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How Residential Agents Can Profit from Commercial Real Estate With Will Curtis | RARE Agent Show
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- [00:00]
A
And finding either the tools that you need or a brokerage that's going to help you provide those tools.
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B
Welcome to the Rare Agent Show. I'm Dylan Tanaka, a realtor, mentor and author. This podcast is dedicated to helping real estate agents like you close more deals so that you can live the life you always dreamed of. Every week, my guests and I share the stories, strategies and tools you need to inspire and empower you. Let's make it happen. Hey guys, we're back with another Rare Agent show. I'm your host, Dylan Tanaka. Super excited to be here today with somebody who's making some huge moves in real estate, Will Curtis. He's a commercial broker and he is going to let us know exactly what he's got planned this year that's going to make him a rare agent. Before we get started, Will, I got to ask you my favorite question. How do you take your coffee?
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A
Yeah. Well, thanks for having me. And of course I'm hot coffee, little bit of cream, little bit of sugar, 2 to 3 cups a day just to stay caffeinated, to close the those deals.
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B
Awesome. So I mentioned a little bit earlier that you are in commercial real estate and there seems to always be crossover between the, the commercial and the residential agents. So did you start out in commercial and and just walk us through your journey jumping into real estate?
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A
Yeah. So for me, getting into commercial was really dumb luck. I was in the army. We had a, our command financial specialist who's usually the guy that teaches you how to balance a checkbook and not go buy a car at 33% interest rate. All those, you know, kind of young, dumb mistakes that you make. Sat down and put on a very rich dad, poor dad, esque, here's how to invest in real estate. And sat down, it was telling us that he, as an E6 with, you know, 20 plus years of military service, was making more than what he was as a soldier. And me being a young private making little no money. I was like, well, this guy's not, not brilliant. He's not anything special. He was a normal guy and was doing well. I was like, well, maybe I could do that same thing. And that's what kind of got me interested in it. And as the military changed the GI Bill, they now were going to pay me to go to school. I was like, well, if I went and got a degree in real estate, I'll be the smartest house flipper there ever was. And I never flipped a house, so maybe I am the smartest one. Who knows? But I got in a Degree program, found a fraternity brother who had a small family run office that was investing in commercial assets and he needed somebody to answer the phones. And, you know, poor college kids, so sure started answering phones. And next thing you know, I started moving into doing commercial property management, leasing and all that. Early on, I did a little bit of residential sales. I kind of chased anything and everything that was shiny. I had a small apartment locating business as well, which was disastrous because it's a little hard to get them to, to pay. But I did residential for maybe two transactions and I think I showed a family 45 houses. Just didn't. Yeah, nothing worked right. And finally we found the house they wanted and the, the wife of the family, she turned around, she goes, I like everything about the house except for the color that's being painted. I'm like, I'll come in on Saturday and I'll paint the stupid thing. I don't care at this point. And she, no, I've seen this. The juju of the house is off. I can't, I can't buy this house. We'll have to find another one. And at that point I was like, this isn't for me. Residential is absolutely not for me. And that's when I started kind of gearing down and focusing on the commercial side of it a little bit more. So and kind of starting in property and asset management and then moving into more of a traditional brokerage role.
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B
Gotcha. Yeah. It's a different journey than I hear from, from a lot of commercial agents. First of all, I want to thank you from myself, the who, Rare Agent Nation, all of our listeners and watchers for your, for your service. If it wasn't for guys and the ladies like you in this country, we wouldn't be sitting here doing a, a podcast like this. So true appreciation from us to you and you know, talking about the, the different ways that you can, you can do real estate. It's funny because I've got a good friend and he talks about when you get started in real estate, whether that's investing, whether that's house flipping, could be commercial, like you said, underwriting apartment buildings, it's not always the thing, but it seems to be the thing that gets you to the thing. And Rich Dad, Poor dad is probably one of the most inspirational books for entrepreneurs over the last 25, 30 years because it's just helped so many people open their eyes. Not something that they typically teach us in regular school. Right. And hopefully from our generations down, we're teaching our kids to think a little Bit differently, if that's what fits for them. But that's, that's cool. There's a big difference, I think, between residential and commercial, and there's still a lot of similarities. So I, I would, I think getting started in commercial is definitely more difficult than residential because there's just less of it around. So what were the biggest challenges that you faced when you first got started?
