Getting Started As A Commercial Real Estate Broker (Brokers Round Table)

Commercial real estate brokerage is one of the best paths to take in the commercial real estate world if you're just getting started. Not only will you learn how these deals get done from the ground up, but you'll be able to get paid doing it and make many good connections along the way if you decide to transition into the investment or development side of things. Today, the brokers talk about how they got started as commercial real estate brokers and offer their advice for anyone looking to break into cre.

Key Takeaways:

• It typically takes 3-5 years working hard as a commercial broker to start seeing consistent income and success, so be prepared to grind it out for the long haul.

• The top earning potential for brokers is significantly higher than most people realize, ranging from around $200k annually up to millions per year for the top producers.

• Developing creative ways to generate leads beyond just cold calling, like through content marketing and community involvement, can help you stand out from the competition.

• Gaining foundational knowledge through commercial real estate courses and designations provides value for clients and signals professionalism to the industry.

• Building long-term relationships and trust with clients over multiple deals or outside interests leads to more organic referral business over time.

  Action Items:

• Get your real estate license and start prospecting clients through cold calling, door knocking, networking events, and following up with past clients. Be prepared to work hard in your first few years.

• Consider taking commercial real estate courses through organizations like CCI to gain foundational knowledge and signal professionalism.

• Read industry publications, reports, and websites regularly to stay educated on market trends and complex deal structures.

• Develop your online presence by consistently publishing valuable, educational content through blogging, videos, social media, etc. to attract new clients and opportunities.

• Get involved in groups, clubs, or activities outside of work to build relationships and trust with potential clients in a more natural setting over shared interests.

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:

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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 on how to confidently buy your first commercial property today at www dot c r e launch pro.com.

0:25

Welcome back to the commercial real estate investor podcast today I'm joined by Chad and Jesse and we're going to be diving into getting started. As a commercial real estate broker. We've all been brokering for at least five plus years, maybe 10 plus years,

0:42

or close to it. And I bet we could trade some war stories as we usually have. But, you know, if you're interested in getting into the commercial real estate industry, I am dead set unbelieving that becoming a commercial real estate broker is by far the best way for you to get to know the industry because while you're learning it from the ground up, you're learning how to generate income on your properties. And you're meeting a whole bunch of investors that can be really good contacts for you later on. So we're gonna be diving into our origin stories. What our first year was like, in spoiler alert, mine was terrible. And any advice that we have for anyone that's looking to get started Chad Jesse, welcome to the show, guys. Great Hey, how's it going? Doing well guys doing well? appreciate y'all joining me. Well, Chad, tell us tell us your origin story in commercial real estate. Why? Why did you become a broker?

1:32

Yeah, that's a great spot to kick off. And actually, I'm 18 years now that I've been in the brokerage I was having a conversation with one of my colleagues today and he's 26

1:46

Oh, no, we lose Chad.

1:48

Yeah, I didn't hear anything. Oh, Chad, come back. Jesse. Let's kick it off with you. And what's Chad gets back. Good. We'll, we'll bring it back. Yeah, so apparently you don't make it past 18 years. That's the That's the moral of the story there.

2:04

Yeah, for me, it was actually my first my first kind of foray into like the work world after

2:13

university or college was not in commercial real estate is actually in, in energy. But I started investing in properties when I was in school so for me there was a point where I was an extra neighbor I had he he worked with

2:29

basically in Canada, we have the big five banks six, depending on how you do it worked for one of the big banks and I was pretty close with their head of investment banking, real estate, and he basically set up a meeting for me and with this guy and said, like, Listen, you obviously like investing in real estate, you know, what are you doing and kind of the energy or finance and energy space like this seems like it'd be a good career path. I ended up meeting with this this gentleman and he actually sold one of the largest at the time one of the largest sales of commercial property Scotia Plaza in in Toronto. And yeah, from there I didn't initially go into brokerage and a couple years later I got a

3:11

one of my buddies said You know, we're hiring and at this firm, Avis and young and kind of took the took the bullet so that's kind of how I got in I think I was at the time I felt like ah, but old guy now like starting all over again, meanwhile, was probably like 26 or 2025. So it it was it was still pretty early start in the long term. But yeah, I'll I'll pass it over and we can we can talk about the first year after Oh, yeah, that was that's gonna be a fun story chat. I think you're back

3:43

I hope so. But all this

3:46

technology that we have now and works that's great, and when it doesn't, it's painful, but hopefully I don't cut out again Yeah, I started in in commercial and industrial in 2005. And before that, I actually did a year of residential real estate. So even going back before that I was buying and selling some smaller properties with a couple of friends didn't really make any money but just had the real estate itch. So game licensed joined the Residential Brokerage in 2004 a heated it so I did it for about a year and then switched over to the same company that let you those and

4:22

then you go What what did you hate about residential real estate I but we've got that in common.

4:30

Yeah, and there's I wouldn't denigrate it because there's people that do that. I've got friends that are still in the industry and they like it myself. Personally, I just I hated the hours. You're always at people's beck and call. They want to look at a property at eight o'clock at night you have to go your weekends are shot, your holidays are shot because that's when people have time off and they can look at properties. So I just I always felt that I was on call like a like a doctor on call that you're anytime your phone rings. You just have to jump and also wasn't over

5:00

A lot of loyalty, people tend to live in a house for I can't remember the exact statistic is but called five to six years. So you're only going to do one transaction with that person, every decade or so call it maybe two transactions in a decade. So it seems that you have to do so much on the customer acquisition front to get a customer. And then you might only deal with them once or twice every, every decade. Whereas on the commercial side, it just people that I talked to, they have clients where they've done multiple deals with. And that's, that's really the appeal was work more business hours work more on the corporate side. So you're not dealing with the emotional, people that get upset because the carpet didn't match the curtains and they didn't like one element about it. That's not to say that there isn't some creep in the commercial side of there being some emotion sometimes, but for the most part you're dealing with, with smart, sophisticated people who just make analytical decisions. So combine that with not having to work evenings and weekends, and the ability to build a client list that's a lot more loyal to you. And you can do a lot more deals with. That was the appeal on why I decided to switch and 18 years later, I can say that that's exactly what has happened. I would never go to residential. And I would never recommend anyone to go to residential after having done both.

