January CRE Brokerage Business Review with Logan Freeman

In today's episode, Tyler Cauble and Logan Freeman discussed starting a new monthly podcast segment to review their commercial real estate brokerage businesses, including January sales numbers, pipeline deals, goals for the year, and more.

Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Launch Pro: www.crelaunchpro.com

Key Takeaways:

• Tyler and Logan started a new podcast segment to discuss their brokerage businesses each month for accountability and to provide insight into running commercial real estate businesses.

• Tyler's brokerage did $1.35 million in sales in January, lower than their quarterly goal but they have $56.6 million in active pipeline deals.

• They track metrics like leads, active deals, pipeline value and sales in Hubspot to monitor performance.

• Logan's brokerage aims to do $55 million in sales this year and has $23 million in active pipeline deals to work towards hitting their goals.

About Your Host:

Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker 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. My name is Tyler Cauble. I'm your host, as always, and I'm joined today by Logan Freeman. And we're really excited to be bringing this this new segment to you all. You know, when I

0:40

I guess we got some feedback from the audience from the YouTube channel that they would like to see kind of what's going on in the in the business side of what we're actually doing. And I figured you know what, that's a great way for me to get accountability from every single person that's in the audience. And I pitched the idea to Logan, I was like, hey, you know, what do you what are your thoughts on this, and he said, I love it, I want to do it with you. And so here we are, we're going to be diving into our brokerage businesses every single month, and talking about our goals, how we're gonna get them, and you know, our wins and failures every single month. So, Logan really excited to be on this journey with you, man, it's gonna be a fun year doing this. Yeah, it really is. And, you know, since starting in 2017 2018, there hasn't been really a similar year to the prior year. So it's interesting to watch, and be a part of the changing commercial real estate market, especially on the brokerage side being on the brokerage side, and the principal side gives both of us a unique perspective on on these, these investments and the market as a whole. Because, like, I mean, we were seeing what things are trading for on the brokerage side, we know what we would like to purchase and at what price points, when that matches up when when it doesn't, you know, all these reports that everybody reads, those are all you know, those are all kind of rearview mirror looking in being. Brokers allows us to be forward looking through the windshield and understand where the market is currently where it's headed. And I think that's extremely important. But it's also a very different business in the sense that you're not really making investment decisions, you're helping clients to position their properties or find a new property to purchase. So it is a different skill set than then there is on the development side and or the principal side. But I think that both of us have found a one, we both started in this spot, right? I mean, we started in this kind of industry. And that's how we got our start. But it also allows us to have a different perspective and vision on the market and where it is headed. And so I'm excited for this, because I think that a lot of people try to get in masterminds and different things. You know, business coaching, and I fully agree with all those things I am in masterminds, I have coaches, and things like that. But those things are kind of in a an on an island by themselves. And when you decide to put something like this out to the universe, and you say you're going to do something and we're gonna sit here and, and review things every single month, it kind of levels up the accountability, and also gives the audience a different view into both of our our lives, how we're thinking in our businesses, because we're not just playing an investor here, we're playing leader, we're playing business owner. And that's very different than just directing investment dollar. So excited to see kind of how this conversation goes and and how the process goes. I did something very similar. Back in 2021, or 22. I can't remember what year it was, it was the compression podcast. And I had one of my curfews Come on. And my goal was to do $100 million in real estate transactions that year, you know, and previously, my top year had been around 43 44 million and ended up being at 97 million that year and documented it weekly on that podcast. So it was a really interesting, you know, process and, and a lot of people gave really good feedback on. I love that I'm gonna go back and listen to that whole podcast as we're going through this year. That's, that's a great reminder. That's the again, that's the compression podcast. Check it out on Apple, Logan Freeman. And it's a it's a great podcast. I mean, I love that you were doing that. I thought it was so cool.

4:35

Yeah, it was a lot of fun to get somebody's perspective on what I was doing on a regular basis. And just like I said earlier, just staying really persistent and consistent with that brought a lot of accountability to that and I had folks that I had no idea were even listening. Say hey, man, I see that you kind of stopped on the compression podcast and you're gonna come back and I said, Look, I used it as a tool. You