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A
I think for me, the biggest challenge I had was really picking a specialty and trying to figure out what, what I really wanted to do. And a lot of times a lot of commercial agents will still become generalists. And the downside to becoming a generalist in a large market is that you know enough, but you're not really an expert. So then you start losing out to those who really are experts, those who can sit down and tell you backwards and forwards what's happening here, there. And I think it's sometimes a huge misconception is that, oh, I can do commercial, and it's everything. I've done more than a billion dollars in transactions. I'm an instructor for CCIM for IREM degrees, teach at college. On paper, I should be able to do every bit of commercial. I couldn't sell a hotel if I needed to. I don't know the first steps, and I think most people don't look at it that way. Commercial is commercial, but honestly, retail versus multifamily, it's. It's different. Office is different. And I think it was. Wasn't until I really sat down and started focusing, that's where I actually started getting good at my craft, understood what was going on, understood how buildings operated. And it wasn't until I finally found that specialization that I actually found that I could be good. And then I slowly branched out into other things from there. But it was finding that initial where to start, and even for me, most of it was in medical office. And very quickly I realized that me and doctors don't get along, so it probably wasn't the best client fit for me. And I shifted some of that business now to working in with hospital systems rather than individual doctors. So you can, you have areas to move, but it's not until you find that specialization that you really kind of jump ahead and find success.
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B
Yeah, I think that's a big difference between residential and commercial is being a specialist or having a niche focus. Personally, I, you know, I have my own specialty working mostly with investors, coming from the investing world for so many years. And like you said, it's very difficult to be everything to everyone, particularly in commercial so we, we've got a lot of residential agents in our, in our community. A lot of them also invest in real estate. A lot of them have, have also done multi unit, maybe not like five or, or a thousand or two thousand unit projects, but well, well over 50 to 100. What would you say for a retail residential agent who is kind of getting pulled into that commercial world? What would your, what would your advice be for them? Just getting going.
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A
So I think having realistic expectations, the very, very first thing we generally coach our new agents when they come in is that if you are focused on commercial full time and be a full time commercial practitioner, that that's a two year journey before you start making decent money. And if you have a residential business you're trying to do both, that may be a three or four year journey until you can truly replace that residential business and move full time into commercial. And I think a lot of folks don't realize that's the case. Part of it is your first six months even doing full time. Your first six months is lead generating and that's, that's all you're doing. And you're not closing your deals because you don't know anything, you don't know anybody and you're trying to build that sphere. Even if you know a lot of business owners or a lot of property owners, they're not ready to sign with you. Or why would I sign with somebody absolutely brand new that doesn't know anything? It's not like in residential or well, that's my cousin, I'm going to use my cousin because that's family. This is sometimes, you know, Hundreds, if not 100,000, if not millions of dollars that I'm not going to trust my cousin. I'm going to trust, trust somebody who knows what they're doing. And that dynamic is very different from there. I think it's really education, mentorship. There are a lot of brokerages out there who do commercial, but they don't really train, they don't mentor, they don't do all those aspects. And I think once you sit down and really dive into the education, you know, a lot of brokerage will have some education and that's great. You've got organizations like your Realtor association likely has some type of training for commercial agents, which is a good start. Then you've got folks like CCIM and those that are out there that offer some of this education that really can dive in. One of the new things CCIM rolled out within the last year or so is this introduction to commercial Real estate certificate. It's a 40 hour set of course where there's about three days of it is fully, you have to follow these steps. So it's a negotiations, it's a principles of commercial real estate and then you get to pick specializations after that. So if you want to dive into medical office, they've got a class on medical office. You want to dive into underwriting. I got a class that deep dives into underwriting and I, I like that kind of education because you get to dive in with special specialists that really understand what those aspects are. And then from there it's sitting down and finding either the tools that you need or a brokerage that's going to help you provide those tools. I think one of the biggest shocks is you know your MLS likely cost you 7 to $100 a month. Most are paying quarterly. But you know, somewhere in that 70 ish dollar range is what most MLS fees will charge you. Costar by itself is going to run you 500 plus a month and that's just to have access to it. Then you've got to market it and that could be a hundred dollars per month per listing just to start marketing those properties. It's a lot more expensive and a lot of times you're a lot more selective on those deals you pick because if it's going to sit there for two years, you're going to get paid a thousand bucks in commission. It doesn't pencil out. So I think those are some of the struggles that as you get started you've got to look at all those things really business plan this out. And I don't think you, everybody that I've met that has just kind of dabbled to try to get into commercial, either they dabbled the right way and got lucky or absolutely demolished by time. They realized they have to have all this tools, experience to do the job the right way. And you know, commercial brokers can be a little nasty where hey, why are you using that resy agent? They sell houses. You should come to a real brokerage. I mean it, it's is nasty but that's exactly what they're doing.