6:17

Yeah, bread there with the man, I think it takes a special kind of person to be a really good residential broker. And of course, we're not denigrating it. I think that I mean, there are plenty of successful residential brokers that are better than, you know, probably 80% of commercial brokers out there, right and probably made more money. It's just a totally different type of sales. You know, the great thing about commercial real estate is you're basically working a nine to five if you want to, right. I mean, some of us tend to work a little bit more than that, because we want more out of this. But your clients are working nine to five, they don't work on weekends. So I always had that free. I only ever listed one residential property. That was the biggest mistake of my wife. I worked for a boutique development firm when I first got started. And about a year into it, our residential agent left we had an in house residential agent for all of the custom homes that we were building. And so they looked at me and said, Well, you've got your real estate license, go list this house. And I looked at it. And I was like, I had the same feeling that I know a lot of residential agents do when it comes to commercial. The house was $1.2 million. I was like hell yeah. When 3% of that commission, let's go. And man, I got in there and hosted an open house like four weekends in a row.

7:28

And decided it's not worth it. I'm not touching this. I don't know what I'm doing. It's I mean, we'll put it this way. I had a lady walk in one time. And she was like, you know, I love the house. The price point works for us. But I just can't imagine my kids growing up in a house painted this color.

7:46

And you should have seen the look on my face because I was just absolutely dumbfounded. I was like what is that even me? Well, Cody would have paid it I'll pay it for you right now. What color do you want to paint it? Like it's it's the smallest little thing that could completely be fixed. And people just don't because of that, like she didn't have the feeling that this was the one in commercial real estate. So different people walk into space and the ceilings fall again and they're like, how much is the rent? six bucks a foot net? Cool. Let's do it. How much TR are they gonna give us but I got I got started. Actually right out of college. I mean, after I dropped out. After my freshman year, I had done Cutco sales, sold knives back right when I graduated from high school did really well with that made like 30 grand that summer was something crazy. And I sold to a boutique developer for his beach house set of knives. And he heard I was back in town and reached out and paid for me to get my real estate license and put me to work on his

8:44

on his shopping centers and office buildings. So I had a very interesting entree into commercial real estate because it took me a very long time to realize that that's not normal, and that it's incredibly difficult to break into the industry.

9:02

I mean, let's let's talk about that real quick. Before we dive into what was your first year like? I mean, why why do you think commercial real estate is such a difficult industry to break into and what can somebody do to kind of help get their foot in the door? Jesse alto, this whatever you first? Yeah, I think it's kind of connected to the residential piece. Just I'll briefly say like on that point, the residential, I feel it there's a bit of a, you hear that 10% of agents make 90% of the Commission on residential I know, like their stats across different

9:35

areas that that's, you know, maybe not exactly that amount. But the barrier to entry is I think, from the public's point of view is fairly low and it's obviously different provinces in different states will have different requirements. But I think that's part of the part of the kind of bad rap that a lot of bad rap that a lot of residential side and the residential side get. And I think kind of, to your point, commercial real estate is

10:00

It's seems that the barrier to entry is higher. And I think the answer to that question is, number one, if you don't have somebody that's already in the industry, let's just say that it was a public posting for say, you know, CBRE or Cushman, they have a, they're looking for an associate first year. People that don't know the industry, they it's all smoke and mirrors in terms of what the job is like you're you're basically in your first year in most brokerages, you're getting paid a base salary, which is very low. A lot of times the brokerage is you're not making money in the first year, you're you're precluded from making money, obviously, you have to get licensed. But I think part of the the big issue with that is number one, they don't really understand what the what the job exactly is. But then I think the second piece really is the fact that it's a very tight knit industry. And, you know, I think if you got 10 people, that are all brokers from all different asset classes, you know, they would have either either very close friends or you know, prior to joining, or family members that are in commercial real estate. I think that's that's the biggest thing.

11:06

What about you, Chad? What are your thoughts on that?

11:11

Yeah, I think it comes down to the fact that when people get into commercial real estate, they probably don't have a network, unless someone like Jesse said that they had family or friends that were already in there. But if it's someone just graduated on the university, and they're getting into the industry, they probably don't know business owners, they probably don't know property owners, because it's just the scale of operating commercial, so much bigger. I think that that's one of the appeals of residential is that even if you're young, you're going to know young friends, or you're going to know people that you just grew up with, we're going to want a house. And if you're personable, and hardworking, you'll probably be able to eke out a living in residential a lot easier. But you probably don't know, a property owner who owns a $10 million building, right as you're getting out of university. So I think it's just so much more challenging, making those contacts. And if you're joining a big brokerage, even if you're joining a team, you're not gonna get handed these big leads right off the bat, because they're going to have somebody on the team that's already handling the sizable business. So you'll tend to be getting a lot of those scraps at the beginning that nobody else wants to work on, or things that you drum up on your own. And the fact of the matter. And what I've found with having done this for a while and seen a lot of people come into the business and fail is that what's required of them, prospecting, whether it's cold, calling door knocking, going to networking events, reaching out to everybody they know, and just seeing if they can get some leads from them. A lot of those old school things aren't overly popular, especially for someone that just graduated from university, let's say they did a four year business degree, they would spend all that money, they spent all that time learning all these strategies and skills on how they should be incorporated into business. And then they get plugged into a full commission sales job, or, as Jesse said, a job with a very, very low salary. And they're told to basically ignore all those marketing techniques and finance tips and everything that goes with what they learned in university and start cold calling. That can be demoralizing for someone that just spent 80 grand on university degree. So I think all those things factored in, you don't know people, or you don't know enough people when you first get started. And the only way to actually get those contacts is into a lot of that hard work the the elbow, elbow grease, rolling up your sleeves, and a lot of people just don't want to do it. So it's it's an interesting situation where I think it's a similar type of arrangement and commercial where the top brokers do a high percentage of the deals, just because they are the ones that say, Okay, well, if this is what I have to do, if I have to start cold calling, I have to start Dornoch, you'd have to I have to be a rainmaker and actually drum up all this business on my own, however I do it, the ones that come up with a plan, execute that plan and commit to it for a certain period of time they went out, whereas the people that aren't willing to do that fizzle out.

