Diversify Your Practice Valuation Consulting A Primer: Diversify Your Practice Through Consulting P. Barton DeLacy, MAI, AI-GRS, CRE, FRICS DeLacy O’Dwyer Realty Advisors DeLacyConsulting.com

Past as Prologue: 40 years of practice: began as residential appraiser trainee at a savings & loan Commercial fee appraiser, firm owner 15 years in Portland, OR Corporate side, 15 years : Big 6 accounting firm Cushman & Wakefield, CBRE Moved to Chicago 10 years ago Founded valuation consulting firm 2013 Projects in 15-20 states every year Specialties include Green Energy and Municipal Valuation Clients include lawyers, property owners, estates, developers Seldom work for banks No staff but work collaboratively with others

Learning Objectives: Explore 3 ways to build a better Business Model (beyond banks and AMCs) Grow your competencies –expand client base Phase your engagements Charge for your time, like other professionals

Growing Competency: Our core skill set is valuation. We are valuers. “Appraiser” while synonymous, pigeon-holes too many of us. We are not template jockeys What are our prized attributes? USPAP defines an appraiser as one who delivers valuation services in a manner that is Competent Independent Impartial Objective

Growing Competency: These attributes necessary for asset based lending, but what else? Are these talents leverageable? These services are by no means the exclusive domain of the MAIs or Cert. Gens. Residential Appraisers can be Valuation Counselors as well

Growing Competency: Who is your client and what do they need? Valuation counsel might include? Residential issues, consider: Staging impacts on sale price? Home remodeling, what adds value? Pricing, timing strategies The white elephant question- what about: the obsolete? the redundant? the vacant?

Growing Competency: Consider Valuation Counsel. Simply: advice about value. Not just what is the number,…. but: Ask the so what question? Why is the value important? Connect the dots How will it be used? Who wants to know?

Growing Competency: How you approach a problem to be solved is where you gain competence.   USPAP says define the “appraisal problem.’ Why not just “define the problem.” Maybe the client does not need an appraisal What does the client really need? A valuation-based question not the same as an appraisal request

Growing Competency: Apply those attributes of the valuer to help resolve your client’s pain: independence, impartiality and objectivity with your market knowledge. Do your homework and leverage your experience and judgment to solve a problem

Growing Competency: Remember, you need not be confined by geography, property type or complexity. You are a valuer first. Every property is unique. The client needs your methodical approach. Do your homework- research will identify: Data and comparables Economic trends Associated professionals knowledgeable in a particular market sector

Expand Your Client Base: So who might ask these questions? (hint: some might call them clients) Property owners Their lawyers Their accountants Their relatives (or heirs, or ex-spouses, or creditors…) Property managers (or tenants)

Expand Your Client Base: What are the Valuation Counsel Services you might offer? Litigation support (does not necessarily entail testimony) Impact studies (often necessary for zone changes) Market rent analysis Property tax counsel Due diligence (prior to a sale)

Phase your Engagements When applicable: Disputes of any sort Feasibility Tax Appeals Due diligence What if?

Phase your Engagements Phase I: Diagnostic stage Test client claim collect a retainer inspect, review, analyze data Communicate findings Phase II: Write draft report (flat fee, hourly) Phase III: Go on the meter Follow-up phone calls, meetings Depositions Expert testimony

Phase your Engagements How to get engaged? Letter of engagement: Include your understanding of “appraisal problem” State proposed Scope of Work Describe deliverable Identify fee agreement Identify hourly rates Attach signature page Execute via email

Consulting Deliverables Oral or written report Recite scope of work: What were you asked to do? Describe what you did What were your findings? Conditions Range of values Any Recommendations?

Letter of Engagement

Letter of Engagement

Letter of Engagement

Charge for your Time: Protocols: Fixed fee v. hourly v. contingent When to charge for developing scope Contract language: alert client on charges for post draft revisions and consulting Make fees earned on receipt of drafts

Charge for your Time:

FINIS: QUESTIONS? pbdelacy@delacycre.com 312-670-1518 503-319-8086 P. Barton DeLacy, MAI, CRE, FRICS DeLacyConsulting.com