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B
Yeah, it's a whole different world. So I've done some crossover and certainly not a billion dollars in commercial real estate. But as soon as someone calls me and they're like, hey, so you know, I'm in metro Detroit, so we have a ton of light industrial here. The county I grew up in is where all of the job shops were back in the 80s and 90s. And there's a ton of just guys who, who own that shop, they're there on the Saturday, right, And you knock on their back door and that's how you start building those relationships for when they're going to either move up or move on, which could take 10, 20, 30 years. And I learned that from a commercial broker. That's how he cut his teeth and became one of the biggest guys, probably the biggest in my whole county for, for a small boutique brokerage. So yeah, I think in residential you can, you can relationship your way into things because let's face it, if I called you today, Will, and I'm like, hey cousin Will, it's Dylan. I need you to list my million dollar house on the lake. Can you do that for me? You might not want to, but for you to actually go through and do that transaction, it's not that tough, right? You gotta kind of fill out a little bit of paperwork, get it on the mls if we're willing to price it, right. And I'm gonna listen to you, you're like, I can sell a million dollar house with my eyes closed. Now for me to sell a million dollar building that's light industrial and you've gotta have all these different crazy things happening and they got cranes and they got all this other stuff that you know about. They come to me because I know a lot, but I don't know the right answer. I don't even know the right questions to ask. So I always refer those deals out because I'm not going to take care of that customer the right way. If it's a tear down building, it's a different story. But when to be specialized, you really need to know your craft. So I think that's a big difference between you guys in commercial and residential agents. But what would you say, what skills do you think can cross over if you are a successful or semi successful residential agent and you're serious about getting into commercial?
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A
Yeah, I think what residential agents do a thousand times better than then. I mean some of the best commercial agents, one is the idea of speed to the lead in residential. I mean it's an hour, right? If they don't call you by an hour, they're already moving on to the next agent. And it could be even that in commercial that idea is like, yeah, I'll get you on tomorrow. And it's a drastically different mindset. So the agents that we have coached through that transition and had mentored through that transition, I mean they kill it because they answer their phone and I hate to say that's all it takes to be successful in commercial. But that's the first step is really sitting down and just answering the phone and being receptive. Working when the client wants to work. Many of us that have been in commercial for a long time, 5:30 is the end of the day. I'm not going to answer the call after 5:30 unless you're a great client. And am I going to work a Saturday or Sunday? Probably not. Whereas that residential mindset of let me be there when the client needs to be, that's going to win business right then and there. The other thing I think residential agents do a whole lot better than commercial is building the relationship. So you do the client appreciation events. The residential agents will sit down and reach out. Do the Popeyes do all those things to help nurture relationships. And in commercial, I don't know if we do that nearly to the same extent. Do you send something for Christmas or end of the year? Yeah. Do you pop by? Yeah, maybe. If you're around, sure. But it's not the same thing. And we don't focus nearly as much on building that relationship as what is done in residential. And what I found, even with some of our agents, we've transitioned from residential into commercial. That's what they kill it out, is one, answering their phone and two, building that relationship where even at this point, I would take somebody who is a relationship oriented person and can build those relationships. I'll teach you the back end, commercial real estate side of stuff. If you can do that side, you'll kill it. As long as you're willing to learn. No problems with being able to kill it?
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B
No. That's awesome to hear from you. I don't talk to a lot of commercial agents, not about marketing and this stuff especially. There are agents, there's all Facebook groups about Popeyes in these. Typically it's ladies, but I'm in one of the groups and my better half helped me assemble something to go to probably like a dozen people. Because I'm. I'm a normal agent, but I'm definitely not like a normal crazy agent who's out there putting pumpkins on 500 people's porches. Right? But, but I'm telling you, like, we put these things together. I put it in this group. These people were freaking out. They want to know where I got them, the price for each one. And there, there are agents out there who are delivering hundreds of little baskets, you know, even once a month. And it's funny because it's like I said, if, if you're my cousin and I live in San Antonio. I'm like, no, no, no, my cousin's an agent, I'm listing with him. There's no chance that if I meet a guy at the gym or if you're having a coffee or having a beer with somebody that I'm going to hire a different real estate agent because like it's my cousin. And that's what happens a lot in residential where we both know in commercial, typically a man or woman who has built a multi million or deca million or 100 million dollar empire is making decisions usually based on logic and on numbers and x's and O's. But I think like you said, having that warmth probably doesn't hurt. Especially it might be some little crappy five hundred thousand dollar building. They're like, ah, give it to that new guy, Dylan, let him try. He's been knocking on our door and sending me, you know, whatever the heck it is, you know, to try to sneak in. And it's funny you say that about commercial guys. I've been friends with a lot of commercial guys my whole career and I always tell them like, you guys are so arrogant. So I don't answer the phone at night or on Sundays or Saturdays much unless it's an active client and I'm in it. You know, I'm in a different part of my business now after all these years. But yeah, I'm like, you guys have to act so cool. And I'm like, I'm the guy who bought the 80 unit apartment building. Why are you acting cooler than me? And why do you have this like $150,000 Beamer and I've got a five, you know, at the time, probably a $25,000 truck. Now every truck's 50 to start, but it's a different error that you have to carry. And again, if we're going to sit down with a, with a person or a hospital or a corporation, they need to see you as, as a trusted advisor. And that's. I did want to ask you quick before I forget about ccim. But the difference with residential is you go through some con ed nobody knows everyone's a top 1% real estate agent. I claim that I am and I am by numbers, but we don't always have those designations. I think that make such a big difference, especially in commercial. When I see one of my friends are like, I got it, it's a big deal. So for our residential agents, can you just, you know, give us a quick few minute snapshot on exactly what A CCIM does. And what that means maybe even to you is when there's another co broker involved.
