Commercial Real Estate Investment Sales Pt. 1 | Brokers Round Table

In today's episode we discuss strategies for identifying investment sale properties, the pros and cons of working independently versus on a team, tips for prospecting for off-market sellers, networking groups for brokers, and more.

Key Takeaways:

• Cultivating relationships with banks, lenders, special servicers is important for finding distressed property opportunities

• Networking groups like ULI, SIOR, and CREDO are good ways for brokers to meet developers and other professionals

• Specializing in a specific asset class or market allows brokers to become experts and better compete against generalists

• There are pros and cons to both small independent teams and larger brokerage teams, and brokers need to choose what aligns with their goals and personality

• Prospecting for off-market sellers requires manually calling owners and being discreet to maintain privacy for existing businesses

Check out CRE Launch Pro: www.crelaunchpro.com

About Your Host:

Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate developer and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.

Episode Transcript:

0:00

This episode of the commercial real estate investor podcast is brought to you by cre launch Pro. This online commercial real estate program is designed to take you from beginner to pro commercial real estate investor with access to all of my courses, our online community and monthly group coaching calls. Learn how to confidently buy your first commercial property today at www dot c r e launch pro.com. Welcome back to the commercial real estate investor podcast. I am live with Adam Williams and Chad Griffiths today, for another episode of the brokers roundtable. This is our first one of the year really excited to be back with you guys. Catching up on all things commercial, real estate brokerage is gonna be a good one. today. We're diving into commercial real estate investment sales. So how to identify these properties, these opportunities, how to go about getting the listings, how to go about marketing them, how to go about negotiating those sales, so that if you are interested in getting into the investment sales, as a broker, hopefully this will kind of be the playbook. Obviously, that has a lot of ground to cover in the next hour. So we're going to do our best to cover as much as we can. But if you have any questions drop those in the live chat. We'll of course get to them as we can. But Chad, Adam, how's it going? Guys? Haven't seen y'all since like December.

1:19

I was thinking that as well. Like I was missing my bi weekly meeting with you guys talking commercial real estate. So I'm glad we're back at it.

1:28

Same here. Good to see you guys.

1:29

Yeah, it's it's funny, I was actually missing this a lot too. It's, it's it's nice because it's good podcast content. But personally, it's a really good, you know, reality check, or just market temperature read. Alright, Jesse's here, too. But yeah, it's a good, you know, way to just stay on top of what's going on in the market. For me personally, so I've always enjoyed it. Jesse, what's going on, man?

1:54

Hey, guys, how are you?

1:55

We're doing good. We're doing good. So diving into commercial real estate investment, you know, sales today, let's talk about identifying inventory. So you know, how do you cultivate the contacts with banks, lenders, special servicers, that's probably going to be a big one right now. Tracking distressed listings, REO holdings canvassing owners looking to quietly sell because there's some properties that never want to hit the market, they actually want to sell off market and monitoring comparable deals for sellers. Let's start off with with cultivating relationships with, you know, people that are in commercial real estate that will have connections to these sellers that aren't necessarily brokers, right? You know, as a commercial real estate broker, I get a lot of or at least used to when I was brokering. We get a lot of deals from attorneys, and CPAs. Because oftentimes a seller will go to them. First, before they consider anything they want to think through the tax implications. They want to think through succession planning. So Chad, I'm going to lob it over to you first, I mean, how do you go about building relationships with these third parties that may also have relationships with your sellers? And who do you target?

3:06

Yeah, it's a great spot to jump in. And the first thing I'd preface it by is you're already fighting an uphill battle, trying to get in touch with either an attorney or a CPA, because they they almost certainly have numerous relationships with other brokerages. So you're already up against that of trying to tap into their network, when chances are they've already got an established broker, where I see the in for anybody considering getting into it as first recognize that it's a long term game. But where I think that there's tremendous opportunity, and this is what I've said to other brokers as well, that if I was trying to get into this is called call around and just ask if anybody has any tough assignments that they're working on. Perhaps it's a building that's going into receivership in a smaller market, and nobody wants to work it perhaps it's just a building with a bunch of hair on it. Ask them what their tough property is asking if there's any, anything that they just can't move, and you could try to get that as your foot in the door. And you could even just say that, listen, I want to get more into this work, I see a lot of opportunity. Do you have any tough properties that I could work on? Just to show you what I'm capable of doing? And recognize that it's just a slow grind, you've got an established trust with these attorneys and CPAs if you're willing to put that legwork, and be patient follow up and have an attitude of just being willing to help wherever you can. I think that all of a sudden differentiates you from other people that are just cold calling lawyers and CPAs trying to get in the door.

4:35

Yeah, I like that. Adam, what about you? What's your strategy?

4:38

You know, I honestly get most of my leads from other brokers and a lot of it comes from from partnerships, just letting them know especially younger brokers, like hey, you know, you find a something that's for sale. And you know what, let's let's put in money together to put together a group to own this Sometimes, people on the brokerage side, you know, they're surrounded by owners and sellers of real estate all day every day. But they just get so used to the feed business that they're that they're just not thinking about the ownership side of the business. So I've had, I've had a lot of luck just being around other brokers and, and, and just showing them a path to owning things. Because sometimes getting cash together for especially a younger broker is just kind of a daunting task. You know, they don't have banking relationships. They don't have equity relationships, and just kind of, I don't want to say acting as a mentor, but just just being there to not make them feel uncomfortable or green, that you know, that maybe maybe they would never ask older people with their firm because they don't appeal to both sides of the fence. So I've had a lot of a lot of success just kind of being a being a resource for for younger brokers in the market. Yeah,

6:03

I like that. I mean, when I was first getting started, I weaned on, you know, a couple of other developers that had a lot of that pre existing, you know, knowledge, experience and relationships that I could lean on, right? I mean, it's funny, because like, as brokers, we're out there negotiating these deals for clients, but we almost never get involved on the finance side, maybe aside from connecting a buyer to a potential lender. Outside of that you don't really get involved. And so that was a completely new thing for me to learn. But, you know, one thing that you start to realize, the more investment sales that you do, the better you understand and know how financing works, the easier the transaction is going to go. We've got a client right now, we sold them a triple net asset last year. And he reached out to me, he said, Hey, you know, I've got, I've got some cash. But, you know, ideally, if I can refinance this asset that you guys helped me buy, he paid cash for it, so we don't have to worry about any prepayment penalties. You know, if you guys could help me refinance this, I could go buy a much larger property, we could do another one. And he's like, you know, I know, that's not your thing. It's not what you guys do, necessarily. But I texted him back. I was like, Dude, that's what we're here for, man. Let me let me make some phone calls, I'll get you connected, we'll get you refinanced, and we'll get moving on the next one. And so because you understand that side of things, we're gonna get a second deal in 24 months, working with that one client, which makes your life so much easier. Jesse, what about you?