14:11

Yeah, it's it's not sexy, by any means, right? I mean, sitting there making cold calls all day. You know, a lot of people coming out of university, and this is probably because younger generations, and we're all younger, right? But you know, my, like my sister's generation, right? They're two years out of college, they are even more tech savvy than we were. And we were pretty damn tech savvy, but they always want to find some sort of shortcut or solution to get to the end. And it just doesn't really work like that in commercial real estate. Not to mention the fact that in commercial, there are far fewer buildings, and there's a much steeper learning curve for the industry. Right. So I mean, if I if I have a property owner with a $10 million property, am I going to go to the guy that sell it all the $10 million properties in town or am I going to waste it with this new kid? It takes a while.

15:00

for you to just build up your track record, it's the same on the investing side. But let's let's dive in to what the first year was like, because Chad, you were kind of touching on that a little bit. And I want to hear you kind of compare this to what it looks like in residential, since you have that unique perspective. What was your day to day when you first got started?

15:20

He was a lot of questioning whether he made the right decision or not. As facetious as that sounds, I

15:28

It's, I completely echo that comment that you have about people always wanting to find a more efficient or a better way of doing things, especially in this new tech world. And when I did the one year of residential, I went pretty heavy on Google ads. So I was I was trying to be like the number one on google ads for everything. And at the time, I was one of the only people that were doing it. So it was really cheap to actually get placement on Google. And I did reasonably well that one year, I worked like a horse, and I spent a good chunk of money on advertising, but I still did reasonably well. And when I went to commercial, I was that kid who just didn't know business owners, and I didn't know property owners. So a lot of it was trying to figure out what I needed to do. I cold called a ton without any systems basic, like it was phonebook, I was 2005. Basically, I literally opened the phonebook and just started calling, no targeting No, no idea on how to do it. I mean, it's kind of like the old joke. And you guys could probably relate to this, as well as that. Especially the older guys in this business, they say that their training, when they first started, they basically had a phonebook, put on their desk, and they said,

16:41

come see me after you've made 10,000 calls. And that's just how guys did it. That is what I was doing as well. I also door knock. So I tried prospecting. I had no idea what I was talking about, because what my background was in residential. exactly to your point about the complexities of commercial, I didn't know what I was talking about, I'd walk into a space and strike up a conversation quickly occurred to me that companies or prospects that I was talking about knew far more about the industry than I did. And I'm supposed to be the professional. And they knew far more about what's happened in the area, what businesses just relocated, what businesses just sold, what property just came available for lease, I'd be talking to these companies trying to hold myself out as a professional or an expert in the area. And everybody that I talked to knew more than me. So it was it was discouraging. At first, we're trying to figure out how you're going to make money coming from the residential side where I did reasonably well. Till now all of a sudden looking uphill at this coal task of having to learn an industry that I didn't know, try to make money in it competing against some very, very smart and sophisticated competitors, and holding my breath on it. So it was tough as I basically just tried to take everything that I could any lead anything with a pulse I tried to work with and try to nurture and I did a lot of small deals.

18:10

Definitely a lot of small deals in the first even three years. I would say the first year was like drinking out of a firehose, but it's still extended to your two three, maybe even your four before it really started getting comfortable with it.

18:25

Yeah, Marcus and Millichap still has that same model today. I mean, you you walk into a Marcus and Millichap office and they're like, Alright, here's a phone start making calls. You know, it's an you know what as old school is that is the model works incredibly well for them. Because either sink or swim and you're if you're going to sink you're probably going to sink pretty damn fast. And so in the people that rise to the top that are able to make those cold calls, I mean those agents they crush it. I don't ever want to do that. I haven't made a cold call in years but that's because I've been very intentional about my business and actually we'll get to this later. Chad is Chad is the reason why I don't have to make any cold calls. So stay tuned to hear more about that. But Jesse What about you man? What did your first year look like? So our company the model that they fall it and a few brokerages have this where you have your one is your associate year, sometimes we we will have people that are hired licensed out of the gate, sometimes they need to do their licensing in that first year. What we do is now we do this we didn't do this at the time our it was a like a rotation you go to property management, you go to consulting, you go to office retail, you get an idea of what the different asset classes are like. My first year was like I said, because to Chad's point before, one of the challenges with getting into real estate is like minimum, I would tell people you need five years. You got to give it five years and if you don't at least give it five years you really don't know what the trajectory or how efficient you can be.

19:52

So for me, I was coming from a job that was you know, checking for residential real estate. I was coming from a job that had

20:00

A full salary. So it was like, at the time 25, I think I was like doing pretty well. So basically it was he was giving that up for a lot lower base salary, and that first year, and then you're kind of on the street after that, but the one nice thing with Avis and young that we would do that pair you up with a with a partner of our company, because we're all principle principle loans, so just a senior guy or gal. And then effectively, if you do well in that year, and that partner is actually around, you know, some sometimes these guys aren't in the office, mine was very hands on, he let me deal with, you know, deals from Western Canada to eastern Canada, and like everything in between, so I got a lot of good experience from there. But the reality is, you still have to cold call, right? Eventually, you have to start drumming up your own business, even if you partner with with other individuals or with teams, you got to bring in your

