Valcre in Music City! The Appraisal Institute 2018 Annual Conference

Valcre Team at the AI Conference

Early this August, the Appraisal Institute’s 2018 Annual Conference came to an end in Nashville Tennessee and the Valcre team enjoyed their experience participating in this inspiring and collaborative event. The unrivaled attraction of Music City was a draw both inside and outside the event for attendees with days filled with informative sessions and evenings filled with honkytonks and networking with peers.

As a Gold Record Sponsor, the Valcre team would like to thank everyone who attended. It was enjoyable speaking to everyone who visited the booth in the exhibit hall. Attendees were able to see live demonstrations of Valcre's all-in-one commercial real estate appraisal solution and meet the team in person.

At the booth, a new tool was introduced to those interested in getting hands-on experience with Valcre’s intuitive software, and that tool is now available for free at https://www.valcre.com/free.

The Valcre team is addressing the growing challenges on the horizon head-on, by redefining commercial real estate appraisals with a modern way to run an appraisal firm by providing tools that allow appraisal firms of all sizes to evolve alongside technology instead of being left behind. Schedule your own live demonstration and see for yourself how Valcre can help your business grow.

The Appraisal Institute's 2018 Conference is in Nashville!

Downtown Nashville

We are less than two weeks away from the Appraisal Institute’s 2018 Annual Conference in Nashville Tennessee, for which Valcre is proud to be a Gold Record Sponsor. It is the premier annual event for real estate valuation professionals, and this year’s conference, hosted by Music City itself, promises not to disappoint. Nashville’s rise as a destination hotspot for music, cuisine, and southern charm means there will be just as much to see outside the event when the conference sessions end. Inside the event, you will be sure to see coverage of top-of-mind regulatory, economic, and technological trends at work in increasingly volatile commercial real estate markets.

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Come visit Team Valcre at our booth!

If you want to witness technology truly redefining commercial real estate appraisal, be sure to come by the Valcre booth while you are at the conference. We will be conducting live demonstrations and providing a hands-on experience of our industry-leading Software as a Service (SaaS) platform that offers efficiencies and production volumes previously only achievable at national firms. Learn how you can use Valcre to expand the production capacity of appraisers and increase billings.

FREE Regional Analysis Tool!

For those visiting our booth, we will be giving away a new free Regional Unemployment & Employment Data Analysis Tool to help you with your appraisal report writing even if you arent a Valcre customer yet. We will also have Valcre swag including hats, guitar picks, pens, and other fare, that you won’t want to miss. The new tool will graph the unemployment rate over the trailing 18 months and over the last 10 years for National, Regional, State, MSA, and County levels for all US states, D.C., and Puerto Rico. Also included is a table to show employment rates for the last 10 years at the State, MSA, and County levels. The data is always as up to date as possible, pulling directly from the www.bls.gov website.

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It's an efficient way to include unemployment or employment graphs and tables in any report that uses the data to help demonstrate the purpose of the report and its findings. Efficiency and productivity are critical to the success of today's commercial real estate appraiser. Learn how the efficiencies of using Valcre add up, allowing appraisers to avoid wasting valuable time and administrative resources, and focus on appraising. Valcre leverages a super-efficient system to create higher quality reports and increase the production capacity of every appraiser.

Stop by our booth (Number 111) in the Exhibit Hall at the 2018 Annual Conference in Nashville to learn more, and schedule a one-one-one demo to see how we can help your business grow.

5 Critical Components of an Appraisal Platform that Appraisers Can Not Live Without!

Efficiency and productivity are critical to the successful survival of today’s commercial real estate appraiser. At the same time, technology innovation in the commercial real estate (CRE) space has lagged relative to other industries. CRE appraisers simply can’t afford lost time experimenting with cobbled-together upgrades wedged into an outdated infrastructure. As Software as a Service (SaaS) providers enter the commercial real estate industry, an all-in-one CRE appraisal platform can offer firms of all sizes increased efficiencies and production volumes previously only achievable at national firms.

What are the key components essential to evaluating an all-in-one CRE appraisal platform?

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1. One Place, Accessible Anywhere

First, it is fundamental to have a cloud-based solution available from anywhere for all stages of the appraisal workflow, from intake to invoice. The platform must provide a scalable, easily-searchable, database of all your key data, including sales, leases, surveys, and income/expense comparables. Intuitive dashboards should be included for quick access to the job status of every appraisal, with all the important information at your fingertips. Additionally, one-click professional service agreements and invoicing with hassle-free tracking of accounts receivables are must-haves to fully leverage efficiencies and production gains. 