5:00

You know, in a in a period of time in my life,

5:03

but it was it just made people realize that, you know, that person talking to the microphone is real and human and, and has trials and tribulations and all of those things just like everybody else does. And so there was a different type of connection there because I wasn't necessarily the thought leader in that space, I was kind of getting coached, right, and talking about the challenges, and everybody loves a good challenge and a story about how you're going to go about to try to, you know, accomplish your goals. That's right. Yeah, I mean, like you said earlier, you know, most of y'all probably know us on the investment side, you know, we're going out raising capital putting deals together. And both got our starts in brokerage, and I will always have a soft spot in my heart for brokerage, there's just something thrilling and fun about putting deals together and getting them closed. And that's, that's pretty much what you're gonna be in store for, if you're gonna, you know, follow us on this journey, as we do these these monthly business reviews. Because we're going to be telling you, you know, Hey, how are we going to hit these these targets? How are we bringing in clients? How many leads are we getting? How much revenue did we close, I mean, we're gonna, you know, open up the kimono, so to say, and be really transparent, which, you know, is, of course, very uncomfortable in a lot of ways. But at the same time, no one else is doing this. And I feel like when I was starting my brokerage, if I could have had a podcast like this, which, at the end of the day, you're listening to, essentially a two person mastermind, right? We're sitting here, I'm going to tell Logan, what's going on in my world. He's going to tell me what's going on in his and we're going to talk through strategies, and things that we can be executing on in order to hit the goals that we have for this year. So it's gonna be it's gonna be a lot of fun. Wogan. Do you want to kick it off? First? You want me to kick it off first? Yeah, no, I'm happy to Tyler. And what I thought would be helpful is just to give kind of an overview. I think our brokerages are similar. But we also have different things that we both focus on. And so our brokerage exchange, commercial real estate was started. And it's called exchange because we were focused on 1031 Exchange it, you know, and I've always been on the acquisition side, even on the brokerage arm of the business. And so our first year, we did close to $50 million in brokerage 100% was by side brokerage, and that's very different and unique in the marketplace. Because I found kind of a niche where I thought that, you know, if somebody was looking for a property in Kansas City, and we could help them put together their team that they needed, right, and so I just poured into that, well, you know, that was 2021 2022 comes around, and we say, man, we got a lot of opportunities to list properties. And we didn't have systems, you know, we didn't have processes, we didn't have any SOPs in regards to listings. And we ended up doing, you know, 5050, you know, the last two years 50% on the buyer side and 50% on the listing side. And I foresee that to continue on in that nature, because during those periods of times, you know, 1031 Exchange is kind of dried up in a lot of ways, especially last year, because, you know, what we're seeing is people weren't selling their properties, because we're, you know, the dislocation was in the marketplace. And so, but what we do now is typically will help a first time buyer that has a 1031 exchange, find a property that's either listed or unlisted on our off market database. And we have built a platform with about 25 to $26 million of off market deals. And we have a sales process that we take these buyers through to say, look, you know, we're going to do a mock transaction, before you get under contract for your for your first deal. So when that stress level comes, when the inspection report comes back, or the insurance comes in higher, or, you know, the, you know, whatever happens, the lender backs out that we have Plan B, Plan C, and we can go execute on that. And that strategy has been very successful to help people deal with stress and I know people say commercial real estate is less stressful and less emotional than residential. A lot of ways let me tell you, there are a lot of emotions that and and what I call egos that get in the way of these transactions. And so, you know, this year is a big dip is a big growth year for us on the brokerage side, not just from the volume standpoint, but I don't have that many brokers. The last couple years, I've had one and a half brokers and myself and one brokerage coordinator. We have added a few different individuals. So we'll have probably by the end of the month we'll have eight full time brokers at the at the business and each one specifically working on a different niche and one thing Tyler I want to hear from you sometime on the podcast is how you go about carving up the world in regards to geographic location.

10:00

issue size of transactions, all of those different things because I'm sure you can give me some insight and how to set my brokerage up in the right way. But right now we do multifamily listings, typically one to three and a half to $4 million. And we do buy side anywhere from 500k to $2 million.

10:19

We are getting into we brought on a gentleman who's who specializes in healthcare, real estate. So he focuses mostly with dentists and orthodontists on finding their new building and or renegotiating leases, we have a newcomer coming in, that's going to be working with buyers, we have a part time guy that's kind of a support guy that helps on the listing side. And we have a really experienced broker coming in 10 years of experience to focus on larger transactions, as well as someone who is focusing on sale leasebacks with owners that can be potentially investors, but also looking at the real estate, maybe it's an industrial building, maybe it's an office building and saying, is your real estate holding you back? Or is it propelling you forward? And what I found is, we have plenty of big brokerages in Kansas City, people that do the, you know, 200 plus multifamily units, properties. And that's not really what we're trying to focus on. We really like the niches and we'd like to focus on trying to be different and having some unique value proposition that serves a need out there in the marketplace. Our goals for this year are to complete about $55 million in transactions. So that would be a great year for us. I think that we're going to be able to do that it's been difficult the last couple of years to forecast, you know, pipeline and different things because let's let's face it, I mean, we're we don't have control over a lot of the variables in these real estate transactions.