20:55

you know, your piece. It's funny, you mentioned the phone book, like there's a, I don't know if it even exists anymore. It's the Scott's Directory List where we would just go through this thing and just find numbers of business owners and you just call these guys and to Chad's point, like, you don't know what the hell you're talking about the first few times, but but the reality is that in leasing, and even in sales, but especially in leasing, you're talking to an ops person, and owner of a company, if it's a smaller company, ahead of real estate, HR, or CFO. And now, even if they're experienced in commercial real estate, let's just take the leasing front, they're doing leases every 510 years, and it might be a different person that did the last one. So by your third, fourth, fifth year, if you're if you're doing your job half, right, you would have seen much more in terms of complexity and different leases than this person that might be 2030 years older. And that's what I try to tell our younger guys that you build the confidence Don't say things that you know, you you don't know, but in a lot of ways you can you can be just as informed as as an executive of a company because you do this every day, and they don't. So yeah, the first year is a challenge. But if you really want to

22:05

try, you're you're throwing your hat with this industry, I think you really have to give it five years. That's the bottom line. We look around and we see a survivorship bias. They're like, Oh, do you want commercial real estate make good money? It's like, that's, that's the those are the people that are left. And I think that's like in a lot of industries. Yeah, like, what's the average? You know, would you take into account all the people that do it for one year make zero and disappear? It's It's a brutal industry, but, you know, it's, it's, I like the fact that it's sink or swim very quickly. You know, I,

22:39

when I when I first got started, I was 21. I had like, no overhead, right? So that was one benefit that I had taking a full commission, sales job. That didn't make it easy. You know, I think I made $40,000 My first year, and I was busting my ass to even get that I thought I was gonna make six figures. My first year getting into commercial real estate, I was like, Dude, I sold, you know, $30,000 in a summer selling knives like I can, I'll crush it commercial real estate. And that couldn't be further from the truth. Because like Jesse was saying, like, it takes three to five years, every single, like senior broker that I talked to when I first got into the industry. Every single one I talked to said it takes three to five years, three to five years, three to five years. And man that first year was me cold calling, you know, because I was fortunate enough to just be given a 550,000 square foot shopping center to lease. And, man, I can't imagine what some of these corporate real estate groups thought when they heard me calling them being like, yeah, I've got 20,000 square feet for a lease here in Hendersonville, Tennessee, you guys aren't in here, you should take it, but not knowing anything else. That's all that I could talk about. Like, I didn't understand what triple net really meant. I didn't understand anything about any of the other lease terms or delivery conditions. But you know, my, my boss was kind of just threw me into the fire was like, you know, go knock on doors and make cold calls until you find somebody that wants to take space, and then I'll show you how to do the rest of it. I was like, Okay, I guess that's just what I do. So yeah, I always tell younger guys getting into the business now. or really anybody getting into the business, if you can find somebody that you can just shadow and learn from them pick up their scraps, but shadow them as much as you can. You will cut that learning curve in half. And you know what, why touch the stove when you can hear from somebody else how hot the stove is. I mean, it's, it's it's tough. Those first couple years and I'll tell you this, my second year, I made 40,500 So I was a college dropout. I thought I was gonna be making six figures my first year. My second year all of my friends are graduating with college degrees and here I am making 40,500 I was like man, I've made the biggest mistake of my wife I thought

25:00

dropping out of college, it's gotta be a good move.

25:03

Third year made $120,000. So that three to five years really is true. And it's just it's got up from there because you just don't know anything when you get started. I mean, that's the thing that I think it took me a while to understand. Like, I knew I didn't really know anything, and I had to read books. But damn looking back now. I'm like, Man, I knew absolutely nothing. I didn't know anything. Two, three years into it. We've got a couple of people in the live chat. I want to bring these Edie Dodd is saying, I'm just trying to figure out where to start while you were in the right spot, because that is exactly what we are covering today. Let's see Casey. And Brad, the middle of breaking into commercial full time. Congrats. It's pretty exciting. I've failed forward and yet found a good mentor to protect my money on the deals. Where's the good place to find NDA and contract templates?

25:51

I would go to what's that? What's that Legal Zoom, Legal Zoom is probably a pretty good place to start. I mean, I am not an attorney, I can't give you legal advice. I typically recommend getting an attorney to draft all of this for you so that it is specifically catered to whatever deal that you are working on.

26:09

But those are probably pretty good places to start. I think you can find templates online. If you've searched like free NDA template, every single NDA that I have ever gotten was clearly something that somebody just ripped off online.

26:21

So

26:22

what about your subsequent years? I mean, how did after after your first year you guys were thrown into the fire? You know, you were you're kind of pushed into

26:32

learning how this industry worked? What did it look like in years 234 and five for a chat I'm going to start with you if if you're still with us your videos frozen

26:44

Yeah, hopefully the audio is not either. It's funny because I'm the lower rep has

26:50

nothing. Yeah, we can hear you. Yep.

26:55

Okay, yeah. Not frozen on the lower left hand section, but on the middle it is so just cut me off if if I lose audio too. So I I started oh five I started picking up steam over those first three or four years and then before we knew it, we were in the Great Recession 2008 to 2010 Give or take. So I would hope to have had my legs under me by that point. It just so extent I did. I started having some repeat clients and why instead on buildings that I could do the leasing on, but that great recession was not fun. So I would say that that probably set me back another two years where I still made enough to, to have some money but not where I would have expected much like yourself and your year two, I would say that things started improving pretty significantly in 2010. Right as the great recession ended, started just making significantly more in brokerage I was able to squirrel away some money so that I was able to join as a partner at the firm and then I started building my own portfolio of properties as well. So starting in 2014 with with a few partners we basically have been buying one industrial property a year we've got a portfolio of about 160,000 square feet right now. So that's all on the back of brokerage was I didn't inherit a bunch of money I didn't have some stock that 100x that I could do I built that portfolio and my lifestyle now solely on brokerage so it Yeah, I would say by the taking out the Great Recession which was painful, I that five years is spot on. And I mean we're probably going into a cycle right now which is going to be probably similar to 2008 2009 in some regard. So I think people need to brace for that. But if you're willing to put in the time and commit to it and and see it through and do all the things that people are telling you to do you and watch what successful people have done there's a tremendous amount of money that can be made in this industry.