7:32

Yeah, I think the first one for me, it's, it's funny, we, you mentioned this, because I just got a text like an hour or two ago, and it was somebody that I had a residential real estate agent that basically asked me if I wanted to work on an assignment. And like Chad said, it's the long game, right? Like, you know, I've cultivated that relationship over the years, I didn't do it, because I expected business out of it, but you put yourself in those situations long enough and in create those relationships, eventually, they do pay off, you know, business gets done. On the seller side, I think you're right, I think the more you know about it, the actual selling and the financing side, you start realizing that you can help in other ways, whether that's understanding, you know, the structure of VT B's for say, less sophisticated sellers, or it's something like right now we're dealing with, we're dealing with a lot of deals over the last few months that have gotten punted, you know, three or four months down the line for extension. And a lot of it, unfortunately, is that it's in there waiting for interest rates to change. So just understanding the finance piece behind it, and being able to say, you know, structure your deal in a way that works for everybody, I think is, is really helpful. But yeah, I think you got to put yourself out there. And understanding that side of the business, I think will pay dividends, even if you're, even if you're, you know, only a couple percentage of your total business is even done on the commercial side. And then lastly, I agree, just on the last point, you know, connecting with younger brokers be be helpful to them, because those are the ones that are going to turn over these deals that a lot of times turn into massive deals for you. And then you cultivate even, you know, new younger relationships, even if you're a little bit later in your career. Yeah,

9:14

I want to pick apart the residential piece a little bit more, because that's one thing that I've seen is a real real point of contention in commercial real estate is dealing with residential agents. And it's always baffled me, because when I first started my brokerage and 2018, I grew it. I grew 300% That year by networking, exclusively with residential agents. Because I went out just told them, hey, I'm a commercial guy, you don't want to do that. You want to look good in front of our clients, I'll take care of them, I'll pay you a referral fee. And let's let's build a business together. And you know, nine times out of 10 they were all like perfect. I didn't have a commercial guy. I don't want to do this and I'm going to send you all the all the business and seriously I mean, we grew the broker It's 300% That year, strictly because of that, but so many commercial brokers don't want to deal with residential agents, they don't want to even return their phone calls. So I mean, you know, I would imagine everybody in here has done deals with residential agents and gotten quite a bit of business out of it. You know, what, what piece of advice would you give to other brokers out there, when it comes to working with residential agents or networking with residential agents to find more business because you can create a much broader sales force that can help you get deals, that isn't your competition? Really, Chad, I'm gonna kick that back to you first.

10:37

That's such a great topic. And I have a tremendous amount of respect for the residential industry. First, I think that they do some things completely better than we do in commercial, I think they're much better at branding, they're much better at getting their name out there, they hustle more like you could call a residential agent right now and say you want to see a house in an hour, and you'll find someone that will show you that house, whereas I don't think any of us would be taking that call. So I appreciate that hustle factor. i And like you, Tyler, I've benefited a lot from residential agents. And I think it first starts from having that respect for what they do. We we do similar things, there's a lot of differences. But there's a lot of similarities as well. And I think just appreciating that and, and showing a mutual level of respect is a good place to start. One. One thing that I've done right from the beginning is if I've ever gotten a referral, I'd always send out a thank you gift. So it could be like passed to the movies, so they could so the person could take their spouse, even if the deal didn't close, because I just wanted to reward good behavior. So no matter even if it was a bad referral, even if it's for like the worst referral, you can imagine, I'm still just send them a thank you gift, thanks for the referral. And if it was turned out to be a really good referral, I'd probably send them a smaller gift basket as well. And of course, pay a referral fee. But I just really wanted them to feel like their business was safe by sending it over to me and they'd be thanked for it. And I'm in full full support of everything you're saying on on building a business by having a Salesforce, I think one thing that we all underestimate about the residential base is that they they sell houses to business owners and vice presidents of companies and people that are involved in buying and selling and leasing real estate and they get a pretty close relationship with them by being involved in that process. And a lot of times, they'll ask them like, Hey, can you help me lease an industrial space for my company, or whatever it is. And if they're not comfortable doing it, if you're the first person that they think of, and you've sent them a thank you gift, even though nothing materialized? You're you're in their good books forever. Because I've been I've been doing it for a long time. And I think I've got I think I have residential people that have been referring me business for almost 20 years now. So it's, it's wild. It's that's the biggest hack, I'd say for anybody in commercial real estate is to just treat the residential community with the respect they deserve. And thank them when they send you send you a referral. Yeah,

13:01

I couldn't agree more. I mean, out of all of the different industries that I could go to, you know, again, CPAs attorneys, yeah, residential agents, it's hands down residential agents that send the majority of Referrals Out of everyone there. Because in the great thing is a commercial real estate broker. Think about it. Every other broker is networking with CPAs. They're networking with bankers, they're networking, with attorneys trying to get that business, you might be the only one in your market, that's actually taking the time to return phone calls with the residential agents and spend time with them. Jesse, Adam, you guys have anything else to add?