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2. Seamless Integration

Fully-integrated, customizable, branded, and USPAP-compliant Excel and Word templates should be provided. One-click importing of property information, comparables, and market data into the valuation template should be standard. Synchronizing charts and text into the appraisal template must be efficient and effortless. Mapping subject and comparable properties should be built in and automatic. Efficiencies add up, allowing appraisers to avoid wasting valuable time and administrative resources, and focus on appraising.

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3. Privacy and Security

Privacy and security of data in the cloud are critical today, especially for CRE appraisers who are in possession of sensitive client data. Any SaaS provider should be transparent about how your data is being secured and protected. They should be providing strong encryption, following globally accepted certifications and standards for data protection policies and controls, and have geo-redundant backups stored in multiple locations. Your data should always be protected, secure, and available – and visible only to the people you choose.

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4. Training and Support

The availability of training and support are crucial to the success of any software implementation, and are a measure of a provider’s commitment to you and your success. Time-strapped CRE appraisers are continually extracting efficiencies from their tools to increase productivity and require unlimited ongoing support to be included with their software investment, free of charge.

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5. Outsourcing Tech Trend

Following the playbook from other industries, commercial real estate firms are outsourcing technology to experts, rather than trying to accel in both tech and CRE. Besides the headache being offloaded, there are efficiencies and productivity gains offered by all-in-one solutions, especially for CRE appraisers, if the right provider is chosen. A cloud-based SaaS platform offers a largely turnkey solution that saves the commitment of your own resources and significantly shortens the implementation time, by offloading the complexity of setup, customization, and maintenance to the provider.

Make Valcre Your Appraisal Platform

The right CRE appraisal platform is a complete software solution that frees appraisers from the burden of tech management. At Valcre, we built the best appraisal technology platform supporting all stages of the appraisal workflow. Our cloud-based database stores your data centrally and securely, and gives you complete access, anywhere and anytime. Easily keep track of jobs, clients, properties, sales, leases and expenses. Our robust search and mapping functionality let you find the data you need, when you need it.

Whether you are a solo appraiser or a large firm with many appraisers, assistants, and administrators in multiple offices, keeping your data up to date takes just minutes. With everything organized in one place: your appraisals, files, job due date calendar, comparables, clients, and much more – everyone has a lot more time to focus on what’s important – appraising.

What used to only be available to large firms with huge technology budgets, is now available to everyone – with ease in the cloud. Our industry-leading Software as a Service (SaaS) platform provides end-to-end job tracking and invoicing, one-page data entry, fully-integrated Word and Excel templates, automated mapping, one-click datasheets and summary reports. Valcre leverages a super-efficient system to create higher quality reports and increase the production capacity of every appraiser.

How to get your MAI

By: Joe Creech, MAI

What is MAI?

The MAI (Member of the Appraisal Institute) is recognized throughout the commercial real estate (CRE) industry as the top designation that can be achieved for a commercial real estate appraiser in the US. The MAI is the launching point for business careers in the commercial appraisal industry and is a base requirement to join most appraisal panels for lenders, corporations and law firms. Regardless of your career goals as a commercial appraiser, obtaining your MAI designation is a worthwhile venture. The education, resources, and prestige outweigh the costs (financial & time) spent to earn your “letters”.

One of the largest hurdles of obtaining the MAI designation is the substantial overall time commitment to get through the process. As appraisers, we spend our days looking for efficiency. Anything that takes away from producing reports is viewed as time misused. Nonetheless, it is important to recognize the benefit of investing in your long-term career goals, which should include the MAI designation. Plan on spending at minimum five years from start to finish to complete the process. Here are the main points to consider and the steps you’ll need to take.

How to get started? If you are completely new to the industry or still considering appraisal as a career path, it is important to choose a firm that will nurture your development. Larger firms tend to have training programs in place and will pay for your appraisal courses, license fees, etc. However, working at a smaller firm with a senior MAI at the helm can provide better depth of knowledge in your training through more one-on-one mentoring.

As you progress through the trainee process, you will accumulate education requirements towards your general certification license as you also complete 300 classroom hours, as outlined by the Appraisal Institute (AI). Some of your undergraduate course-work may count towards these requirements. Economics, real estate and business courses are all generally helpful but check with the AI to verify which courses (and how many hours) count towards the education requirements.

Earning a general state certified license is an important milestone in your appraisal career. At this juncture your compensation typically shoots up, you can typically perform inspections independently (for many clients) and you will be applying your signature of excellence to each appraisal report. As your name is added to more and more reports in your market, clients will begin to get a comfort level with your work, which will eventually help with creating your own book of business. In my experience, it takes about five years to establish yourself within the commercial appraisal industry.

