International Real Estate Investors - A Growing Opportunity for Your Business

1. International Real Estate Investors – A growing Source of New Clients Don Pasek, CIPS, TRC Omniterra Real Properties, Chicago

2. Volume • Increasing number of transactions in the USA involve international investors • 24% increase 2010-2011 • Approximately 1 of 12 transactions involve foreigners • Total 2011 Sales: $1.07T • 2011 Sales to Foreigners: $82B • 50% “green card” holders • 50% non-permanent residents International Real Estate Investors - A Growing Source of New Clients Why Seek Out International Investors? Source: NAR Profile of International Home Buying Activity 2011

3. International Real Estate Investors - A Growing Source of New Clients Why Seek Out International Investors? Source: NAR Profile of International Home Buying Activity 2011

4. Intent • “A” clients • Know what they want, what they can spend • Have geographic area identified International Real Estate Investors - A Growing Source of New Clients Why Seek Out International Investors? Source: NAR Profile of International Home Buying Activity 2011

5. High Liquidity • Most buyers use all-cash to make purchase • 62% of purchases cash only • 36% with mortgage financing • 2% not known (?) • Typical sale price is higher than median • Median all U.S. = $170K • Median foreign investor = $200K • 26% of all foreign investor sales over $400K International Real Estate Investors - A Growing Source of New Clients Why Seek Out International Investors? Source: NAR Profile of International Home Buying Activity 2011

6. Current Clientele: Your BFF for FII • Referrals • Do your current clients know that you practice internationally? • Home-country connections • Are any of your current clients recent immigrants? • Second generation? • Business Interests? International Real Estate Investors - A Growing Source of New Clients Finding International Investors

7. USofA: We Speak Your Language, Pardner! • 17.89% of Americans speak a foreign language • Top 10 Foreign Languages Spoken in the USA • Spanish/Spanish Creole (28.1M) • Chinese (2M) • French (1.6M) • German (1.4M) • Tagalog (1.2M) • Vietnamese (1M) • Italian (1M) • Korean (0.89M) • Russian (0.70M) • Polish (0.67M) International Real Estate Investors - A Growing Source of New Clients Finding International Investors Source: 2010 U.S. Census Data, Tabulated by NAR

8. Illinois: Land of Linguae • 19.23% of Illinoisans speak a foreign language • Top languages in Illinois (NAR Compilation of 2010 Census): • Spanish/Spanish Creole (1.25M) • Polish (185K) • Chinese (65K) • German (63K) • Tagalog (62K) • Italian (52K) • Korean (44K) • Greek (40K) • French (40K) • Russian (38K) • Arabic (35K) • Urdu (32K) International Real Estate Investors - A Growing Source of New Clients Finding International Investors Source: 2010 U.S. Census Data, Tabulated by NAR

9. Professional Networks: Strength in Numbers • CIPS Network • Over 2,000 CIPS Brokers Worldwide • 55 in Illinois • Local Association Network • Does your association have an International Section? • Global Real Estate Forum (CAR) • Chambers of Commerce • Neighborhood Chambers • Ethnic Chambers • Regional Chambers/Business Development Authorities International Real Estate Investors - A Growing Source of New Clients Finding International Investors

10. Overseas Partners: Go to the Source • Consulates/Embassies • Have you met the Commercial Consul? • Have you met the Cultural Attaché? • Overseas Real Estate Associations • NAR Network • Global Alliances – more than 60 national associations • President’s Liaisons/Gateway Associations • Local Overseas Associations • Trade Missions – Host or Participate • Mentoring International Real Estate Investors - A Growing Source of New Clients Finding International Investors

11. How does culture affect business decisions? • Decision-making styles • Risk-taking or risk-averse culture • Individual or group decision-making style • Opinion leader (vs. decision-maker) • Attitudes toward real property • Permanent or temporary • Family, investment, or business necessity • Perceived appropriateness for intended purpose International Real Estate Investors - A Growing Source of New Clients Investor Culture and Real Estate

12. Create an environment of tolerance • My way or the highway? NO WAY! • Awareness and sensitivity • Accept that there is no one “right” way • Understand and respect cultural norms • Lead clients using their frame of reference • Patience, respect, and support • Time may not be of the essence • Form over function – indication of respect • Mutual learning, mutual benefit International Real Estate Investors - A Growing Source of New Clients Investor Culture and Real Estate

13. Outline the process • Communicate clearly • Simple vocabulary, avoid jargon, idioms • Recognize possible alternate definitions • Use reference points based on home culture • Create a timeline • Establish order of events • Identify milestones to closing • Balance certainty/uncertainty (mortgage, inspections, etc.) • Handle objections sensibly • Sympathy, acceptance, validation • Mutual, cooperative resolution International Real Estate Investors - A Growing Source of New Clients Managing Client Expectations 13

14. Carrying the transaction to closing • Keep the client informed – create a contact schedule • Be aware of potential pitfalls, roadblocks • Be prepared to provide direct assistance if necessary • Closing Day • Attend the entire closing! • Prepare the client to close (documentation, etc.) • Assist with explanations, misunderstandings International Real Estate Investors - A Growing Source of New Clients Managing Client Expectatons

15. Solidify the relationship • Transactional vs. relationship broker (“Podolsky decision”) • What will your client say about you post-closing? • Will your client return or refer others? • Recognize additional business opportunities • Property tax reductions, payments • Management services (maintenance, leasing, etc.) • Additional real property investments International Real Estate Investors - A Growing Source of New Clients Post-Closing Action

16. Country of origin: Poland • Transaction Facts: • Type of purchase: Residential Condo • Number of purchasers: 2 (husband/wife) • Location: Chicago Loop • Transaction Closing: January 2012 • Prior client experience in USA • Husband studied in summer school at UIC • Both travel frequently to the USA • Both have business contacts in USA • Primary purpose: personal use, later rental • Daughter currently studies at UIC • Seeking less expensive alternative to dorm/hotel • Want good return after daughter finishes school International Real Estate Investors - A Growing Source of New Clients Case Study: Inbound Transaction

17. Issues: • Location near UIC, but also near Loop • Investment value: adequate return after renovation • Parking • Money transfer PL to USA • Resolutions: • Location: South Loop • Predicted return at current rental rate: 11.2% • Arranged zoned parking permit at City Hall • Arranged bank transfer via Citibank • Outcome: Transaction Closed International Real Estate Investors - A Growing Source of New Clients Case Study: Inbound Transaction

18. Country: Poland • Transaction Facts: • Type of transaction: Single family home inheritance/sale • Number of sellers: 1 • Location: Near Jelenia Góra, (Silesia) • Transaction Date: TBD • Prior client experience with Poland • Emigrated post-WWII • Has no family in Poland, wife/daughter in USA • Primary purpose: liquidation of asset • Client does not plan to return to Poland (96 years old) • No family members remain • Would like to use funds for family in USA Case Study: Outbound Transaction

19. Issues: • Verification of ownership by brother of deceased • Remote location • Interim protection of property • Resolutions: • Assistance in finding capable legal advice in PL • Referral to Association-member broker • Assistance in obtaining, providing documentation proving relationship to deceased • Outcome: Pending International Real Estate Investors - A Growing Source of New Clients Case Study: Outbound Transaction

20. International transactions are increasing in USA • Find clients using familiar, traditional methods • Make contact with international organizations, representatives • Recognize culture as a factor in real estate investment • Adapt practice to the client’s cultural needs • Manage client expectations • Offer post-closing assistance International Real Estate Investors - A Growing Source of New Clients Summary

21. Don Pasek, CIPS, TRC Omniterra Real Properties, Chicago dpasek@omniterrarp.com Thank You!