13:37

I have one thing to add. And I'm gonna go the opposite side of the argument real quick. But I'll tell you why. So my wife owns a B owned residential real estate company, I have a massive amount of respect. And I concur completely, they do a lot of things better than we do. But just as just on the other side of the ledger. If you're a residential agent, please don't pretend to be a commercial agent. I've got on. And on the other side of deals where you've got a residential agent that does both or you no moonlights as a commercial agent, I would just just as a word of caution, because we are kind of governed by a board of ethics and kind of a higher standard of ethics. Just be careful. If you're a residential agent, take the referral fee. And, you know, let let somebody else do the work because I've just been I've been on the other side of a lot of deals where somebody claims to be a commercial real estate agent, and they're obviously a residential agent and just kind of trying to do both. Now I started in residential. I'm not saying that you shouldn't learn how to do commercial and and transition to do that, if that's something that you're passionate about, and that's where you want your career to take you but I've just I've seen it go poorly when residential agents can And then latest commercial, not talking smack?

15:02

No, I mean, look, I agree with that. I mean, I, I've sat across the table on numerous deals with a residential agent that was representing a buyer, or they were representing a seller. And guess who absolutely dominated the negotiations. I did brutal because it was we were swimming in my pool. Right? If I was doing the same thing in the residential world, they would swim laps around me, because I don't understand how all of that works. It's a totally different deal structure, there's different points to negotiate. I mean, honestly, the funniest part, the most frustrating part about dealing with residential agents is when they try to negotiate cam, because they're like, Oh, it's a number, we can negotiate this, no, you cannot negotiate camp. But I mean, it's, it's, it's just the fact like, I'm there to represent the best interests of my, my client, which means I'm going to do everything I can to get the best deal for them. And I know that I know, things that you don't necessarily No, but how to structure this deal. And that's, it's not the best representation that that other party could get, unfortunately,

16:00

and I've literally had, I've been negotiating a letter of intent, and then have a residential agent, call my assistant to ask what terms and the letter of intent net? Like, yeah, that's not good. That's a good way to lose your license. So just, you know, be careful, do what you do? And do it do it really? Well.

16:22

Yeah, there's a lot of liability out there that you don't necessarily think about coming from the residential world, you know, you gotta be careful with that. Let's talk about distressed properties. You know, that's, that's the topic that I think is going to be pretty hot in the upcoming markets. Just because, you know, we're kind of nearing the point where a lot of these loans have, you know, they're starting to hit their maturity, and a lot of a lot of property owners aren't gonna be able to refinance them, which means receivership could be happening, banks could be taking properties back. Have any of y'all ever worked on, you know, reo, lit commercial listings, and if so, like, kind of walk us through what that looks like. No one

17:08

I've done a little bit on it. It's, it's challenging. And there's different stages that you can get involved in as well, like pre receivership, or when the bank has actually taken the property over and they're selling it or it's just going through the receivership process. It can be very daunting. And I would equate it much much to like you said as well as that. If you don't understand that very well. It's dangerous to try and actually get into it and work in that space, if you don't understand it really well. So what I would say is if if you don't have experience in that field, to partner up with someone that has much like a residential agent, sometimes getting outside of their lane and working in a commercial space, it's not a whole lot different from a commercial agent, trying to get into that receivership process. If you don't understand it, there's all sorts of problems that can arise. And your professionalism is at stake your ability to make a fees at stake, I would say that don't take that process lightly and find someone that's experienced in it before just trying to do it on your own.

18:16

Yeah, I think those are good points. I mean, it's Jesse trying to say something,

18:20

I was just going to say it's going to vary pretty substantially between the US and Canada as well. So our process depending on what it is, if it's a power of sale, foreclosure, in receivership, the ones I've done in the past have, you know, they've been pretty speaking of relationships, like we've had relationships with banks, where we will get a lead. Sometimes they're required to put kind of like a bid process with different brokers, whether that's a company in bankruptcy going with a sale, large lease or an actual distressed property for sale that goes to foreclosure. But to be honest, like, in the few that I've done, they've been very, not simple, but very straightforward, because we're dealing with a bank representative that's managing the affairs, and it's just been like, what are the market rates? Okay. You know, price it like this. Like, I know, these deals can get very complex, but the few that I've worked on it, it's almost like, it was just very straightforward, because the process was very clear. And the banks, you know, they said, This is the number we need to hit, do a third party appraisal. And, you know, we were off to the races, but definitely just going back to the conversation before on the residential, commercial, commercial side, just do it, do it, you know how to do so obviously, if you're going to do one of these deals, and you're a broker out of one of the firm's tap, tap somebody that's done this before, if you want to learn the ins and outs of it.

19:45

Yeah, it's definitely not a sector of commercial real estate that a beginner should be jumping into. Nor would a bank necessarily even pick a beginner commercial real estate broker to be to be working with them on it because, you know, it takes So a lot of market knowledge. And, you know, while they are actually one of the better clients that you could work with, because they're very unemotional about it, right? Like they look at it, they go, here's, here's the appraisal, here's what we have to get, and, you know, get to work. They don't get too far into, well, should we painted this color or, you know, how can we go about winning this tenant, it's very straightforward. But again, they're gonna be counting on you having the industry contacts will pull that deal off. And it can lead to a significant amount of business in the future, right, and possibly even some really good investment opportunities for you yourself. But it's not something that you want to miss out. Because there's a whole lot of people that are involved with bags, that that might be looking at you a little bit differently if you do. Let's see, we've got a question coming in from Kyle Conrad. He's saying what have you found as a successful approach to meeting developers, as a young broker? I come from a commercial development and adaptive reuse background, and we'd like to start sourcing these deals. Adam, I'll kind of lob that over to you, I know you have some development experience. Yeah,

21:03

I think the easiest way is just surround yourself with those type of people and become an expert in your space, I feel like, same five things we're on when we're on these calls. And it really, a lot of it comes down to you know, giving things away for free, a lot of that being knowledge and time and, and just being a resource. You know, I like to be so kind of dialed in on what I do that developers almost have to call me. And yeah, that's how I started getting my, my kind of my nose in with with developers. And since then, it's been kind of offering to, to your bring them deals, especially when it's too big for me to do you leaving my fees in deals, it's, it's just showing kind of a an over willingness to be a part of the process and add value with them. But I mean, these developers aren't going to call you because, you know, they like the the new BMW that you lease, right? Like they don't, they don't give a shit about that. It's really like, can you add value to the specific deal that they're working on at that moment. So one other thing that would be helpful is figure out who who is doing the deals in town, that are the type of deals that you want to work on, and then figure out how to add value. I know, it's super simplistic. That's what I that's what I would do. Yeah,

22:27

developers are a very different beast. I mean, they are very spreadsheet driven. They're very numbers driven. You know, the good ones are surprisingly risk averse, right, which I know is kind of an oxymoron for a real estate developer. But they really get into the numbers on every single aspect of the deal. And you really need to know what you're talking about in order to work with them, I would say, you know, as far as getting to like meeting them, the Urban Land Institute, if you have a Uli chapter in your area, could not recommend becoming a member and volunteering, you know, for check in at every event or something like that you will meet every single person at those events. And that's where developers like to hang out.