- [18:11]
A
So when it comes to ccim, CCIM foundation really came into the idea of we need to make sure everybody communicated the same language. So if you looked at real estate in general, in commercial, we start dealing with the Wall street, with the finance folks. There's, there's pension funds, everybody else who's out there investing and they're typically looking at stocks, bonds, and all of a sudden you have all this financial language that came into real estate. So your average real estate agent didn't understand this financial language and they became points where they didn't communicate well. So when CCIM was originally founded was the idea of let's get everybody to communicate on the same language. What that's evolved into is the CCIM designation. And basically to, to earn that designation, you've got to take a series of courses. So there's four core courses. You take ethics, you take a negotiations course. Depending on where you are, your career, you may have some electives. But those four core classes, the 101 is kind of a principles of finance, diving in understanding how to actually, how finance actually works. Not just how do you get a loan, but how do I determine the cash on cash return, the internal rate of return, all those things there. The 102 course, which is one of the ones that I'm an instructor for, that 102 course is diving into looking at market data and demographics. So if I buy this property here, will the demographics shift in a way that is going to be more in demand than it was or what is happening with the city's growth and understanding those kind of skills to see if I invest in a property, is this going to be profitable long term based off of what those demographic perceptions are going to be doing? The third course is looking at it from a user's perspective. So if you're a tenant or a business owner, should you buy, should you lease, what are those decisions you make? And then the final course on all that is the investment decision now. So it really is diving into the go or no go decision of should I buy this property or should I not? From there you've got to have a portfolio of properties. So not only we take these classes which are all, you know, 13 to 1600 bucks plus usually travel and all that kind of stuff, you've got to have a portfolio of deals and that kind of shifts a little bit. I'd probably screw it up on their website. They'll, they'll Tell you what those deals are, but they're generally 20 transactions all together in a five year period or in that same five year period, you know, one transaction over a certain amount, three transactions over a certain amount. And then when all that is done, you get to sit down and take the final exam. That final exam is a six hour, six hour exam where you are going through everything. You had those first four classes and then sitting down and taking it as well. It my mind was absolutely jello by the end of it, like there was nothing left. If I had to take the exam the next day, if I didn't pass the first time, there's no way I think I would have been mentally prepared to do it. So as you go through there, then at that point you have earned the CCIM. And the advantage of CCIM is generally it's looked at as kind of the PhD of commercial real estate. It's the designation that you can go out and earn and that kind of instantly gives you credibility. And it's not just brokers, it's your property managers can earn it, your appraisers, your lenders. But the nice thing is that it builds a nice community of individuals that are all doing different aspects of real estate and we all communicate on that same language. So as I go and work with other ccim, I understand they're going to understand things at a different level than what your average agent may or may not. And even being young in the industry, when I came In, I was 26 and I was losing deals to the gray heads that had been doing it forever. As soon as I had my ccim I noticed I started getting the interviews more often because I had something that said I actually do something now. I didn't mean I won every one of those, but I at least got in the room to interview where before I wasn't getting those same interviews. And ultimately that's what has been on the the somebody had put it this way and I like and dislike it, is that CCIM is like a fraternity. You get in there, you build the relationships. You get hazed through math and not through, you know, things that fraternity haze you on, but you go through that whole process and then as you build it, you now have connections all over. Where I was looking at a development deal just a few months ago and they were doing all sorts of things that I wasn't familiar with. Very quickly I was able to pick up the phone and call a buddy out of Louisiana who does this kind of development, say hey, walk me through this. Just makes sense. And next time we're at conference, I owe you a drink or two. All right, cool. Yeah, that's fine. And that relationship being built, we refer business back and forth. It's trusted. And even when I get stumped on something, I know who to call to to help me out. It's been probably one of the better things I've done in my career is being involved with ccim, especially on the brokerage side of my business. CCI was absolutely been a game changer for me.