11:49

But our mission statement is very important. And we typically go off of Gino Whitman's book traction and the EOS system. So Entrepreneurial Operating system, our vision and mission statement is to be the best in class tech enabled investment real estate advisory platform that streamlines the client's process of buying, selling and managing investment real estate using tax advantaged strategies. So that's kind of our mission statement for our for our brokerage that's evolved a little bit, the tech piece is one that I'm highly interested in understanding how other groups like rod Santa Massimo and Ryan serhant. I know Ryan is on the residential side. But I'm seeing large brokerage companies really start to utilize artificial intelligence in their brokerage operations. And I think that's going to revolutionize and change the way that real estate is done. But what I'm seeing too, is it's very early stages, mostly just kind of tat tasks that can be automated or something like that through AI. I haven't seen any system. Maybe you've you've seen this, but I haven't seen many systems that really revolutionize the way that the real estate it's done. But I was having a conversation with Barry wolf who's been in the business as a as a single tenant Net Lease broker for 25 plus years, and his team does on a good year 350 million, I think in in transactions on a down year 150 to 250 million, so they're really pumping out transactions. And he said in five years, the way that brokerage is done is going to look completely different. And he didn't give me a whole lot of other insight into what that is going to be. But it's definitely something that I want to focus on. Just go through our core values real quickly, because I think that's important. We're value added, you know, we're trying to be value added to our, to our clients were results oriented, so definitely not looking to be the group that lists the price, you know, for the highest price in the market. It's not really what we do honesty and transparency throughout the communication with our clients, putting the client first winning, you know, I'm obsessed with winning, and I love winning, it's a part of the brokerage mantra is how do we win this being pragmatic, you know, dealing with things sensibly. And realistically being a Rational Optimist, and then being innovative, trying to listen to what our clients are saying. And then formulate systems and processes that maybe other brokerages aren't necessarily doing. So we are a team of about six right now, potentially going to be eight here very soon. Most of those are producers, we have one support person that really does a lot of different things transaction management, brokerage coordination, a lot of the marketing side and then I lead the organization. So not a huge organization, but one that is highly focused on on, you know, producing results. So I'm excited for the changes that are coming this year. And the additional people that we're we're looking to add to the to the brokerage. That's great, man, I love it. I've got a couple of things that I want to dive into based on what you were saying there. You know, at one point you said you were focused

15:00

More on the buy side and sales, then you kind of moved into 5050. Which side do you prefer? Do you like being on the buyer side of the transaction more than the sales? Or is it kind of vice versa, we like to be on the buy side Tyler because, you know, but the listings, a lot of times do drive buyers, right. So you get a listing, you put it out there for marketing, and your pipeline starts to get filled up with buyers may not be the right buyer for that deal. But if you database them correctly, and build a relationship, they may come around on a future deal.

15:32

So with somebody with a 1031 exchange, we just have done enough of those transactions now and understand where the pain points are to really add enough value where they're not looking anywhere else. On the listing side. You know, you don't really control too much, right? I mean, you control the transaction, you've got the listing. But in regards to the time and different components of that, you're really, you're really up against what the market is and what people are willing to pay. So

16:03

anyways, we would rather be on the buy side, but we've had enough previous clients, prior clients, as well as opportunities to start listing properties, that, you know, it just made sense for us to start putting that out there. And for newer brokers, it's a great way for them to get something under their feet and start to understand how the transaction goes. Yeah, I agree with that. It's a lot tougher to get listings than it is to get buyer representation.

16:28

And, you know, the, I'll never forget a residential agent told me probably 10 years ago, when I was first getting into commercial, he was like, oh, man, you gotta go for the listings, because you know, those will sell while you're sitting on the beach sipping a Corona, you don't have to do anything. Right. And so at first, I was like, okay, yeah, listings is the way to go. But residential is very different from commercial, you don't get to just sip. I mean, you know, residential agents have like these answering services that book appointments for them, residential agents go and show the house, they don't want the listing agent, they're the listing agents basically not involved at all, after it's listed with them. It's very different on the commercial real estate side, where you still have to very actively be working on selling that deal. You know, it's not like there's an MLS that you could just put out there.