23:13

You know, what, another one, it kind of goes back to Chad's point before that, you know, you give a gift because you get a referral, because of the action, not necessarily the outcome. So in the same way, you know, you send these leads to developers, they've been in the business long enough to know that they appreciate the lead. And what we've done is, you know, specifically will talk to developers like right now, what are you guys looking for? So So depending on the size of the developer, maybe they have a fund that is specified specific to this type of property, we want 20,000 minimum square feet as as a site area, we want them in this area. And you find that and then when those type of you know, off market, things come across your desk, maybe they're on the shortlist of people that get gets a peek at it. And I think that's how you slowly develop these these relationships, because it kind of it cuts both ways. So it's, unfortunately it's, you know, it's like a lot of these answers, it takes time. But yeah, I think you allies, another great one, I was gonna say, any of these organizations where you can actually put a face to the name and start the relationship.

24:14

Yeah, and the other thing is to and then Chad will go over to you. I mean, what I would do as younger broker is just try and you know, maybe even walk into their office, right, and just see if you could sit down and bring them coffee one morning, take him out to lunch. Just ask them what they're looking for. Right? Don't necessarily start pitching them deals that you think that they're going to buy, sit them down and ask them what they're looking for. Because a lot of developers like if I was sending land deals to multifamily developers right now, they probably just send my emails to spam. They do not want to look at them. They you know, it's heartbreaking for them because they know they can't move on him. So there's no point right? So it's good to have those conversations and be very targeted with what you're trying to bring them more so than any other type of investor because the The worst thing you could do with the developers send them a piece of land that you think checks all the boxes. But you don't look at the zoning, or you don't look at where the utilities are, or you don't look at what's being built next door, the little things like that. Get I mean, you know, we all know developers can have a short fuse, I've been around plenty of them, and they will lose it over the smallest thing. Sometimes it's funny, Chad, what were you gonna say?

25:22

Yeah, another great one is named up in a IOP used to stand for the national association of industrial and office properties. But they rebranded themselves just as the commercial real estate development organization. I've been a member of it for over 10 years, 50 some chapters across North America, awesome organization to meet developers as well. And I'd say my experience, a good developer, will or at least should be willing to meet with any broker provided the provide them something of value. And luck can be exactly as you said, like, let me be a bird dog for you. Like I'm out in the ocean around and I'm trying to find every opportunity. And if I come across something that might work for you, I'd love to send it to you. I just want to know more about your, your buying criteria. If I was a developer, and a broker of any age really said that to me, why wouldn't you want to have somebody working on your behalf for free sending you deals? So I think every developer will meet with a broker providing you frame it? Well, and I think it was Adam was said, gotta bring value. But that's just that is it starts and ends with bringing value. There's no shortage of people that just want to call and it's all about me, I'm a broker. I've been doing this for 20 years, I drive a BMW, I don't actually add them. But I love that analogy. It's always about the broker, change that change that mindset. What can you do to help them developer owner company? What can you do to help them and if you can provide services, which we often work for free, until we actually get a deal done, if you can frame it in the way that I just want to understand what you're looking for, and I'm going to put the best options in front of you that I possibly can. Or I want to give you the best market information on this deal that just recently sold or some calm. If you can give them something they don't already have. They're taking your call, they're taking your meeting every day.

27:12

I think that's a great point. And that's something that every broker should be doing, no matter who you're calling, right, whether it's an investor or developer. I mean, when I started off my career, I worked in house for a developer, and he would get calls from brokers all the time. And he couldn't stand him. Right. He had other things that he wanted to work on. But he would take them from the brokers that would call and say, Hey, I just want to let you know, this comp that was just sent down the street from one of your properties. Let's talk through it. Every single property owner wants to hear that, Oh, you just sold the property down the street. Okay, what did you sell it for? How much of a price per square foot is that? What was it zone for? You know, what would that value my property, they all want to know that because it helps them with, you know, one, redoing their balance sheets, so they can go get more loans? Right, but to decide whether they should sell the property or not. And you know, hopefully, you're the guy that calls them and they say, You know what, yeah, if you can, if you can get that price for my property, I'll go ahead and list it with you. So, okay, we got a couple of questions coming in that I think that are relevant to this part. And I know we're dragging on, we haven't even gotten to the like second section of what we wanted to cover today. But we may have to break this up into a couple of podcasts. Max is saying what platforms do you guys use to find accurate phone numbers for properties? That is a question that is very prevalent in commercial real estate. So I'm excited to hear what you guys think, Adam, I'm gonna kick it over to you first.

28:34

You know, mine is mine is super basic, I use it every time I'm driving around. Anytime I see something. I always start with land glide, which is a great app you can get on your phone. And at least in the US, I don't know about Canada. And it'll, it'll kind of get you very quickly to the tax records. And then it's pretty easy to find people based on on where they received their documents. So I don't have like a, like a magic pill kind of app that I use. But it always starts with land glide. And the cool thing about that is it's It's in my pocket all the time you get any tax records you want with the with the touch of a button, and it's only like eight bucks a month or nine bucks a month. So that's that's the first step for me.