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B
That's an awesome explanation, Will. I've never had it explained like that. Typically, I've probably never asked a question that way either. But typically the, the guys I know are like, it means I know what I'm doing and this is, you know, this is of kind, kind of ingest. And I've always been so. I've had my real estate license since 09. I've been flipping since 03. I've always been an advocate for having your license. And I always thought as I looked at, at retail and I typically only listed my own stuff or deals I did with partners or very, very close investors. So I had a very jaded view. I didn't deal with like I've, I've only driven people around a couple times out of hundreds and hundreds of transactions, they were family or blood and I didn't have a choice. And like, like you said, I'm not going to do that 40 times. It's crazy. That's just not what I'm built for. Right. I'm, I'm good at other things, but I was always like surprised and, and thought that there could be more in the residential industry for one, if they made it a little bit harder to get your license. For two. When I became a broker, I, I went through the GRI course. I don't know if you're familiar with that, but it's called Graduate of Realtors Institute. The, the old guys that brought me up in the business were like, this is the, the, it's not the CCIM of retail, but it basically is the CCIM of, of residential because I think it took like two and a half times as long to get my broker's license, which made absolutely no difference most times. Now the other agent on the other side doesn't care that I'm a broker. They definitely don't even know what a GRI is anymore. But, but I love the fact that it created that fraternity for you guys because forget about, you know, sitting down with a guy who owns a bunch of buildings and you can Spew out noi and everything that, you know, you're supposed to say properly. But I think having those connections to where if you're not the right agent for that client now you can bring in another agent and not necessarily for a takeover, but just to, to back you up and help you because it could just be something. Your first hospital system deal, you didn't start at 26 doing hospital system deals. You stepped up and stepped up and stepped up. And I think it's a shame in retail that you can get your license like that. Even worse as a real estate investor, you know, because you're, you're, you know, you're on social media. You see, anyone can be a real estate investor literally in one second. Anybody walking down the street in front of your office right now can just say, hey, I'm an investor and I do all these, you know, crazy
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A
what
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B
I want to say, like the sub two deals and, and, and all of the creative stuff and things that'll almost get you put in jail because there's nobody to police it, you know. So I do really admire that about your business and the guys or ladies who get their ccim because I know that it's a sacrifice and most of us aren't just coming out of high school or college when we start training or, or studying for it, right? So it's like you, you might have a family, you might not, but you're definitely doing business while you're trying to study this stuff that isn't really going to put a dollar in your pocket until come to find out, like you said, those doors were open for you. And if you don't get up to the plate to even swing the bat, you're not going to hit the ball. So eventually that makes you a better salesperson and just a better broker in general. Not even just sales, but a better communicator the more you spend time with those people. So I appreciate your, your answer to that. That was really cool. I think that's an eye opener for retail agents.
- [26:21]
A
When I think the, the thing with all that as well is that that focus on, and I think this is another big difference between residential commercial is just the fact of doing math. And to be truly successful at commercial, you've got to understand the math. And mind you, I was a army guy, right? We're not, we're not known for math, right? We're kind of big hammer, big smash. If it doesn't smash the first time, you get a bigger hammer. And when I went back to do my undergrad I didn't take remedial math. I took the remedial. Remedial math where I colored in the duckies the farmer had. Right. It was NAF was not my thing. It was after practice and repetition and going through these trainings, going through his class, going through ccim, doing these deals on a regular basis, you start understanding how the numbers really, really do make sense. Where I had a deal and I was so proud of myself for getting this thing across the table was that I found out the owner was getting ready to sell the property, and he didn't like the lease deal that we were putting in. He didn't want to put that much tenant improvement allowance into the deal. It didn't make sense for him on paper. Honestly. He lost money on paper for that deal, for that lease. And I just flipped the script and I said, well, if you put them in here, you're making a $20,000 investment. And if you sell your property in the next three to six months, like you hope to do, that $20,000 turns into $280,000 based off of your sales price. So you sign the lease today, in the next handful of months, you're going to make $280,000 more because we put this tenant in there. And he's like, wait, is that right? He looked at his broker, his broker's like, I don't understand that math. Walk me through that. So here I am in the middle of the discussion on their whiteboard, their conference room, going, hey, here's how this works. Walk through it. And they're like, oh, yeah, this makes a whole lot of sense. And they signed the deal. But it's because you understood how the math played. And, I mean, ultimately, CCIM is what taught you, or taught me how to kind of walk through and do those things and how to get Credit Creative to pitch a deal differently and make the math work on it. Didn't work on a lease, but it worked at it. When you were looking at the sale,
- [28:19]
B