17:11

niches you were asking me how to how to kind of carve things up for brokers? Man, I don't know that, that I've got a good answer to that. Because it's tough, right? I mean, when we were first getting started, and I had two brokers, it was like, everybody kind of do whatever you want. Because it's not, you're not, it's gonna be very tough for you to step on each other's toes. And then it wasn't until a few months ago, when we really had to say, Okay, what is everybody focused on? Because

17:37

this could very quickly become a nightmare, if we've got, you know, three reps from the combo group calling the same seller, exactly the same property, the same buyer. And so I kind of sat down with everybody, and, you know, one on one and looked at the majority of the deals that they were closing. And fortunately, every single broker had something that they ended up being a little more focused on.

18:00

So one of them was more focused on industrial and triple net investment sales. Right? So that was easiest, like, Okay, you take those, one of them was more focused on retail, and hospitality sales, because he was just stopping and knocking on doors. So it's like, okay, you take those. And one of them specifically just wanted East Nashville, he wanted to take the corridors there. So I said, Okay, we'll carve that out. This is your territory, you can sell anything within here. Really, what it came down to is we didn't break up the territories in any other way. Like, it's not like as an agent. You know, my industrial guy couldn't do a deal in East Nashville. We broke it out based on prospecting. So the other agents are not allowed to prospect within whatever your specific niche is that we've qualified for you. And I'll give you an example of why. So,

18:50

you know, we've got a buyer that we represented, that sent us their friend who was doing a deal in somebody else's niche, but they wanted their agents represent that. Well, that's a great case for saying, okay, he didn't prospect for that lead, it was given to him, he should be able to work on that deal, no matter where it is. So that's kind of how we broke it up, works out very well for our team, but every team is different, you know. So that's kind of where we are. I want to know how you're leveraging tech. And I know we got to get to my, my introduction of my brokerage team and all that kind of stuff. But there's a lot of stuff in what you were saying that that was really interesting. So what are you doing on the tech side so far? Right now? So we use a couple different platforms, obviously, we're, I know your views and opinions about costar but we have to use costar.

19:37

So, we're using you know, costar just from a data standpoint, right. I think that's an important piece to our to our brokerage, we actually still will utilize the MLS in a lot of different components and capacities because we're typically selling a lot of times properties that are under a million dollars, right. So if we have a four Plex or a six Plex or an eight Plex, you know, we'll we'll put

20:00

on the MLS however, you know, we know that we're typically going to get residential agents. But when you put a property on the MLS, it goes out to 1000s and 1000s of agents. And those agents have set up criteria for their clientele, that when a new deal pops up, it's about automatically sent to them. And so believe it or not, we've sold a lot of deals that way,

20:25

you know, that are a million dollars or less off of the the MLS. So we're utilizing that we have a program called build out build out is kind of where we house our off market databases. So if you go to our website, and you sign up for the marketplace that is powered by build out, which then allows people to get to the data room, and also has all of our marketing material capacity. In that transaction file management, we're using broker mint at the moment. And broker mint helps us with the signing and the compliance side of the brokerage, we use Constant Contact on our mailing list currently, and then we're utilizing LinkedIn really well, on the brokerage, we're not only utilizing it to get exposure, but we're utilizing it to get listings. And when a listing is coming up for either renewal or you know what not because we have some different programs, we will do a 21 day listing program that I can talk about it very strategically. But when I post something on LinkedIn, if I write a good enough content, if I engage if I've done a good job is typically getting five to 25,000 impressions. And so one unique value proposition for us is, you know, I have 25,000 followers on LinkedIn. Alex has 10,000, our companies have a couple 1000. So when that's posted, we pull all those analytics back and say, Look, yes, it went out to our buyer lists. Yes, it went on the MLS Yes, it went on loop net, but it's also being pushed on. On loop net, we're utilizing YouTube. So we do multifamily meet up minutes every single every single week where one of our agents is basically going on and reviewing kind of giving a broker opinion of value of every new deal that's hit the marketplace, and does a video on that every single week and post that to YouTube. And on LinkedIn, 3d drone, you know, tours, right. So make them feel like they can tour the property without having to be there. That's extremely important in today's day and age. And then we utilize, you know, still Google Drive, believe it or not, I saw both Barry post something today that I thought was really interesting. He said, Man, the look that I give buyers, when they ask a question that's already on the marketing materials is very difficult for me to get over it. So we have what we call the Quick Facts document, it's the most frequently asked questions that we typically get. And we put that right in front of people on a one pager, right? I think that's, that's really important. I'm in the process right now of finding the right CRM solution. So when I only had one broker, you know, we didn't have a CRM, and we used Excel. And now we're up to six folks, and about to be eight. And so we've been evaluating the right CRM systems. And what I'm trying to find in the CRM system is, you know, a data source that allows for continual scrubbing of the property database, once it's actually created, to allow it to be updated with, you know, county record, and, you know, assessment data, loan data, all of that, that's been hard to find. But I think artificial intelligence will help us in that capacity at some point. Also, after you have your database, you want to be really careful on the database that something doesn't go override what somebody else has already inputted, right? We use fiber a lot for skip tracing, believe it or not, so I'll pull a zip code where I may not have the most up to date phone numbers, emails, and I will go on and have somebody skipped, trace that and provide me three phone numbers, three emails, and then it's up to the broker to go in there and figure out which one is correct, and then update their property record in their in their CRM. So those are kind of the tech pieces that we're utilizing. Right now. Is there anything that that you guys are using that, that we should be that we're not? Man, I mean, I'll say on the CRM side, it's, we found it impossible to find one that was like real estate specific, that could pull in all that data. And we just said, You know what, it's just something that we're going to have to start keeping ourselves so we can kind of work with that, whatever, you know, it'd be great to have that tool, but

