your experience in terms of hiring, training and assessing sales teams.

4. Last, I want to reserve some time to answer questions you might have. Give some thought to that and send me your questions in advance of our meeting. I want to make sure I’m prepared to answer them thoroughly.”

Can you see how this strategy might reduce stress on both sides of the interview table? The candidate enters the interview arena looking forward to the visit, not anxious. And, the hiring manager has a much better opportunity to understand the candidate's experience as it pertains to their key objectives.

Traditionalists might say this gives the candidate too much information on the front end, raising the potential for researched or canned answers. However, since we’re basing the discussion on “real time” experience... i.e. the candidate’s past experiences... it is consistent with behavioral interviewing practices. And, drilling down on each topic will ferret out puffed-up answers. Look at the number of questions we can spin the CRM discussion topic alone:

• Was the program in place when you started or implemented afterwards?
• If after, were you part of the selection or design team? Walk us through that process. How long did it take to implement? What were the challenges?
• Is it better to buy an off-the-shelf program or develop from scratch, and why?
• What impact did having a CRM program make? How were you able to quantify the value?

Let’s face it, ask enough questions about any single topic and the truth will rise to the surface soon enough. A candidate’s direct experience and knowledge will become readily apparent.

Appropriate for Candidates, too!

Candidates can steer this process too, although to a lesser degree. If you find yourself headed to an interview, ask the hiring manager to describe the top two or three objectives for the new hire in the first year of employment. Then, be prepared to make comparisons to your own experience and how it speaks to those objectives. Or, ask what he/she most wants to learn about you in your time together. Either way, this will go a long way to enhance the interview experience for both parties.