29:21

Yeah, I couldn't recommend land glide anymore. I mean, it is one of the best apps. I use it all the time. I mean, even my girlfriend will ask me like, Hey, can you look up who owns that property? I want to know who owns that giant house right there. It's like, it's so easy to just look things up from your phone. Jesse, what

29:36

about you? Yeah, so it's, it sounds like such a simple question. But as you guys know, depending on the asset class and what it is, it can be more complex. So just to break it up. There's two different things are seeing the ownership of a building is one thing, seeing the phone number for a specific person is more challenging. So I'll just say this from you know, from a US or Canadian perspective, if it is a commercial property, that is an office property and it's a fairly decent size. For us, a lot of times it's going to be, we're going to look up the actual record like the, you know, we could go on costar, see who the number company is, if it's a company that we have to dig a little deeper because of that, then we're going into the registry, and then finding the ownership. Now, where it gets a little bit complicated on, I'm not sure how it is south of the border, but when you start looking at multi res properties, we find that it's more challenging, they're just not the individuals that we contact, you know, we're not finding a lot of emails for sometimes you find a person. So for us, we go get the the corporate record, we see say, you know, president of the company, or, you know, CEO, Secretary, that whatever it is, we take that and we actually put that into like a Canada 411. So it's basically finding out a lot of times the home address of the person to call. So that's where it gets a little bit more challenging. Now, on the leasing side, I'll just say this briefly, you know, not directly of the question. But of the leasing side, we use Zoom info, just because, you know, we're looking for one contact, they're almost always findable, because they're at corporations, as opposed to, you know, potentially, you know, just a numbered company or a corporation or an LLC, that's just kind of a, you know, one step between where you, you know, the business and who you want contact. So yeah, I would say we use a couple of those different things, costar zoominfo. And then public records.

31:29

Yes, zoominfo is great if you're going for the corporate guys, because typically, they've got a website that has everybody's, you know, contact information on it. And it's, it's, it can still be tough to find the Zoom info, we'll get it. If you're going for smaller groups, I mean, honestly, the best thing to do is go on Instagram, almost every small business has an Instagram account. And they'll typically have a call or book here or whatever. And more often than not, the business owner is the one that is monitoring that page. So it is the easiest way to get directly in touch with them, or LinkedIn. LinkedIn is pretty good. But Chad, what about you?

32:04

It's funny, you mentioned that I've been trying LinkedIn premium over the last couple of months, where you can basically send a message to anybody, and you have an allotment on how many you can use every month. But what's interesting, I've had tremendous response on it, because people monitor their LinkedIn pretty closely, like really good feedback from a response from people that are on there. So that's an interesting one is just search for the company you want to look for. If you use the LinkedIn pro version, it will tell you the list of all the people that are at the company, including their positions. Where's one another one in the US that I haven't used personally, but I've heard very good things about called reonomy reonomy.com. It's a subscription based model, they claim to have contact information for the majority of owners and decision makers. So that'd be one that I'd be interested to hear feedback from other people on people that I've talked to swear by it, they say it's the best value for finding contact information. And we use Zoom info as well. So I've always thought that the absence of having this information easily accessible is probably a good thing. Because if it if every broker in your market had access to go to this database and just start cold calling people, none of these owners would take any of us seriously, if they're getting 3040 phone calls a day from brokers, that just wouldn't work. And there'd be no way to differentiate ourselves. So I think having some barriers to entry and some hurdles that we have to jump through to actually get this information isn't necessarily a bad thing. Yeah,

33:41

I agree. I mean, I think that that's a good point. I mean, when you're first starting out, you know, you might only be able to get around the 10 or 20 phone calls a day, right? Because you're having to go through in individually, manually look all of this stuff up. But have you started thinking about that 10 to 20 A day after a year. I mean, that's at least 250 If you're working five days a week, 50 weeks a year, right? That's 250 contacts, you can save on your phone, or save in your CRM, and then you've got 250 phone numbers next phone dial, you just drop them all in there, you can knock out 100 In a day, if you wanted to. So it takes a little bit time to build that up. Jesse, what were you going to add?

34:17

So I was just gonna say, quick question for for Chad, on the on the LinkedIn. But before that, I'm not sure if you guys have heard of intent topics on Zoom info, but we've been kind of playing around with them. And what they are is basically, you put in your search criteria for you know, say, an industry type of companies that you're targeting, and you put in searching for office space search, searching for Office relocation, searching for co working and these are all what's called intent topics. And once a week it populates. I don't know what the API in the background is doing. It's above my paygrade but it populates a bunch of companies that are searching for these intent topics. And it will basically give a score of zero One to 100 of how accurate it is. And we've had, you know, so what happens is once we get this data, okay, I know this company I know this company, I reached out to their head of HR or their their head of facilities and say, Hey, I'm not sure you know, we use a lot of software, you came up on a couple searches. And it's been pretty good. Like, we've had companies saying, we're actually looking for this because they are so specific, these intent topics, or you can make them so specific. So the reason I bring it up is I think goes to Chad's point. It's like, if all this stuff was readily available, everybody would do it. But even though we now have a lot of these apps that do this, it's still about being strategic and being able to actually utilize them having LinkedIn like, like Chad saying, reaching out directly. But yeah, my one question on that Chad was if if you are if you're doing email campaigns, or you're just doing ad hockey, messages in LinkedIn, direct messages,

35:51

I haven't done the like a blanket sweep yet. But what I've had success with is, I had a building for sale as an example. And it was very specific manufacturing property. So it was only suitable for, like a very small niche of and industrial owners. So I just made up a list of all the companies that I thought could be suitable for it, and did a search for them through the LinkedIn search. And when you have the Pro version, figured out who either the President or the CFO was, or somebody else higher ranking, and I just sent them the brochure. And it was it was as simple as just saying, Hey, I know you guys are in this space, this property is available now could work well, for your guyses need, do you have any interest attached to a brochure and actually have like a fair, like I did tours off of it, we ended up selling it to another group, but it did sell but I toured like big companies off of that. So it's, and I've still continued following up with these companies to some of them have had agents involved. And I've always taken the approach. If you have an agent, I'm more than happy to work work with them. I'm just reaching out to everybody. So I don't mean to step on toes. If you have an agent, I'm more than happy to communicate with them. But yeah, it's I've had tours from directly from doing that. And that's where I see some value is, I think it's $100 a month or something like it doesn't take much to to close one deal by getting and you can send a brochure. So you can actually send an attachment with that program, as well as you can send a brochure or whatever it is for $100 to be able to target exactly who you want to be in front of and get it into their inbox, we've got a high probability that we've seen it has pretty pretty good value. Yeah,