24:30

we really started looking into it. And it would have to be

24:35

it has to be coded. I mean, there's no way around it. You'd have to get a software engineer involved. And man, are you gonna be spending a lot of money doing that? Absolutely. So we use HubSpot. And I'm happy to walk you through some time on one of these kind of how are HubSpot set up I'm actually part of my presentation today. For January I'm gonna be showing some of the reporting from HubSpot, because I can keep track of all the deals closed and the money there. So I'll show you all what that chart looks like.

25:00

It's phenomenal. It connects to Gmail, which is, you know, where our platform for our email. So whenever you know somebody sends an email to the office or wherever, we can automatically tag them into HubSpot as a as a contact, it will resolve those emails to whatever deal you've associated with them, every single attachment we've ever sent them stays under their deal file in HubSpot. And it just the tracking reporting, everything that we get out of it is good enough. It's not, it's not 100%, it's, it's probably not even 90%. But it's as good as we've ever seen a CRM for commercial real estate, every CRM is, is not going to be perfect. And

25:45

the big thing about CRM is and I have to hammer this with my brokers all the time. And I'm sure they're gonna get sick of me talking about it at some point. Every single team meeting we have on my guys make sure hub spots updated, make sure you're logging all your deals, you're keeping all your notes in there, because CRMs are only as good as you feed them.

26:03

They can be phenomenal. I mean, the level of detail that you can go into, and the capability you can have is pretty next level, but you've got to feed it for that. Right. So that's I completely agree, man. I mean, one that I think is real estate specific that a lot of people have started to see using is real next CRM.

26:25

In look, I mean, I think that you hit the nail on the head, you have to use it, you have to make sure that brokers are using it and it's being continually updated. For me having a really strong property database is extremely important. So talk to me about HubSpot really quickly on Yeah, it's great problem. I know that HubSpot was originally started for marketing automation, which works really good with buyers, right? But are you able to find a solution inside of HubSpot to say, Alright, I need to pull, you know, multifamily properties 10 to 50 units in this zip code and have a database that can populate that and then put it on a map. So you can pull out the information like Is that how you're using it as well? No, it's not. We can't do that in Nashville, Davidson County, fortunately, has really good tax records. So it's very easy for us to go in and do all that through the existing platform that's offered by Nashville. Once you start getting outside of that, the platform that we'll use is called CRS data. And that's pretty great, because I can go in there, they pull tax records from all sorts of different counties.

27:37

And actually, let me see, I might be able to just share my screen real quick. If I if I can remember my login to CRS data, and show you how that works. Have you ever heard of that before? No, I'm I've got it pulled up now though, taking a look at it. So I don't forget. Oh, yeah, it's phenomenal, man.

27:55

Let me see.

27:59

If I can actually get this logged in. Okay, yeah, I got it. So I'm gonna go out and share my screen.

28:06

That was not the right one.

28:09

Let me add you back to the right.

28:14

Okay, so here's CRS data.

28:19

And I can go in, you know, you kind of pick it by the county, something like that. Let's just say Davidson County, go to the Advanced Search.