What’s next?

After earning your state license, this is the point where pursing an MAI designation starts to make sense. This is when you contact the Appraisal Institute to request a mentor to assist in navigating the process. A mentor is a MAI in your market that is volunteering their time to help motivate you to keep moving forward towards your goal. They will also be able to answer questions, provide advice, and insights along the way. 

What are the steps? Here is a logical order to follow when completing the four basic steps to earn your MAI; (1) upper level courses, (2) comp exam, (3) demo report, and (4) experience log.

1. Upper Level Courses

Along with the classes required for your certified general state license, you will also need to complete five upper level classes to obtain your MAI. While the state-level courses are typically available through various education providers on a regular basis, with minimal travel, the upper level courses are all week-long classes and are offered only through the AI with a more sporadic schedule. It can take five years to take all the classes if you prefer not to travel.

I recommend setting up a list of the courses you need to complete and check the AI website for when they are offered near you to avoid additional delays or travel costs. Keep in mind that as these courses are all one week long and the travel costs (airfare, hotel, meals) can be as much or more than the class itself. Also, classes can fill up early so make sure you sign up as soon as the classes are announced. Note that the AI requires candidates to pass a basic Excel mastery test to qualify to take the upper level courses. This is a newer requirement but considering you have likely been appraising for at least three years to this point, you should be well-versed in Excel and this step is more of a formality.

2. Comp Exam

The comprehensive examination (comp exam) includes four separate modules. The four modules include a 1) General Concepts, 2) Cost/Highest and Best Use (HBU), 3) Sales, and 4) Income. The most taxing for most candidates tends to be the Income module. The best advice for passing this exam is to take it as closely on the heels of the Advanced Income Capitalization course as possible. Since the comp exam includes four separate modules that take information from all five of the upper level courses, it is recommended that students attend the Advanced Income class last. Although students sit for all four modules, it is possible to sit for only one module at a time. Most of the information covered in the exams will come from the upper level courses and reviewing your handbooks from each class is a great place to start studying. The Appraisal of Real Estate is an important resource as well, especially the first 150 pages (+/-). Topics covered include a broad overview of the profession and is great for the General Concepts exam. Ted Whitmer offers a popular comp exam review program, with details here: Ted Whitmer Comp Workshop.

3. Demo Report

The demonstration report (demo) has long been regarded as the most daunting portion of the process of obtaining the MAI designation. The institute completed a survey and found that a large portion of candidates wound up giving up at this point in the process. The numbers were so staggering that alternative solutions were researched. The AI website lists the seven various options available here: Appraisal Institute Demo

The most traditional method is to write a demonstration report on a property that you select. The report must include all three approaches to value (Cost, Sales, and Income) and needs to include quantifiably supported adjustments in each approach. The various requirements for the report are considerable are listed here: Appraisal Institute Demo Guidebook. Once the report is complete, a reviewer approved by the AI is engaged to grade your report. It can take a few months to get the report back and it is rare for a report to come back without comments, with candidates often required to revise certain sections. Because of the requirements of the assignment, it is highly recommended to pick a fairly homogeneous property type where adjustments can be more easily supported. Industrial or multifamily are historically the most popular choices for a demo report. A candidate can use a property they have already appraised, but only if they satisfy the USPAP requirements for confidentiality and receive permission from the client involved in the prior report. The value date cannot be more than five years from the date of submission to the Institute and cannot involve a property in litigation.

One of the most compelling alternatives is the Demo Writing Class, which has a very high success rate. Candidates are provided information on a sample property, with all the details needed to complete a demo report. Students are given a couple of months to review the materials and begin writing the report. At the end of the two months, students attend a week-long course to complete the demo under the supervision of trained instructors for the institute. At then end of the course, the reports are handed in and graded, with results available much more quickly than under previous requirements. The advantage of the new project is that appraisers spend less time researching their project and more time analyzing the data and completing the report.

4. Experience Log

Getting your hours and completing the experience log is considered the easiest and most beneficial step as it is completed within the natural course of your work. The institute currently requires proof of 4,500 hours, with a maximum of 2,000 hours in any given year. This process can therefore take anywhere from 3 to 5 years to accomplish, depending on your workload. The number of hours per job or assignment is subjective and the Institute provides tips on the process here: Appraisal Institute Exp Log Guide.