29:01

Jesse What about you? Yeah, so first I'll say on the the comments in the chat if anybody wants direction on how to get started. Sure you can you can look up my Amosun young email Jessie dot Ferg Alia Davison young I'm happy to help you guys out we have like 84 offices in North America so if I can help anybody out I'm happy to do so. Your your contact information should be in the show notes below too. So okay, check that out. Yeah. In terms of your two to five is it's interesting like to me i i compare it a little bit to to golf I feel like half the reason guys continue to play golf is because you know you might not have a great round but you got a couple birdies or you have a new shot that like yeah, you know what the back golf and and you have a bad game and then you have a couple like, like brief moments of what you think is, is is amazing. And I think that year two to five was like that in that

30:00

You might not have had like the banner year, but you had say a significant deal, or you did like, you know, a large transaction. And those little things start adding to your confidence that you know what if I can, if I could get a few more of those and get some momentum going. So I think like for me, you know, just going off memory, the two, I know that between that two and year five, there were a couple really good years, but they weren't, it wasn't, you know, a lot of brokers will have, like, you know, then this year, your income goes up, and then you know, just slowly keeps going up. It can be spotty. And that's why it you know, this industry is probably not for everybody, it takes a certain type of individual, but after a while you do start building that momentum. And that's what I meant by year four, and five, I think at that point, you know, you start seeing consistent income. And if you put the pedal to the metal, you know, you can toggle that or back off. And you can see it too, when especially in our industry, if you stop engaging in continually, continually developing business, you'll start seeing commissions fall off. So yeah, I think that that was the takeaway for me that it wasn't one significant year that I was like, Okay, this is the industry, it was just these different, positive things that you thought you could never do in maybe your one and year two that you're actually actually doing. And that kind of keeps that confidence going. Oh, yeah, the thrill of the deal, man, the real deal junkies. Yeah, there's just something about getting that deal done. Even if it's like a $3,000 commission, you know, I still get excited about it. Because I'm like, hell yeah, we got it across the finish line. You know, I,

31:40

I'll never forget, like the first time I made $50,000 on one deal. And I was just like, Man, I made more on this deal that I did my first year. You know, it's, it's, I couldn't have done that without having put in all the years of work and education, all that kind of stuff.

31:59

But it's the only thing. I was gonna say the only thing more shocking than that is how quickly how quickly it goes. Yeah, that's, that's the other thing, I have always treated my brokerage as my basically like my investment income, I pull, I try and live as frugally off of my brokerage side of things as I possibly can. And just reinvest all of that into into real estate, because you're right. I mean, it's, I see so many guys that are set in gap, maybe gals that are 7580 years old, they're still doing these, like small leases, and, and it's because they blow all of their cash throughout their entire lives and never invest anything for me broke, which was always a stepping stone, I looked at it as, hey, this is a great opportunity for me to learn this, get enough cash to start investing so that I can then build the wealth in the future. And it'll always be something active that I do. But like, I don't want to have to go show a 2000 square foot retail space when I'm 55 years old. I bet. You know, I want somebody else doing that. For me. It also, I think this is one of the industries where you mentioned before, like you see, you have two people that both made 300,000 In one year,

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the positive piece of being paid not necessarily weekly, like that 300,000 and brokerage that could have been all in one deal. That could have been four deals, it could have been multiple, where you have opportunity in that way to you know, you get a big commission check. And then at least for guys like us that invest in real estate, we can say okay, I'm allocating 2030 80% of this specifically to an investment. And I think you're absolutely right, it's still kind of mind blowing, to me that the commercial real estate industry is not like is not dissimilar than any other real estate. There aren't that many real estate investors. And you know, you'd think the exact opposite because you're in brokerage you should be investing. Now, there's definitely more than the average but from what I've seen in my experience,

33:56

and you know, brokers that I've talked to, it's not it's not like every guy and gal in our industry are investors. Uh, well, it takes a you know, different individual.

34:06

That's right. Are you guys comfortable sharing your your biggest commission checks ever?

34:12

If not, you could say so. But I think that'd be an interesting thing to cover. And I'll start I'll kick it off. I mean, you know, I've collected checks, no kidding, as small as like two or 300 bucks. I mean, because you there, there is never a deal that you should ever be above. I mean, I tell my team that right now, especially with where the market is, I'm like, You have no idea where we're headed into like I would do every deal. Now there were times where I got to a point where I was just turning business away, say no, it's not worth my time right now. But you got to be willing to come back to it. I mean, the largest commission check I've ever gotten was about $240,000.

34:46

Now keep in mind, this was two years ago. So I've been in the business for eight years. I had been networking for eight years. I had gotten to a point. You know, we listed I think it was a eight and a half million dollar property and I got

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About 3% of that. And, you know, I still had to work my tail off because that was an incredibly complicated deal was a weigh in deal.

35:08

And I owed 100% of my brokerage so I got to keep 100% of the commission, but there were still costs involved in it. But dude, I mean, there's there's no better feeling than that, you know, cashing a $240,000 check. But, man, there are times where I've had plenty of really big deals fall apart after six to 12 months and make zero audit. So you almost have to average it out. What about you guys?

35:33

Yes, so the from the kind of like, I guess for people to understand different brokerages work differently. One of the big differences between residential and commercial is the splits, right? Usually commercial real estate, if you're working for a large company like CBRE or whatever JLL you're on a sliding scale typically. So up to say your first 250,000 might be 5050 that you keep in the brokerages keeps and then as you get to like a million, you might be keeping 70% of that check. So for us, I think the largest in in like gross before splits with the company, it was probably close to a million. And, and it's like even deals that we're doing right now where one thing that's gone up, if you know with everything going on with the lockdown is fees for leasing, I don't know if it's translated to the purchase side, but for instance, a 50,000 square foot 10 year deal before COVID would be $1 per square foot per annum as a commission. Now we have so that's $50,000 times 10 years, okay, $500,000, we have now bonus fees that are like two bucks, three bucks a foot, so you know, two, three times that amount. So it are at least in our market. It had been at that dollar for a long time. different markets do it differently. I know New York is more of a percentage situation. But yeah, I mean, there's definitely there's large, they're there. I think during this period, if you can get into the industry during this period, I think there's a lot of money to be made in terms of commission. And there's one thing I told my

37:02

one of my partners, I said,

37:05

in our industry, we're like traders on the leasing. Front, where commercial real estate might take a hit on the sad office purchase side evaluations, but leasing, all we care about is that deals are consistently happening. And if that you're telling us that now supply is shrinking in our local market where we use sorry, supply is higher, but in our market, the vacancies are higher. So there's actually we can do deals that I think there's commissions out there, because we went through a long period in Toronto, where we had one 1.5% In some markets vacancy. So it's like even if you had a client, you might not be able to find them all.