28:28

So I can come in here. And again, it's not perfect, but it's as close to perfect as I found. You can search by location, you can search by property value, and I don't think that their platform is all that expensive. But let's say I want to find property characteristics property type is commercial.

28:47

Let's say.

28:51

There's also like zoning and things like that, that you can get into if you really wanted to.

28:58

But you can say, you know, vacant land or not vacant land, let's say I want buildings with you know, minimum of one to five acres.

29:08

Total building square feets 10,000.

29:12

And, I mean, I could,

29:16

yeah, let's leave it at that for now.

29:19

So when I submit that, I mean, it's gonna pull up a list of every single property in Nashville that checks those boxes, and I can zoom out.

29:30

View a larger map, okay, so it's only gonna pull up the first 500 properties because there's so many properties that do that. But now I've got a list of every single property that checks those boxes.

29:39

And then when you look

29:41

here, yeah, so once you click on the property, you actually get this whole property summary. Right. So here's the address. It's an office building high rise 63,000 square feet. Here's the name of the owners. Here's their mailing address, even connects you right to the white pages listing

30:00

Which is pretty great. I can see the sales history of it. So it's sold in 1987 for 2.7 million looks like it's sold at 96 for 250, and hasn't sold sense of it that is worth an immense amount of money.

30:15

You can see because this is downtown, if you're listening on the podcast and can't see it, this is an office building downtown. I can see the tax records, you know, how much they were having to pay in taxes over the years, I can see the mortgage history. I mean, yeah, they've got a loan in 2019, for 22 million. That's a pretty good, good sized, you know, value property.

30:33

But I mean, you can go into all of this, you know, it's got the lot square footage, how many acres what it's what it's zoned.

30:40

So this is pretty great. This, this gets us 90 90% Of what we need. So you'll get the property level information from that. And then it's up to you and the team to go find out the contact information for those property owners if you're trying to call on them. That's exactly right. And you can it connects directly to white pages. So whatever mailing addresses in there, it'll probably be name associated with it, it'll pull it up. You could also use seamless AI. We've tried that before. It also integrates directly into Google Chrome. And, you know, it's kind of similar to zoom info, we were talking about this on my broker's live stream, or yesterday, I guess

31:17

where, you know, it gives you probabilities of this number being their phone number. So that's always pretty nice. But yeah, that's I mean, that's kind of how we'll do it. So we'll go into HubSpot, we'll create like a buying opportunity. Right? It's, you know, Joe Smith, and then under his name, we start rattling off all of these potential properties that are fits, and then start keeping notes on which ones should be called which ones have we made contact with? You know, one of the potentials out of that, etc? Yeah, I mean, that's awesome. I've already taken two notes down from different tech platforms that we are not currently using that can be very helpful. I appreciate that, brother. That's, that's great. So, you know, I think that what I'd love to hear from from you, unless you got any more questions about what we're doing, man, I'm

32:01

hearing

32:03

what the brokerage is focused on where the what the goals are, you know, what the growth trajectory is? And then let's talk about some nuts and bolts on how we're going to get there this year. Yeah, let's do it. So I'll give you all a quick overview on the Cabo group. So I founded this brokerage in 2018. I had started off as the in house leasing agent for a boutique development firm, so working on their office, retail and industrial portfolio,

32:27

and had a lot of leasing experience before I moved into investment sales. So we've always done leasing, as well as sales. Yeah, right. transition into leasing, or sales opportunities anyways, right? I mean, that's all that's right. Yeah, it will end as a as an investor. Now, it makes the whole process so much easier, because we know exactly what's going on in the market. So, you know, I bought a building, it was a smaller 2000 square foot building back in 2020. But we signed a lease before we closed on it, bought it for 435. appraised for 650, because of the lease, and I bought it because I knew that there were tenants looking for that property. So it just makes your life so much easier. You know?

33:08

So yeah, I mean, you know, I can't remember the the amount of volume that we've done over the years, I know my first year going off on my own, we did about $15 million dollars in volume. It steadily increased from there, up until I've pretty much always been the only only broker. I've had some junior brokers but I was having to, I was ending up having to do everything. Sure. Which we can also talk about there. Yeah, delegation, a whole episode on that would be awesome. That's right. That's exactly right. Up until 2022, which was my last year solo. And I personally did about $35 million in sales, and we had a couple of other brokers get probably close to five or 10 million combined.

