How to save $100,000 on your building project
Bruce Jay, a one-time bank owner, had taken his pets to Dr. Ulrich for nearly 20 years. Along the way he sold the bank and shifted into the commercial real estate realm, carving out a niche helping real estate clients find the best ways to obtain financing. He also used his banking-industry connections and negotiation skills to put together good deals for his customers. So naturally, when it came time for Dr. Ulrich to build a new hospital, he turned to Jay—and became his client’s client.
Jay put together a budget for Dr. Ulrich and his team using three years’ worth of personal and practice financial information. Once they were far enough along in the design phase to estimate costs on the project, Jay crafted a proposal and shopped it around to several financing sources, including local banks.
Dr. Ulrich put 15 percent down, financed 35 percent of the project with a Small Business Administration loan, and covered the rest with financing from his local bank. “The banker we had used for 15 years came back with the best offer, as we had hoped,” Dr. Ulrich says. In the end, Jay’s expertise helped Dr. Ulrich and his colleagues save an estimated $70,000 to $110,000 in extra interest rates and fees. “I know he negotiated a better deal than we could have because of his knowledge of local bankers and contractors,” Dr. Ulrich says. “He did the work, made sure files were correct, and had the right information. He saved me a lot of time and money, even after we paid him his small fee.”
What can you do?
You may not know a banker-turned-commercial-real-estate-agent, mostly because there aren’t that many out there. But you too can benefit from Dr. Ulrich’s experience. Here’s how:
Stick to what you know. Don’t hesitate to hire people who know the business world. Doing so will save you time and money, not to mention headaches. “Dr. Ulrich recognized that he’s a veterinarian, not a banker, architect, loan broker, or real estate agent,” Jay says. “He sought out the best resources available for the components of his project.”
In Jay’s experience, doctors who are used to doing everything on their own often think building a practice is no different. But when they take on too much, the practice or the building project suffers. “There’s no reason to do it yourself when there are plenty of resources available to smooth the process for you,” he says.
Lean on connections. As the adage goes, it’s not what you know but who you know. Both are important when building smart. Use your business connections—you never know which one of them will help you find a better deal. Dr. Ulrich hired a client; the client had ties to commercial real estate, banking, and building contractors. These relationships are invaluable.
Do your research. “Because of my unusual background, I was a couple of professionals rolled into one,” Jay says. “But if you wanted to duplicate this experience, you’d most likely hire a commercial real estate agent, a loan broker, and a business consultant.” His advice is to make sure to check references for each to make sure they’re working with your best interest at heart.