37:35

I mean, I will say I've done the LinkedIn premium before too. And I mean, I really should still be doing it. But I'm not brokering as much now that the team is kind of handling all that. But in 2021, when I did LinkedIn premium, it was responsible for over $18 million in deals by 2021 alone. So that it's a phenomenal platform, you know, it's the $100 a month is unbelievably cheap, it's worth it. In my opinion, it's one of the better prospecting tools you could have. Because people are on LinkedIn to do business, right? It's not like Instagram, where you're interrupting their day, or Facebook, you know, where they just want to look at pictures of cats, and said, totally different kind of approach. Couple of things I wanted to add to what you guys want you guys throughout their white pages, right? No, that's so basic. But if you've got an address, it actually works pretty well. Another thing that we've been testing out that so far seems to be really good is seamless AI, that's S E A M le SS. And it is a a Chrome extension, so you just install it on your web browser. And I don't know about how much it is because I just tried out the free I think you get like 10 credits for the free version. But when you go to a company's website, it will pull up like LinkedIn profiles and contact information for the people that are associated with that website. And it'll give you a probability as to how likely this is their email how likely this is their phone number. And a lot of the ones that I found were like 87% plus positive that that was the correct contact information or email address so it's not 100% I think it's going to be tough finding anything out there that is but 87% is pretty pretty good in my opinion.

39:24

Just yes for those interested on the Zoom info I know it's it's it's not cheap but basically the same thing zoom zoom info has a sales OS Chrome extension where same idea you click it open has all the contact information and has a little fire icon if beside their email if they have a high probability emailing and a fire icon beside their phone if it if they're if they're more of a phone person.

39:47

I love that. Justin is saying this killer guys appreciate your knowledge and excited to be a part of the CRE YouTube community. Justin, thanks for joining us, man. He's got a question. He's saying it do you all feel like you are out there experiencing growing momentum? Or are you still creating momentum? In your space? I'll kind of answer that one first. I mean, I think that we are. It's a little bit of both, I would say, like, Look, 2122, we grew because the market grew, right? Like, there's, there's no doubt about it, that I didn't have to do anything to get deals closed in those years, it just kind of fell in the lap. But, you know, we're creating momentum. And a lot of ways. I mean, you know, everybody on here has got a podcast, right? That's creating momentum within their markets and for their businesses. You know, social media presences, YouTube, anything that you can do to kind of differentiate yourself from the crowd, will help you create your own momentum, as well, as you know, honestly, just being around for a long time, I know that that's the worst answer for a new broker to hear. Because you're like, Man, I just, I want to get that this year, it's your second or third year of brokerage. I mean, we've all been in this for like, 10 years or longer. So after a while, you know, kind of like, I think it was Adam that was saying it earlier, like people just start calling you, right? I mean, you don't really have to, to work as hard at the prospecting as you do in the first few years. But Chad, I'm gonna lob it to you. What are your thoughts?

41:15

I got a quick answer. If you're not growing, you're dying. There you go. Jesse.

41:24

Yeah, I think I think you're right. Sorry, Tyler, to your point, you only kind of in retrospect, you look back at those deals that a lot of them were easier to do with the momentum of the market. I would say this, though, as a kind of a kind of concrete example. On our end, we're, you know, we're piling up a lot of listings. And it's typical in this type of market as as vacancy goes up. And as it's harder, it's getting harder to sell certain asset classes. But they're also one of those things where you cultivate those, and it's kind of like that slingshot, when the market does turn or when you start selling these assets, you know, you have them. And five years ago, if you've got certain mandates, you were already kept cashing the checks in your mind for the Commission's now, we're now you have to actually put the effort in and cultivate the relationships. And also be I think, be brutally honest, if you're in the brokerage side with your clients, like, I just don't be asked that Mike, the clients anymore. You know, when they asked me, How long do you think this is gonna take to sell? How long do you think this because I don't, you don't want to be in a relationship that's going to be that has an expectation to do something in a certain amount of time that you knew was not going to happen. And then they'll end up switching going with somebody else. And I think that this in this market, there's there's just a lot of opportunity, I think. But yeah, now I think is the time we're, in our end, we really have to roll up our sleeves and be able to work for our Commission's

42:48

Yeah, I'd rather take no deal over a deal that I know is gonna tank, right. And when I first got started, I would take anything, I didn't care, I was like, I'll work through it, it doesn't matter. But now, you know, I'm like, I don't need the deal. I mean, we'd love to work on it. Right. But if you're going to have unrealistic expectations, I don't really want to deal with that. And the thing that I found is, you know, it's usually the first broker that ends up gaining all the momentum for the property, and it's the second broker that ends up closing the deal. And unfortunately, you don't get paid for building momentum in this business, you get paid for closing a deal.

43:23

Yeah, totally. The only thing that I would add, and you kind of said it in a different way, is just trying to make sure that you're building the right kind of momentum. Right. And, and I always try to think about, you know, a is this. We all try to get listings, no matter what, when when we're young. But I always try to think about like, what is the ultimate client? What is the ultimate listing? What is What do I want to be doing in you know, two years, three years, five years, 10 years? Is this the momentum that's going to kind of lead me to that goal? Or is this just kind of like a red herring momentum that might keep me busy, might give me something cool to talk about in a networking meeting, or in a sales meeting with my, with my crew. But if that's not creating the kind of momentum that I want, for the long term, then then you've got to kind of be not just putting your energy in the wrong in the wrong.