33:53

So last year, I stepped out of the brokerage completely. And there were a combination of factors. One I wasn't selling anymore, because I was focusing more on the business development and the investment side. Sure. And

34:06

the average commercial real estate broker brokerage across the United States was down 70%. Yep. So we didn't hit that. Well, we ended up hitting about 15 million last year. So almost half of what I had done with myself that year previously, but the best thing is, we have laid such a great foundation. I've got a phenomenal team, and I'm really excited about what they're going to be doing.

34:30

So we've got some some really big goals.

34:34

This year, we're aiming for $80 million in sales, which is basically a 500% increase year over year, which sounds crazy. But with with this team that we've got, and with my moving more into business development, focusing on the podcast, YouTube channel speaking engagements, and networking, I think that we've got a very clear path

35:00

Back to finding our way there.

35:03

We do a variety of transactions. So Office industrial retail, multifamily development, hospitality, we literally do everything. We're a boutique commercial real estate brokerage, which has its pros and cons, right? Sure. If we wanted to just absolutely crush it and triple net sales, then that's all that we would be focusing on. To me, that's not entertaining, and it's not fun. And it also really pigeonholes you, if the market takes a turn, right, you know, who's really hurting right now, multifamily guys, they cannot get transactions done to say otherwise, it's just a really tough market. And if we had only focused on one asset class, you know, I might be working construction on the weekends for my grandfather. So I would prefer never to do that again.

35:50

So it's good, you know, the brokerages is interesting the way that it's evolved over the years. So back in 2018 2019, to 2020, it was almost exclusively Nashville,

36:00

and 2020s When I started the YouTube channel and the podcast, and that that was really interesting it at first, I didn't really have any expectations for it, I just wanted to go out and teach people how to how to invest in commercial real estate because it changed my life. And when I was first getting started, there was nothing out there like that.

36:17

But it ended up opening us up to a nationwide and actually international audience of investors. And so now about half of the sales that we do are outside of Tennessee, which is kind of kind of crazy to think about. Really cool. So how does it work? Tyler? So break that down, right? Because one, I don't know, from a commercial real estate standpoint, how big Nashville is I know, it's bigger than Kansas City. Right, I can give you the stats on Kansas City. But

36:49

you know, typically a couple things. Typically, you know, brokerages will focus on a certain asset class a certain geographic location, we don't do that either. Because I didn't find that exciting. And I didn't think that was interesting enough for, for me to try to build a business around. So we have that similarity. But we do transactions in Missouri and Kansas, because, frankly, we are here right here on the state line. So you have to be able to cross over. But outside of that. Yes, we have purchased for acquisitions and investments outside of Missouri and Kansas. But I'm really curious to hear one how that came about. But also, I mean, I know how it came about, right? It's blowing up the social media and adding a ton of value. But how do you go about doing a transaction outside of your geographic, you know, footprint? Yeah, so so it's very specifically, triple net and single tenant Net Lease deals. Okay, here's kind of what we do nationwide.

37:45

That doesn't preclude regular investments, or, you know, potential developments, things like that. It's just, that's typically not what we're working on. I had a couple of YouTube videos on Triple Net investing that just kind of took off. And so we get calls from investors around the country looking for those all the time. And the great thing about that asset class is that, you know, we can do that from our office, it doesn't matter where in the world, we are conducting that sale. Because, you know, a lot of it comes down to like, we're just we can handle the due diligence from the Nashville office, we don't have to be on site. It's a lot of of lease review, credit review, sending an inspector out to the site. And you know, if you really think about it, unless you're doing like a heavy value, add or ground up development, almost any investment you can do completely remotely, you just gotta you just gotta get comfortable with that. And we've got a good process in place to do it. So it's not like we're working on, you know, ground up multifamily transactions. And, you know, Louisiana, it's mostly existing assets that we're buying on behalf of clients who are either in a 1031 exchange, kind of, like you said, or more often than not, it's people that are just wanting to get started in commercial real estate, they're high earning professionals. And they don't want something that's going to take up too much time. And so single tenant, at least triple net lease deals are the absolute perfect investment for them. Absolutely, completely agree. And you're you're valuating tenant credit quality location in the building at that point. So there's not a whole lot more to that. When you go out to Well, first off, what's the craziest state that you've ever done a transaction and but, you know, are you licensed in all those states? And how do you think about you know, that or, or how does that process work? Because I know that based on which state you're in, it can be a state that allows you to do real estate that doesn't that you have to partner up with somebody else. Have you got about that? That's, that's a unique growth opportunity for us as well. Yeah, absolutely. So craziest state so far has been Wisconsin. Well, that's not that crazy. That's just the furthest away, you know, we've gone for a transaction.