37:45

Yes, it's crazy dude, a million dollars. That's that is absolutely insane. I can't even imagine what y'all went through to pull that deal together. Because, I mean, if you're not in the commercial real estate industry, the clients that are doing deals at a million bucks. They're they're really big corporations, typically. And there can be a lot of drama involved with that sometimes. I'll just say it was not as I don't have gray hair yet. But I feel like it's it's sprouting underneath just because of that deal. But yeah, I mean, another thing people have to remember too, is like, you guys all know this, you know, you get say that 250 Or you get or whatever a large commission check. It's not, you know, sometimes it's a very quick deal. But most times you're working on these deals and cultivating these relationships for years. No, yeah. Yeah, I mean, that deal that I closed, I had known that owner for at least a year, maybe two years. And then after we ended up listing the property, it ended up taking probably three months to get it under contract, and then another 12 to 15 months for it to close.

38:49

So Chad, what about you?

38:53

It's so interesting, this business where it's not even, always just one deal. So we'll call it commission for a million dollars, but there's scenarios where a company might sell a building, and then they have to go and buy something, or they decide to lease something. So we've done several transactions that have been hybrids of that where they sell a property and then you help them and I'd be in between the two of you guys on some of the larger deals. One One that comes to mind, and this is the most shocking statistic that I've I've heard, because people don't really have a good sense of how much money is possible in brokerage. So I like to use Bob Knakal who's JLL out of New York is a good example because he's published this publicly. Is that his best year and I believe it was 2014 He made $18,750,000 one year of commissions. Wow, that's just a staggering amount. Like I can't that's I couldn't even fathom that like that's, that's CEO money. That's professional

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Basketball player money. And he's been doing it for I think, almost 40 years now. So he's top of the food chain, he's, he's best of the best, I would have to think that he's the top producing broker over the last 40 years. But that money is out there. And I think that that's what surprises most people is that maybe they look on glassdoor.com are one of these websites. And they say, Well, how much can a commercial broker make, and maybe those websites say 60 to 70 grand, because they don't really know this information isn't publicly with the exception of Bob, with that one magical year out there, this information isn't public. And the top brokers aren't going around dunking on everybody by saying how much money that they make. If anything, they keep it very, very discreet. But it's it is out there. Like it's, I would think for a broker, that's five years in the business, they've got to be making 200 grand a year, they just like minimum absolute minimum, otherwise, they're probably not even going to have a spot with their brokerage any longer. So like that, those are like the that's the floor and what most brokerages would expect a broker five years in the business to make, and then it goes up from there. I don't think many people are going to reach Bob Knakal levels. But that's somewhere between 200 grand and 18 million. That's that's the ballpark and where someone could be. Yeah, I think that's guys. I was just gonna say like, you know, the target for a lot of younger guys in their 30s. And 40s is like doing million a year, like, or, you know, mil and a half year where like your saying that, you know, maybe it's not top 10 hockey players, but you know, you're you're a professional in terms of that income. And I think the Yeah, the with guys like Knakal and stuff, you know, there's definitely the ability to get up to higher amounts, but I think to for to just add to Chad's point, it's 250 to 200 Probably Probably a good ballpark. Because usually what happens in our industry is that as you get to your three, four and five, you have landlords that start trying to pick pick you off and have them be your their leasing managers or their leasing directors. And that's usually around that, you know, they're offering 175 to 225. And that's where some brokers leave our industry because they they weigh the, you know, say that you had a couple of kids, you have, you know, more of a guaranteed income. And then other ones, they're past that point and they don't want to they want don't want to go backwards on the income. So I think that's probably pretty accurate.

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Yeah, I would agree. I, it's, it's interesting to me, because it all just comes down to how hard you're willing to work. And that's the thing that I really love about commercial real estate. I mean, one of my guys he just started last year zero experience in commercial real estate, but a hell of a salesman and has no problem knocking on doors I kid you not he just went up and down one of the corridors here in Nashville, knocking on doors and talking to hotel owners and put a $9 million hotel under contract is one of his first deals. I mean, his commission on that will be in the six figures. And you know, it's just cool to see that because, you know, as a broker, like I tell my agents all the time I'm like, guys, all it takes is just going out knocking on the next door you you never know what's going to happen. And sometimes, you know, deals like that fall out of the sky, spigot which if you guys ever had commission fall out of the sky, I had a deal. Gosh, this must have been two or three years ago, where we had negotiated a lease on a property that I have listed. And the tenant ended up negotiating in the lease a purchase option. And so we got paid Commission's on the lease, and then two years later, they executed their purchase option. And I got like a $90,000 check in the mail one day just because they decided to exercise that and you know, when you negotiate that kind of stuff into a lease, you're like yeah, this will never happen whatever blah, blah, blah, moved on, forgot about it. And then that just fell out. I was like, yeah, that's that's the benefit of being a commercial real estate for a long time.

43:57

You had no I'm still looking for that one. But those ones are the

44:01

Yeah, man, it makes you like really don't know if I'm going

44:07

Yeah, go ahead chat.

44:11

Delay is killing us here. Sorry about that. I don't have that I've been adding. That wasn't all arranged. But some properties if we have the whole building listed, even if the tenant renews their space, it's not uncommon for us to just get a check for those the renewal on it even though we didn't do any additional work. So there's, there's one comes to mind for a couple of years ago. I didn't talk to the tenant whatsoever, they did a renewal directly with the landlord and we got a $30,000 check on it. So similar type of situation those, those are the rewards you get for bearing through the tough times in this business.