Its worth the time

The path to achieving the MAI designation is certainly not easy, but it is because the process is difficult, that the designation carries weight in the industry. MAI appraisers are recognized throughout the commercial real estate industry as highly qualified experts in valuation. The mere fact that a candidate has endured such a process speaks volumes to their dedication to their profession and the appraisal industry.

Additional Resources:

https://www.appraisalinstitute.org/assets/1/7/U.S._Appraiser_Demos_3_1_16.pdf

https://www.appraisalinstitute.org/assets/1/7/MAI-website1.pd

Valcre Team Offsite, Looking Forward to Lots of New Features in 2018

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Team Valcre just wrapped up a four-day jam session in Los Angeles hashing out the next round of features that will lead to even greater success for our commercial appraiser partners. Going into "lock-down" with an offsite allowed us to analyze and consolidate months of customer feedback that we will turn into upgrades and new features for our customers.

From day one we've listened to the needs of the market, making adjustments along the way. Our team's measure of success is continuously expanding the value proposition to our customers and their clients.

We are committed to acting as a partner in their success and will continue to strive to offer the most advanced and intuitive commercial appraisal platform on the market. That is our commitment to the CRE industry.

Thanks for your continued support!

10 Steps To Start Your Own Commercial Real Estate Appraisal Business

By: Grant Norling, MAI & Lucas Rotter 

Are you a seasoned commercial real estate appraiser that works for a larger appraisal firm?
Do you bring in your own work or have client contacts that trust your expertise?
Are you tired of giving up half of your appraisal fee (or more) to your employer?
Have you considered starting your own appraisal firm, but don’t know where to start?

If you have answered yes to these questions, the time is ripe to venture out on your own and start working for yourself. Sure, there are many hurdles to starting your own commercial real estate appraisal business and it can be a confusing process at first. Where do you start? Although there is no exact blueprint for how to start, following the insight in this article is a great way to position yourself for success.

1. Business Documents & Licenses

Whether you are starting a new appraisal business alone or with a partner, you will want to form a legal entity to protect yourself and your personal assets.

  • Business Entity – Most commercial appraisers form a Limited Liability Company (LLC). However, depending on your circumstances and state of incorporation there may be advantages to forming an S-Corp or C-corp. You should consult with an accountant for ongoing advice on your specific situation.
  • You could hire a lawyer to set up your business entity or you can do it online through a website like LegalZoom.com for as little as $150 (plus your states filing fee which can range from $40 to $612 depending on the state).
  • As an additional resource, the Small Business Administration has a good overview of the various business entity structures.
  • Federal EIN – Once you have your business entity set up you will need to get a Federal Employee Identification Number (EIN) which can be done for free in just a few minutes. It’s critical to get a Federal EIN so you can open a business bank account and file your business taxes at the end of the year. The online Federal EIN Assistant will guide you through the process by asking for your business entity details and then you will receive your Federal EIN immediately upon verification.
  • Local Business Licenses – Depending on the state and city of your new company, a business license may be required and additional taxes may apply beyond state and federal. Check your state and local municipalities to see the applicable laws and requirements. You can also consult an accountant for advice as they should have a good idea of what local regulations and taxes are for businesses.

2. Insurance

Proper insurance coverage is incredibly important in the appraisal industry. Starting your own appraisal business will require multiple types of insurance, but at a minimum, you will need the following:

  • Commercial General Liability (CGL) Insurance – Typically you need a policy that covers $1 million for each occurrence and $2 million aggregate limit. This insurance will cover costs associated with defending against third parties who claim you have caused them financial or physical harm while performing appraisal related services such as causing property damage during an inspection. Expect to pay between $400 and $800 annually for CGL Insurance.
  • Errors and Omissions (E&O) Insurance – You will need to obtain at least a $1 million professional liability policy in order to perform appraisal work for most lenders. This insurance offers coverage for lawsuits related to negligence, omissions, or errors in appraisals. Expect to pay between $600 and $1,800 annually for E&O Insurance with a high deductible, and $5,000+ annually for a policy with a lower deductible.

3. Branding

You will want your new appraisal company to have a unique and professional brand. This process has never been easier than today’s user-friendly technology driven world. Getting a logo and branding set up is critical to creating a professional image as a new company. You can find a local designer that will cost about $500-$1,500 to create a new company logo. Or there are online websites like ZillionDeisgns.com where you can launch a contest to make thousands of designers compete to create you a new logo at a cost of $199. They guarantee at least 30 different concepts will be submitted in less than seven days. You select the winner!

4. Website & Email

Now that you have a new commercial real estate appraisal company you need to create an online presence and communicate with your clients from a company email address.