that makes such a huge difference. Again, I haven't sold a ton of commercial, but I've done lots and subdivisions and crazy things, you know, a little bit more outside of typical residential. And I'm a numbers guy by. By nature, so I'm a little bit lucky that way. So extrapolating that stuff out, just. I'm doing it, like, right now as we're talking, I'm thinking about your deal, but it would. It probably won't shock you, but something that kills me, and I actually train agents on this. They don't know how to do a net sheet. So will, I'm sure you, you follow, like what we call a net sheet. It's just, I'm sitting down with your aunt and uncle. I'm going to list their house. They're like, okay, Dylan, we like all your stuff and your little iPad and your whiz bang Popeyes, right? And the pumpkin at, you know, Halloween. But how much are we going to walk away with? And I'm telling you, these guys cannot back of the napkin calculate you can do it. Right now you're like, all right, if, if they're paying 6, there's typically probably 3 or less and other closing costs on a residential deal. So you guys are like going to be at 9%, you know, in junk, maybe 10, but it's probably more like seven or eight, eight and a quarter. And I have so many friends in the business who are uber successful and they're calling the title company saying, what are closing costs going to be? And this is before like a file's open. You know how title companies like to work up numbers for fun. And it's like, you gotta know your job. But again, this goes back like to training. If you're, if you're with a boutique brokerage, I think it helps if you have the right broker or the right managers in there or mentors. If you're with a big place, if they've got good training, it helps. But for the most part, if you don't know how to sit down and explain a purchase agreement line by line, word for word, even in residential, and this comes from my investing days, then you're gonna lose because you're not taking your business serious. And had you not picked up that dry erase marker and started being a giver and explaining things and not being, you know, cocky and rude in there, you might not have closed that deal. And that deal may have led to, who knows, many, many more deals. And it's just that added the right attitude to take. So, so again, I think that's, that's really just goes back to basic business that a lot of us are missing in the, in the real estate world. So hopefully our listeners and watchers are paying attention to that because it's, it's not easy, but it's simple, right? So a lot of our, a lot of retail agents fall into those situations where they could be, they could get involved in a commercial deal. But like we talked about, we're probably not the right person for that. So typically, how does that work? I know it's different everywhere, but If I came to you and I said, hey, I've got this. These people, they want to buy this warehouse. I don't know what I'm doing and, or, you know, the hospital system, since that's, that's your specialty. I've got this, this, this plot, and I've got this hospital system. I don't know what to do. How do you guys usually deal with that?
- [31:05]
A
It's going to vary by agent, by agent, right? Some agents are absolutely. They don't want to cobra. They don't want to do anything together. They want to kind of be that lone wolf. And for them, it's probably going to be just strictly a, hey, pay me. I'll pay you a referral when the whole thing's done. I'll call you when it's done. Others may be a little bit more open to kind of partnering and coaching and kind of helping on that side. If you're a different brokerage, that can cause a little bit of interest or liability on who's actually holding it, who's calling the cards. There could be some interest in those things as well, or some interesting things as those things kind of come through. So some brokerages will allow, some won't. But ultimately, at the end of the day, you got to make sure. From a commercial perspective, I kind of go back and forth when I get a residential agent saying, I got a commercial deal for you. 1. Is it something in my specialty? Because again, the idea is all commercials the same. But you bring me a gas station, well, that. That's not me. I'm going to send you somebody who knows gas stations. But if you bring me a medical office deal, the other thing I'm going to look at, too, is, okay, if it's, you know, 500 square feet for a year, I'm going to make all of tens of dollars on that deal. It's not. It doesn't make sense where sometimes from the residential perspective, it's, well, it's a commercial deal. It's got to pay. Got to pay a ton. Well, well, no, I've been paid 18 bucks on a, On a commission, you know, for a, For a commercial deal. Like it. Some of them are small, and you, you do them because it's a favor. You do it because it's a, you know, it's a additional transaction on top of another one. I mean, there's reason to take them, but a lot of times it's making sure the deals that you have are qualified, and it's. It's somebody who is legit. I think that's one of the things that a, a lot of residential agents have to look at as well is that if they've got the deal, if they're going to refer it off, make sure it's good quality and they're good. Good business owner or good investor in that case. And then if you want to sit down, build the relationship beforehand. I think a lot of times you pick the first person that's willing to work with you, and then you find out it's just a terrible pro says so as you're finding that mentor, you're finding that person that you may want to work deals with, you should start building those relationships early on. I, I coach and mentor a lot of agents. There's some that I, I just don't like them. And it's not a, it's not that I'm a mean or they're terrible people. We just don't get along. And it's probably not going to be a good fit for us to work together. And you should work with somebody else. And I think that's the ultimate thing is I've got certain agents that I love working with and will absolutely partner and do all that. Other agents where you're either going to refer the whole thing to me or you should call so and so. And I think it's building that relationship early on because there's a lot of moving parts. And once you get those moving parts kind of going and everybody understands what they are, then, you know, it's, that's the best way to kind of start moving in. And if you're trying to add commercial to your business, shadowing is, is great. I've got no problem with somebody wanting to be the face of the transaction. They're kind of the relationship. Let me be the, the expert in the back end and you'll learn what's going on. We'll walk through it. You're in all those conversations and you start learning those deals a whole lot quicker, a lot better. And you know, especially if they're complicated, you start seeing all the complexities that go on with that deal.