44:50

Like we need to always remind our landlords,

44:54

that was exactly what I was gonna say, because it's the best landlords that do that.

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The ones that understand how this business works because they the first lesson I ever learned when I got into commercial real estate, but the developer that I worked for told me, he said, I will always pay a broker's commissions on every deal. I don't argue it. I don't, you know, it's like, arguing with your tattoo artist, right? Try to try to get them to, you know, charge you a cheaper price. It's like, man, you're gonna have that permanently on your body, you sure you want to try and negotiate that? It's the same in brokerage because these guys are out there banging down doors, and representing all the tenants and you don't ever want even just one broker to be like, you know, what, I'm actually not going to show that landlords building because they're probably going to try and stiff me on the Commission's and I don't want to work with them, you know, stuff happens all the time.

45:45

Yeah, yeah, I think there's a lot of discretion when, especially in a market where you have, say, 30 options, you can rest assured that the most brokers not gonna gonna go through the brain damage of taking you to every single one. And part of it is is just because they like you hired them to get these down to your requirement. But yeah, 100% I think we have some landlords that in our market, were very anti brokerage. Sorry, the market prior to COVID, we're very anti brokerage. And now we're the cheapest, the cheapest game in town, because you don't have to hire employees to lease their space. So, you know, it is this is market, it goes up and down. And I think that's just a good lesson, in general to do to be just just have whoever you're dealing with that deal with fat with integrity. And, and yeah, you don't want to burn bridges. Yeah, let's, let's get into some advice for people, you know, looking to either break into commercial real estate or grow as a commercial real estate broker. The first one I want to start off with is creative ways to find clients. Chad, I kind of teed this one up for you earlier in the show. But you sit me down a whole different path than what I thought was the way to go. And commercial real estate brokerage tell me about the creative way that you found to, to start finding clients.

47:07

I would say it was a bigger, bigger process than just any one individual thing. But similar to how when I was in residential, and I was trying to exploit the lack of people putting stuff on Google, I saw an opportunity to just put more of an online presence for commercial real estate. And even fast forward to today and 2023, there's still very few brokers out there who add value add content, there's a lot of self serving posts, and you see it on LinkedIn, you see it on Twitter about a property that was just listed or a property that was just sold very self serving content. And I decided I wanted to put out huge value add content with no purpose whatsoever, other than to add something of value to whoever read it or watched a video on it. So I started blogging in 2010 2011, maybe, and I just committed to writing an article every single week of something of interest or something that would be entertaining or educational for someone. And I did that every single week for five years. And then in part of that you start getting content that you can put on social media, little teaser clips, or, or just little excerpts, you could send out to clients, I got picked up by the news quite frequently. I think at one point I did 20 interviews with national media. And then I was fortunate enough to write some articles that got national press. So that's how you and I actually met in the first place was writing one of those articles. But that's, that's all part of the bigger system of, you've got to find a way to get your phone to ring that's that's as quickly and easily as I can distill the whole process down to is that you've got to find a way that people will reach out to you. And you can cold call people and you can do an art, you can have an online presence. And you can try and do that outreach. But unless people actually calling to you to list their property or to show them some properties, you're it's futile. So I think that that's the easiest thing that I can say is people need to find a way to make their phone ring. And that online presence was one player on the football field. I wasn't the only player that I had, I was still cold calling and I was still door knocking I was still going to networking events, still reaching out to past clients. But that online presence was something that's rated me from a lot of my competitors who did none of that at the time. And we're starting to see more and more people get on which like video is slowly starting to creep up. You've got an awesome channel you've done really well with in a space where there's very few people doing it. I think as time goes on, more and more people will see the value of putting out content like this, but that I

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looked at it as a way to just exploit something that no one else was doing. And I benefited from it. But that wasn't quick. It wasn't writing one blog article and then listing a $10 million building the next day, it was five years of login or every single week. Yeah, it's like making the cold calls, right? That one cold call is not gonna get you a deal. But 100 might, or 200, might I? Yeah, I mean, Blue Ocean is one of the most impactful books that I've ever read for me, because it talks about exactly what you're saying, Chad, right. It's like fine, the ocean that is open and has zero competition in terms of what else everybody's trying to eat, and just go eat whatever you want there. And so, you know, that's, that's exactly why I got into YouTube and all that other stuff. Now, Jesse, I know, you've done some some interesting things as well. I mean, I think you were the first person to start doing commercial videos for bigger pockets for their YouTube channel. But what other creative ways have you found for finding clients?

50:57

Yeah, yeah, they, I mean, that was just an inquiry of, hey, you guys don't really have commercial content. And it just coincidentally, they're like, we're looking for somebody to actually do commercial content. And I was like, Okay, so that's how that happened. And that was great. I mean, they, they pay their like, contributors, a very small amount, but that wasn't really why I was doing it, the fact that I was getting anything was, you know, as you guys know, it's, it's a bonus. But in terms of

51:22

brokerage, I would say this, I was at the end of the day, and this is where it comes down to some people, you know, the personalities really gel with this industry, and some maybe not so much. You don't have to completely, you know, put all of your life on Instagram or online. But one thing that I recommend is that we all have, we have, we all have things that we're passionate about that don't have anything to do with real estate, whether that's, you know, some people cycling, whether it's, you know,