44:20

Man, I've got a great story on that. So from 21 years old to 25, almost exclusively what I did was leasing. Right, I did so many leasing deals. When I was 25. I wrote a book on leasing commercial real estate, because I was like, Oh man, this will help me get even more leasing clients. It's gonna be great. When I was 26, is when I started getting into investment sales and doing more and more investment sales. And once you get a taste for that, you kind of only want to do investment sales because it's a little bit easier. Once you understand how it works. And the deals are just way bigger. But that book was bringing in D also for smaller leases, which is great, right? Like, that's literally what I built it to do. But I wasn't thinking far ahead enough into the future of is this the kind of business that I want to be representing 2345 years from now, I almost stopped doing all leasing altogether. And so that book, it's great like it serves its purpose. But as a lead generator, it wasn't very effective for what I could have built instead. So I think that's a great point, Adam, always think about what you're wanting to work towards, and start catering to them. I mean, if if a doctor is your perfect client, put all of your marketing towards doctors, everybody else will come, right. Like we don't mark it at all for leasing, we still get leasing assignments, we mark it all for investment sales. And they still come our way. Avery is asking or saying question related to brokerage do brokers end up earning more splitting everything in a team that handles high volume, or sourcing and executing deals independently, I have a feeling we're gonna get a couple of different answers out of this one, this will be fun, Adam, I'm gonna I'm gonna start it off with you.

46:05

I swear I repeat myself so much on this. And I don't mean, it's, what do you want to be? Competitors, their whole goal is to build a large leasing team. And to cast a wide net and have you know, whatever it is pick a number 3040 50% of the market share for their product type. And they're willing to carry, you know, a large burn rate for the course of the month to have that so and they make a small piece of a huge pie and seem to be happy with that. I'm the complete opposite, right, I have a tiny team of few people. And you know, I'm hyper focused on what I want to work on. But I have a very small burn rate. And I keep a massive amount of of what I earn. And I turn all of that into investments on the development side and on the equity side. So I don't know if there is a good answer the people from JLL. And CBRE would tell you that you have to be part of a huge team and Cushman and I'm not picking on those guys. I'm just saying anybody that's built their life on that model. And in a lot of people, just our team, guys, right? They want to be part of a big team. And so it just goes back to like, what do you want to do? And what do you where do you want to be in a couple years, if you want to be part of a big team, or maybe you're a really good manager, and you want to be a leader of a big team, I just think you have to be really honest with yourself about your view, your personality, what drives you, and build your business around around where you want to be in a few years. Again, repeating myself, you guys, you don't even need me here. He just like you just need to have a button where I repeat the same three things over and over?

47:58

Well, the funny thing is like, and I know everybody's got their own podcasts. So you know, when I'm doing interviews, and somebody asked me a question or something like that comes up. I feel like I do the same thing. Because it's like, well, it kind of depends. Like that is the that is the phrase in commercial real estate. It depends. I mean, I think I think you're right, though, Jesse, what are your What are your thoughts?

48:18

So to repeat, Adam, again, here, just back on the the BMW thing. It's just funny, because it's like, there are some people that say their, their goal is to be part of this famous team from CBRE in New York. And if that's your goal, you know, and you would, you know, there's some people rather make less money be on that team and have the notoriety then, you know, be on a small team and, you know, and make more money. So really, at the end of the day, it's as much as we look very similar and act very similar brokers, you know, it's we're not all the same. So I think it really depends. But to answer the question, specifically, I don't think you can, you can make an an equal amount in both situations, I think, because there are people that are on small teams that bring in an enormous amount of commission, there are people on huge teams that after splits, you know, is the average person on the team, you know, what are they making, because you have to also remember, the splits are slanted to senior brokers that are on that team, and then, you know, to, all the way down to the junior team. So again, I think, I agree completely, I think it really depends on what you want to do. And if, if you are a team member type of person, because you have to remember to if it's only a small team you're on, you're gonna be doing a lot more different types of functions that maybe you're not necessarily suited for. And I, you know, think the whole reason for teams, you know, by definition is to have people that are better at certain things and have them doing those type of things. At least that's the way our culture is here. Um, you know, if you are all just guys that are just going to cold call, I don't think that's a very, you know, the most optimal team. So, I think there's there's so many different ways to skin the cat in this business. And you got to do with what? What you want to be doing and 510 years from now and try to figure out what path it takes to get there.

50:09

Love it, Chad.

50:11

I couldn't agree more with with Adam and Jesse had to say there is no perfect answer because there's no perfect way of trying to allot somebody into one specific spot without knowing more about what their goals are. There's people out there that love to work 80 hours a week, that's just what they thrive on. They want to get up at five in the morning and go to the office and, and work all day and then go home and eat at nine o'clock at night. And those people would do very well at a big brokerage. There's people that work less than do well in big brokerage as well. But that's that's what that lifestyle is a smaller medium sized brokerages, there's often more of an emphasis on family and social life and investing, have an outside portfolio, where you at those big shops, you're, you're probably discouraged if not outright prevented from building your own portfolio because the company might see it as a conflict of interest. So there's, it really comes down to weighing all the pros, all the cons. And I think Jesse was said, maybe add them to two is where do you see yourself in five years, I think that that's the biggest thing. Because you can make money anywhere you can make money, selling something on the side of the road. So you could definitely make money in a smaller company or large commercial brokerage. But there's so much more to this business than just trying to maximize your earning potential. It's your quality of life, how you enjoy doing it, whether you have the ability to sustain that and have longevity in it versus whether you'll just burn out after three years. There's there's a lot more that goes into it. But I know personally, brokers that are at large shops that love it. I know, brokers at small shops that love it, and then I know ones that both that hate it. So they're it's very hard as I think Jesse, and Tyler did a great job of explaining is there's so much more that goes into it than just saying, Can you make a lot of money in a smaller large brokerage?

52:05

Yeah, it all comes down to your personality type. And you know, what I would say is try both, you know, I mean, I never worked on a big team, I was always at a boutique firm. So I was always doing deals on my own. But there's something to be said for joining an established team with older guys that can show you the ropes, right, I had to go out and learn everything on my own, which is miserable. But I also kept 100% of my share that commissions, right, so there's there's pros and cons to each. On the team side, you got to do more deals, you have to write one plus one has to equal three, in order for that to make sense. But you can go take a week vacation, and actually turn your phone off and know that your team is handling everything else. And you're still going to be closing deals, you're also probably going to be closing deals more frequently. Right. So if you're a little more income sensitive, because you don't have enough saved up or whatever brokerage is tough, you know, the first six to 12 months, you're probably not going to make that much. Whereas on a team, you know, you're probably going to have some deals coming in already and keeping your income up. If you're going solo, you're gonna get a much larger share, of course. But you're, it's all it all comes down to you to get the deal closed and to get that check. So I mean, I think that there's there's pros and cons to everything. I mean, look, I've got seven brokers on my team now. Six of them are in teams of two, right? So there's three teams of two. And one of them is doing a phenomenal job of one of the guys goes out and gets the listings. The other guy goes out and gets the buyers. And they get to share the 6% commission together. So you know, because one's representing the buyer, one's representing the seller, and it's working phenomenally well for them, they're making more money together than they were separate. And that's really what you want. If you're gonna join a team, right? It means you're gonna make less money. You know, maybe you're doing it for the experience or something else. But those are, those are kind of my thoughts. Jesse, we got a question very specifically for you. So question for Jesse. Are there? Are there any networking groups in Toronto? in the Toronto area that you recommend for a young new broker? I've been focusing on warm calling and learning like crazy. Any other tips on getting started?