- [34:16]
B
I think there's a big difference, the relationships as far, at least in my experience, the relationships that residential agents seem to have versus the commercial agents and then versus residential and commercial trying to work together. We talked like a little bit about responding or probably the old Robert Ringer book, if you're, if you're familiar with that. And they talk about commercial being for the big boys, because I look at like a real estate transaction, especially at A title company, again, call it a $500,000 home. You've got an agent on this side, agent on this side. There's probably a finance mortgage person. There's a title person doing the closing. Then after the. After the event is over, everything signed. Those two agents, they could be at the bar together, you know, drinking a beer, and they're kind of buddy, buddy, and they work together together. And even though they negotiated, that's kind of where some of these weird lawsuits came up. I don't want to get into that stuff, but they have a little more control, I think, when there's two agents than. Than when there's one a lot of times. So I think one of the. The toughest things to do when you're a residential agent is. Is working with a commercial agent and not understanding that there is, like, a different set of rules that you guys are allowed to play by. So can you. Do you have, like, maybe an example of. Of how that kind of happens?
- [35:27]
A
Biggest thing you'll notice that most agents or most commercial agents are not a part of nar. That's an hour conversation, all of it itself, of why that happens to be. So the. The big thing that you'll notice that's different there is that they do not subscribe to the same set of code of ethics that NAR does. So outside of licensing law, can they disparage you? They could, assuming license law is not there. Can they, you know, which again, by code of ethics, you. You can't do. You know, they can kind of handle transactions a little bit differently. They can. You know, by code of ethics for ar, you're not allowed to go and prospect somebody else's business in commercial. That's not a. That's not a thing. You can't get to the point of tortious interference, basically jumping in the middle of their contract and tearing up the contract. But can you bid somebody else's stuff? Absolutely. And those are the kind of things that you start seeing happening very differently. And what I find interesting is some of these non NAR agents know the code of ethics better than what actual realtors that are NAR members know it. So when you go do the same thing back to them, they're the one that files the ethics complaint against you because you're not playing by your rules. And I think it's something that. From ner. I think it's something we need to work on and, you know, help educate and do those things there. But absolutely, there. There are ethical things that are prohibited by code of ethics versus on the commercial side, even when it comes to the, the legal side working with with clients, most states will say that commercial is going to be a more of a buyer. Beware that you should have more education or more knowledge than the residential buyer and therefore you're not nearly as protected. In Texas, even doing evictions, I don't have a three day, you know, cure or get out. I don't have all that in Texas. The day you don't pay rent, I can, by midnight that night I can lock the door and then I go through the eviction process. Right. It vastly different than a residential. Even in Texas where residential you've got to give them notice, you got to wait, you got to the court like you're, you're 90 days plus to kick him out where I mean most time when I lock your doors, tenant magically has the money the next day. So you know, it's those kind of things that are drastically different that you really have to really have to know and understand. If not, you may find yourself a little bit of, a little bit of trouble.
- [37:51]
B
It always cracks me up how you know, how people aren't willing to hire professionals. I have friends who sold multimillion dollar properties and we call them land contracts up here. You probably call them agreement for deed. They'll pull something off of Facebook for a million dollar property, what we call a land contract because they don't want to pay an attorney. 250, 350, 500. And I'm thinking it's just like you said, if you get in front of a judge on a commercial deal, the judge is going to go did you have an attorney? I'm sure that's his first question. Who, you know, who, who drafted these docs and if you have an attorney there, it always helps. And in commercial again we're moving multi millions in property. Attorneys are inexpensive compared to what could happen or a great broker. Also, you know, I consider myself not an attorney for sure and you, you don't either. But I look at my clients like I'm going to protect them as rabid as any crazy attorney and make sure that no matter what they're trying to achieve, as long as it's above board, I'm going to do that. I'm not going to tell any secrets to anybody else and I'm, I'm going to be the most intelligent communicator possible and then help guide them to make the right decisions that help them to get to their ultimate decision that they wanted, you know, or their solution that they wanted for, for whatever they're trying
- [39:02]
A
to do with commercial is the more reliance on attorneys. And, and even in commercial, like, we butt heads with attorneys sometimes, because sometimes the attorneys are, well, the agent. We know I'm an attorney, and don't get me wrong, I, I, I love some of the attorneys I work with are great people. They work great deals. They absolutely do their role. But the difference a lot of times, even with the broker or the attorney, is that the attorney is looking at the legal and the risk and all that, which I'm looking at as well, but not the same level. Whereas I am sitting down and looking at what is the market doing? Is this the right setup with the attorney's not doing? What is the market? What's normal the market? What are we seeing for these deals? What are the leading trends? The attorney seeing what he's done over the last several times, maybe not what the newest trend that they're seeing. And there's a place for both. And I think that's the important thing is understanding having those professionals in the team. And that's another big difference with commercials that I have worked with a client who says, hey, we want to sell our property. Sweet. What do I need to know? Oh, here's my cpa. Go talk to him. And when we get ready, here's my attorney. And use them. And now I don't talk to the client until we get to the closing table. We're sitting down with the CPA and the attorney through the entire process until we got an offer. They're okay with it, we all present it, and then we go from there. So, I mean, it's a, it's a completely different world, especially as you start dealing with these larger transactions that I may not even interface with the client.