  • Company Website – The quickest way to get your online website setup is to use a website builder like SquareSpace.com which has hundreds of ready-made templates and is user-friendly so you don’t have to learn how to code to get your new website setup. At a cost of less than $20 per month, you will have a professional website online and available for anyone to see. You can even register a custom website name (domain name) through Squarespace. Or you can purchase a domain name from any domain registrar like NameCheap.com for as little as $10 per year. It’s best to get a .com domain since your clients will be familiar with it and most email systems won’t automatically filter emails to spam or junk email.
  • Email – Get a business email set up with G Suite (by Google) so you look professional when sending emails to clients. The cost is $5 per user per month ($50 per user paid annually) for 30GB of storage. If you set up your website using Squarespace then G Suite email can be set up from the settings within your Squarespace page.

5. Bank Accounts

It’s important to keep your business bank accounts separate from your personal bank accounts to ensure that you don’t blur the limitations on liability. This will keep your income and expenses organized so that you can begin accepting money from your clients. When you open a business bank account you can also apply for a line of credit for the company – which can be used to purchase a new work laptop or cover job expenses until you receive payments for appraisals completed.

6. Cloud Document Backup Services

You don’t ever want to lose your data. To protect yourself from data loss, get an online cloud based backup service through Dropbox.com for as little as $99 per year per user for 1 terabyte (TB) of space. This should be more than enough space to keep all important appraisal job files safe. As a bonus, you will have access to any of your files from anywhere and any device.

7. Office Services

There are two critical utility services that need to be available and ready to start your commercial real estate appraisal business.

  • Phone Service – There are multiple options today for business phones including traditional landlines, voice over internet protocol (VOIP), and cellular phones. Selecting the right option for you will depend on how you plan to run your business, the number of employees, and costs, which can vary substantially from one carrier to another. A landline phone can be as little as $10 per month.
  • High-Speed Internet – Slow internet will zap your productivity. Whether you are working from a home office or renting space, consistent access to high-speed internet is a must. Upgrading your home internet will be a big benefit to your productivity so you aren’t waiting for pages to load or slowing down your ability to upload important appraisal files to client portals. You will want a minimum speed of 30mbps with a higher 100+mbps recommended.

8. Data Subscriptions

You are going to need to get several data subscriptions set up so you can support your appraisal reports:

  • CoStar – The number one commercial real estate data provider for property and transaction data. The major drawback is it’s a very expensive service with prices varying depending on geographic coverage and services needed. The price of the service can end up costing thousands of dollars a month depending on how many licenses you need. However, they often give discounts to appraisers so talk with your sales representative to understand your options. Realistically you should factor $300 to $600 per user monthly.
  • CompStak – This service is a database for lease and sale comparable data in major metro markets. It’s a FREE service for appraisers, brokers, and researchers. The system works based on submitting lease comparable data to earn credits; then the credits can be exchanged on other lease comparables.
  • Demographics – STDB is a great option due to its partnership with the Appraisal Institute. The annual retail fee of $1,295 is cut down to $600 annually with $695 discount through the Appraisal Institute.
  • PricewaterhouseCoopers (PWC) – This service provides national investment surveys including capitalization rates, discount rates, rent growth, and expense growth projections. The cost is $545 annually.
  • Marshall & Swift – This is the industry standard for construction and replacement cost information. This subscription will be vital for an appraiser to complete a cost approach and insurable replacement cost for appraisal assignments. Plan on spending around $600 annually for your license.

9. Office Software

The industry standard for writing appraisals is Microsoft Office. You can get the software for your business for as little as $10 per month and that will include Word and Excel – the two critical office software components. For a bit more per month ($12.50), you can get the software and your professional email set up on a custom domain (if you haven’t done this already through G Suite in #4). Gone are the days where you had to shell out $200 to $300 to use Microsoft Office. As a bonus with Microsoft 365, you can install the software on up to 5 different computers that you use.

10. Appraisal Platform

A major benefit of working for a big commercial real estate firm is their robust proprietary technology platforms that help make appraisers more efficient. However, now that you are starting your own commercial real estate appraisal business you won’t have that benefit. Or will you? We have one recommendation: Valcre. It’s truly a “turn key” commercial real estate appraisal platform that supports all stages of the appraisal workflow and integrates seamlessly with custom branded Excel and Word templates. With no startup costs and an inexpensive monthly subscription, you get access to a professional job management system, detailed comps database, customizable templates and stunning reports. It’s all secured in the cloud and available anywhere. Check out our features and schedule a demo.