51:48

tie the, you know, guitar, you know, you play, whether you're, you know, I'm big into cars, like you have these passions that you that you naturally have, and the people around you that also are passionate about those things, you can build a level of trust in a shorter period of time, that would take you years to do in a professional setting. So I think for individuals that that are in our industry, you know, whether that's, you know, joining, joining a club, or whether that's, you know, maybe something less formal, in your community, in those things that you're you really enjoy doing, I think that, you know, those type of things are great for for income, like we have, you know, we have a lot of guys, especially in Canada, you know, in, in hockey, and what a lot of these older brokers realize is, you know, their son, or daughter start playing competitive hockey. And now the parents in that kind of whole crew, it becomes this cycle of, you know, connecting to people that, you know, obviously, if they're playing competitive hockey, they've built up businesses or you know, they're just potential clients. So I think that's kind of my, my hack is find places and groups that already have something that you really enjoy. And then selling is, is really, it's not even selling at that point out after if you can help them in a professional setting. Yeah, that's exactly it. I mean, I joined a group earlier this year, and never, I mean, it's one of those groups where everybody is pretty high up in their company, if not business owners. But it's you join with the understanding that like, we're just getting to know each other and go through this experience together. Nobody is pitching anything. And after having gone through that group for a year, one of the guys reached out texted me said, Hey, I need 100 250,000 square feet of industrial space, you know, can you help me find it? And I never was, like, ever talked about, you know, hey, we do this, like, Hey, let me help you do this. You just get to know people. And it naturally comes up. And he says, hey, you know, what do you do on commercial real estate, we help people, you know, buy buildings, and he's like, oh, cool, I need to buy what at some point, let's talk. And it just becomes this very natural thing instead of and then they want to work with you. You don't have to worry about waiting the client because you've already got a relationship with them. I think. I think that's that's the best way to do it. Let's talk about educational resources. When I was first getting started. As a commercial real estate broker, there was like, nothing out there. I think there were two podcasts one, I think it stopped running for, you know, several years at that point and a few books on, on Amazon. But, you know, I think the barrier to entry is so big because

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people don't know where to start with their education. Like how do I learn about this industry? So you know, what books or podcasts or other resources, even classes? You know, have y'all taken that you would say we're incredibly impactful for learning about the industry? Shadow, we'll start with you.

54:43

Yeah, one that I did early in my career and would have recommended it to everybody who asks is the CCI M Institute. So I actually gave up my designation this year, but I had it for 15 years and the education is World

55:00

class, I think there's so much that especially someone that doesn't have a finance background that they can take from that program. And then if you pursue the road of getting your designation sends to the market that you've, you've done the work and you've put in the commitment to earn that designation, I think just signal signifies a level of professionalism that otherwise might be challenging to get out. That's a great organization. Even if you just take the CCM 101 course, that is a great introductory course to real estate, commercial real estate specific finance. And I along the way, I've I still, to this day, consume a lot of content. So I, pretty much every day I'll check out globe street or Chieko biz now, I'll check out red X in Canada, just to see what news is popping up. I read a ton of brokerage reports, even ones that aren't my own brokerage, I've read Davison reports all the time, CB puts out a ton of great reports that are not just specific to each individual market, but more in a country or even global context. So I actually read now more than I did when I first started. And I think that just speaks to how complex this industry can be. And if you're not keeping on top of these things, you can get left behind pretty quick. So I I would say be a sponge, just try to read anything and everything that you can.

56:29

The more you can read, the better. And you'll start seeing that there's a lot of echo out there as well, like a report that JLL puts out might be very similar to a report that CB what's out or vice versa, and you'll start seeing a lot of trends. But that's that's what I would say is looking to see Sam great, great resource, great education, and then just try to read as much as you possibly can on the industry. Yeah, I echo CCIE am I'm finally going to get my or take the test I guess in Seattle in October. I finished my classes like two years ago and it took me probably four or five years to take all of the class there's only four classes but man you got to dedicate like four days out of office and that's tough. And it's usually not in your market you've got to travel for it. But couldn't couldn't recommend that that system anymore. Jesse What about you? So on the CC I MPs there's a book called brokers who dominate I think it is raw rod Santa MASSIMO Yeah. So that one's like it's a it's a decent book, it kind of shows different agents in different markets talking about their experience, I think one of the first books not, not the first books I've read, but the Peter Lindemann book, which is it's not necessarily about brokerage, but it's real estate, finance more of a textbook, I'm actually having him as a guest for a second time on the podcast. And that's a great book to just kind of understand how commercial real estate is valued. And I think that's that really will help you on the educational front to Chad's point, the CCI n if I see if we're interviewing associates and ICSI AOR CCI M courses even that alone, you know, as as bad as it sounds like I'll take that over some degrees if I know that you've gone through that because you're going to be ahead of pretty much every other associate that comes on in terms of the specific

58:23

commercial real estate type of courses and the other thing too in your first year you know, we didn't talk about it this industry is an acronym soup, right like you have so many different shorthands for different words that even going through the courses helps kind of help that learning curve that you kind of understand the way we talk the way we look at deals and I think it's great to take those courses it at least shows me that you are investing into into the industry so if I'm putting on like the hiring cap

58:55

I love it Well Jesse go ahead and plug the podcast in chat I'm gonna let me give you a chance to do that as well and your end because we had somebody jump in the live chat asking about how to learn more about industrial real estate. And obviously you should go watch Chad's YouTube channel but Jesse tell us tell us more about the podcast. Yeah, you can go to a working capital the real estate podcast Spotify Apple wherever you listen to podcasts and if you type working capital or even my name into YouTube, you'll see we have a select amount of them that we put up for actual longer form content so check that out as well. Love it Chad

59:30

Yup, mines YouTube channel and podcast as well. If you just go to search my name, search industrial real estate or the handle is at industrialize, you'll come across my channel and well over 300 videos now. So it's kind of crazy the library that's accumulated. Yeah, well, the man it's funny looking back on it now because you and I started our channels around the same time. I think we're both at about the same amount of videos. And if you had told me three years ago that

1:00:00

We'd have over 300 videos on our channels I would have been floored because I don't know how I could possibly talk about commercial real estate that much, but here we are. Couple years into it. Well, everybody, thank you for joining us today. I hope that this was pretty helpful for you and gives you a better understanding of how to get started in commercial real estate brokerage. Be sure to check out chat and Jesse's channels and we'll be back with you guys here in a couple of weeks. I cannot remember what the topic is off the top of my head, but we'll have one for you. And it'll be a great time. So we'll see all that.

1:00:30

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 on how to confidently buy your first commercial property today at www dot c r e launch pro.com