- [40:27]
B
That is a lot different than how it typically happens in residential. So thanks for that peek inside, Will. That's, that's something to think about for sure. Just a different way to approach the business. So I know we talked a little bit off camera. You have a podcast that, that you're doing, so I want you to talk about that so we can make sure that all of our watchers and listeners move on over and check yours out.
- [40:50]
A
Yeah, yeah, we appreciate that. And mine is Vets in Real Estate, and it's the Vets in Real Estate podcast. And what we're really focused on is taking those military veterans who are transitioning out of the military or may have been out of the military for a couple of years and are looking at coming into real estate as A career, whether that's lending home inspection, commercial residential property management, whatever the case is. And we've sat down and started interviewing those agents that have kind of made that transition already and talking about those lessons, learned, what worked well, what didn't work well. And, and ultimately the goal is to give you a pool of individuals to look at, see how they've found success. What has worked well, what hasn't worked well. I know when I came out of the military, you're dealing with culture shock. You know, coming from a military world to a civilian world is drastically different. And then coming into a business where you're maybe getting paid on commission, where you're used to getting paid on the 1st, the 15th, there's a lot of things that are different. And now you're building a business that's for you and it's not necessarily the selfless service that you're used to in the military. And ultimately that's what we're working on is try to help bridge that, that gap and help those veterans who are transitioning over. So it's Vets in Real Estate podcast on all social medias where vets in re so v e t s I n r e so Vets in Real Estate through all that. And again we, we post on a regular basis weekly interviews. So of course love to have the subscribers, love to have other guests that are coming in. And the one thing we focus on maybe a little bit differently is we're looking at the agents and the professionals and not necessarily the investors that are coming in. There are a lot of great opportunities for passive military investors and all those kind of things that are out there. And we really find anything that was focused on the agents and those that are got the professional licenses and those things, we don't find that nearly as much. And that's the core group that we're trying to help build is for those in the profession, not necessarily as a full time investor.
- [42:46]
B
If you are a vet and you are in the profession of real estate, make sure that you click through. All of Will's info is going to be in the show notes below. And listen, this is what it's all about, right? It's about creating relationships. You never know what can come out of them. Will wants to help a bunch of other veterans move into this business that we love. So Will, if you could sum up everything that you've learned over these last. I, I think you said you're only 29 now, right? So you've only been in the business a few years. I'm just kidding. But yeah, but if you could sum it all up, what if you could give us just like one sentence of all the wisdom that you've learned that you wish you would have known when you were 25 about this business, what would it be?
- [43:28]
A
Maybe a little controversial, but it's understanding demographics. I think especially from the residential side. We get so worried about it's fair housing violations, all that. But a lot of times we don't actually look at our marketing and how we market ourself and are we communicating the best way. So sitting down and understanding the demographics of who your ideal client is, how they want to be communicated with and communicating in those ways. I. I joke all the time that if I'm trying to sell to seniors who are trying to downsize, I'm not going to post on Snapchat. Why? Because seniors aren't on Snapchat. Well, I'm not discriminating in all that, but understanding what is the best way to reach that client. I think many of us in real estate don't do a good job of that. We think we can post a couple things on Facebook. It will get some deals not knowing that if our ideal client is truly on Facebook or if they're going to respond to a mailer or cold calls. And for me, once I really dove in and understood the demographics of who my clients were and how they wanted to be communicated with, I saw a huge change in my business by just making that shift is communicating the way that I want my ideal customers to be communicated with.
- [44:36]
B
Awesome. Well will from myself again, the whole Rare Agent nation. We appreciate you sharing your expertise with us and we will see you guys on the next episode. Thanks for listening to the Rare Agent show. I hope you got as much value out of this episode as I loved bringing it to you. If you're ready for more, make sure to subscribe so you don't miss a single episode. And don't forget to join our free Facebook group Closings from Leads. It's a community where agents like you are connecting, sharing strategies and getting exclusive, exclusive resources to close more deals. You can find the link in the show notes. I can't wait to see you there. Until next time, keep it rare and keep it real.