54:23

Yeah, so the two that we mentioned, neon and Uli, I didn't know that there was a rebrand chat. So whatever that rebrand is just taken me off onto Google. The third one I would say is si por which I know is not just Canada, Canada and the US. I think those would be the three and all three of those, despite being I guess, global at this point, have local chapters. The nice thing in Toronto after you know we had locked downs a lot longer than our friends in the States, I think may have just reopened there in person Networking events. So if your work with a broker or brokerage, try to get your brokerage to pay for a portion of it. If you don't, I would honestly say it's one of those things that if you can bite the bullet and pay the cost for the annual membership, it'll pay off if, if this is what you want to do.

55:15

Awesome. We've got about five minutes left, before we get to call it. So what I'm going to do, we'll turn this into a part one of the investment sales podcast, because it's clearly a very, very popular one. We've got two more questions. Let's blitz through these real quick everything thoughts on specialization versus diversification when deciding which asset classes to transact on as an investor or broker? So Chad, let me let me lob it over you quick thoughts on that? Such

55:42

a great question. And this is something that everybody should be asking themselves? How I would answer that is to put a question back to you and say, What is your competition doing? If your competition is generalized, and you might see a broker that does a retail deal and an office deal and a multifamily deal, typically, you're going to see those in much smaller markets, like two 300,000 people, then that's what I would do as well, I would try to be better than your competition, but I wouldn't go leaps and bounds if everybody's generalizing, I wouldn't generalize either. But if you're at a medium to large sized market, and I'd call that like a million people and up, you're gonna find that everybody specializes. And it's very hard to compete. So I'm in the industrial space, that's all that I do is I just follow industrial deals and follow what's happening in follow who's in the market, and what spaces are being developed and market comps and talking to clients. I know the market intimately, it'd be very hard to compete with me if you're also trying to keep on top of multifamily and try and keep on top of retail. That's not to say that it's impossible. But if your competition is very specialized in one sector, and I mean, Adam and Jesse can talk on this to being in retail and office, it'd be very hard to compete. And I'm like, I know that I couldn't compete with Adam or Jesse in their markets, I just couldn't, if I wanted to go into their markets, they have so much more areas of specialization and more knowledge and that more value add that they can provide to their clients, I just couldn't compete. And that even kind of circles back to our conversation about like residential and commercial, I can't compete in the residential space. I don't know the housing inventory and trends and what schools are are like, I don't know any of that stuff. So I kind of stay in my lane. And that's just what I've become very good at. If you think you can do multiple if you think you can compete with someone that just specializes. And you can do that in multiple asset classes. Good for you like that. You're you'd be a remarkable person to be able to retain that much and work that hard. But I would say you want to be competing with the best in your business and the best in large medium to large size markets all specialize.

57:59

Yeah, great points. Guys. I'm gonna give this one to Jesse. You're Adam on the on the next question. So Nate, Omid saying glad to catch the live. Thanks for joining us, Nate. What are your guys thoughts on prospecting for off market sellers, Henry Eisenstein is big into this strategy. I mean, that's kind of what brokers are always doing. Right prospecting for off market sellers. Maybe Nate's meaning like, you know, they want to keep it off market. They want you to keep it as a pocket listing instead of going straight to the market.

58:28

Yeah, Adam, I'll let you take this one.

58:33

Yeah, I want to know who Henry eyes and Steen is a sounds like we should we should ask ask him. I apologize.

58:40

Henry's gotta Henry's got a YouTube channel. He's actually been on my show. once before. He's He's,

58:45

where's Henry at? It sounds like he's the expert.

58:49

I know, sounds like we need to talk to him.

58:52

I get that question a lot. And this isn't super applicable. And we're, we're down to last minute. So I'll keep it really, really quick. And dirty. We do a lot of businesses that have restaurants and retail and hotels and things like that on them. Where if they're for sale, it's kind of sketchy, because there's people that are employed there, right. So I always tell people, you we get a lot of a lot of offers to lease and sell these types of things, we had to be very careful with the way we market we did it bassins You know, rifle or sniper rifle versus shotgun blast, like we would normally market something. And I always tell people, you can have it done quick, or you can have it done quietly, you know, it's hard to do both. So that makes it really challenging. And, and again, coming back to specialization. I mean, if you have a certain sector or a certain geography that you play in, you're going to be a lot more likely to get these type of off market deals because you're already gonna know all the players in that market. So you know, we'd love to hear Henry, Henry's thoughts on it, but that's how I typically handle it. Yeah,

59:59

I would I agree I don't have too much to add to that. I think that it's it's a lot tougher to move properties off market, you've got to, you know, sit down and manually make all those phone calls. But sometimes you just have to do it and some buyers prefer to buy that way. Right? Even if it's the same deal, they just feel like Oh, I'm the only one looking at it right now. None of the gun whatever it is. Awesome. Well, guys, it was good catching up with you this week. Looking forward to seeing you again here. In a couple of weeks. We'll do a part two on investment sales. And we'll see y'all then. This episode of the commercial real estate investor podcast is brought to you by cre launch Pro. This online commercial real estate program is designed to take you from beginner to pro commercial real estate investor with access to all of my courses, our online community and monthly group coaching calls. Learn how to confidently buy your first commercial property today at www dot c r e launch pro.com