Slow is Smooth, Smooth is Fast
“Slow is smooth, smooth is fast.”
I first heard this mantra from the 2007 film “Shooter” with Mark Wahlberg, who was talking about moving a sniper rifle barrel slowly in order to set up an accurate shot quickly. Apparently the phrase does have real military origins in the Navy Seals, but they use it to describe their movement as a group, rather than the speed of their gun nozzle.
I’ve learned over time, though, that this counter-intuitive principle of turning slow, controlled motion into operational speed extends wider than a military skirmish context. There are many things in life that require you to slow down and aim precisely in order to achieve your end objective more quickly.
One of those activities where this principle applies well is commercial real estate dealmaking. Having seen thousands of transactions and people operating in the business, it’s apparent to me that the application of this principle is a point of separation between the average player and the true professional.
Smooth underwriting = fast quotes (and offers)
Whether you are a broker trying to market the sale of a property, or a borrower hoping for loan quotes, the more prepared you are with a clear underwriting to present to potential investors or lenders, the easier you make it for them to make you an offer. So the speed to accurate quotes here really does correlate to preparation time for your numbers and the story that makes sense of them.
For a simple transaction, the process of preparing for offers or quotes can happen very quickly, but the more complex or “hairy” a transaction gets, the more work it takes to make the underwriting clear. Collecting relevant data and synthesizing the deal story is how you Aim in this scenario, and how you make it easy for counterparties to work quickly.
The less clear the initial presentation of a deal’s underwriting is, the more questions will be required by counterparties in order to properly size and respond with a quote or offer.
Smooth preparation = fast negotiation
Commercial real estate deals rarely consummate exactly as first offered. The best few bids or loan quotes are typically chosen and then negotiated to a place where all parties feel satisfied that they are taking the best deal offered to them with the right deal counterparty (lender, buyer, etc).
Negotiations can be painstaking when new information is dripped out from a seller, or if a borrower keeps shopping and shopping and shopping more lenders, rather than going to all the logical ones upfront and then narrowing down to the most competitive. CRE professionals know another old adage, which is that “time kills all deals”. Therefore keeping the negotiation period to a shorter period of time is beneficial. Keeping the negotiations short is impossible without going slow enough through the details to ensure a smooth negotiation process.
Smooth organization = fast closing
Due diligence and closing checklists can get pretty gnarly for a commercial real estate deal. There’s inevitably many documents that need to be collected for formal loan approval to go through, especially if you’re seeking a loan from a bank or another regulated institution. Some of these documents will be deal-specific, but many are things that can be organized and ready to go ahead of time, like incorporation documents for legal entities, an updated Schedule of Real Estate Owned, tax returns, organizational charts, and other commonly requested items.
The more organized you are ahead of time, the faster a closing can take place.
Smooth process = fast business development
Going slow enough to develop a reliable process (rather than rushing through a sub-optimal process) is ultimately how you scale from speeding up one transaction to allowing many to get done. If instead of working on transactions, you’re running a team that runs transactions, outlining steps and expectations for how your team operates becomes the way to ensure a smooth operation including the steps above (underwriting, negotiation, and organization).
This really doesn’t happen naturally in an organization. Entropy, a scientific principle that posits natural processes lead to increasing amounts of disorder gradually over time, also affects businesses. If you don’t work to create order, disorder arises.
If your eyes are glazing over comparing commercial real estate to thermodynamics, think about it this way instead: to create a smooth process, you need to step out of working in the business to working on the business. It’s the only way to create a system that will be smooth when other people are working inside it. And it’s the only way to scale beyond being a single star player.
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