39:56

You know, we're talking about some deals up in Alaska, which could be really

40:00

Interesting, just because I mean, man that's like, that's the frontier man, it still is that it's really cool just even thinking and looking into

40:08

deals in that area. So that's exciting. But as far as is, you know, transacting in other states, no, I only have my Tennessee license. And I'm working on getting my Kentucky license because it's reciprocal.

40:22

But

40:24

what we'll usually do is we'll just find another boutique brokerage firm in those markets, and pay them 500 bucks to run it through their their brokerage firm, and it's a done an easy deal. You know, they're more than happy to take the 500 bucks doesn't cost them anything to really do the transaction. And, you know, we get to stay compliant with with all the regulations, all of that. Yep. We've We've been very close on that with some groups here, locally that have their licenses in all 50 states. And so it's like, hey, if we bring a buyer would do this deal is, are you guys willing to work with us on on this, and they've been, you know, open to doing that. So, okay, I thought that would be the process. Now, there was a few things that you said that I wanted to kind of key in on. And it was a shift in 2018, before you when you first started, and then going to 2022, where you stepped away. So you went from producer to leader. And I have done the same, and it's very difficult to transition. Because sometimes the best players are not the best coaches. But if you want to grow a business, you have to coach yourself up on how to lead people effectively. So how did that process work for you? And I know it's a work in progress for both of us. But it was a really difficult transition for me becoming going from just a producer to actually leading people effectively and stepping out of just making transactions happen. Yeah, it's not easy, man. I mean, I was always the lone wolf, right. I've been in sales since I was 18. And I was always on my own. And, you know, never had that, you know, corporate management experience. And

42:04

it's very different. So what I'll say is, I was not good at it. For many years, I hired a lot of the wrong employees had hired the worst brokers I possibly could have had on my team, thinking that, you know, oh, maybe I can, I can cut, you know, some corners here. And, you know, just because that's what somebody who's been in for 20 years is telling me to do doesn't mean that they're always right. You know, at first I was hiring Junior brokers that had zero experience, because I thought, I want to bring somebody in that I can mold that doesn't have any, you know, bad experience in commercial real estate. And, you know, grow them from there. And it works, okay. Not for your first hire, though, that's you got to have like two or three other established guys on your team that can also help mentor that person and create that team environment. Because what I found was they had it too good. Because I would immediately just start handing them all of my leasing. So I had one kid who was like 21 years old, he made 40, something $1,000, his first year working as a junior broker with me, which, that's a lot of money, right? Like, as a first year junior broker. He didn't have to source a single one of his deals, I gave him everything.

43:22

And

43:24

I think that he took it for granted how good I gave it to him, because most brokerages do not give you 100% of your leads to where you can make that much money. That's right. And, you know, as soon as he got his feet up under him, he went and left to a bigger bid for a bigger firm. And I think that he just thought that, oh, everybody's gonna be like this, I might, I might as well go to a bigger group and see what they'll give me. And and that's not the case. And I had that happen two times. Before I learned like, okay, it wasn't just the first guy, it was like this, this model doesn't work.

43:56

Yeah, I've gone through a handful of employees, you know, not not proud of it, right. I mean, it's, it's not like I really left on bad terms with anybody, it just kind of eventually got to a point where the company was growing so fast, that we left some employees behind, they couldn't grow fast enough with the company in the direction that we were headed. And we were basically like a startup moving at a million miles an hour. And they were a great hire at that one point in time. But 12 months later, it wasn't a fit anymore. And so that was that was really tough for me to realize is that you really have to hire ahead of your need, and pay a little bit more than you think you're going to pay in order to get that right person but I've worked on this a lot. So I also have an executive coach, very expensive every month but absolutely worth it because I need that help someone who's been there, done that he's he's founded and exited multiple companies. I'm in the Entrepreneurs Organization. So I have a monthly for meeting with my forum. And you know, we dive into more, you know, best practices there. And then I'm also in a mastermind called the abundance

45:00

which is there's a lot of other real estate guys in that. So again, I'm mourning trying to learn as much as I can from other people who have been there done that as I possibly can. So I don't have to make any of those mistakes anymore. Yeah, I mean that you, you hit the nail on the head with how it's been for me, as well. I think that the hiring part is really difficult. And I have hired very slow on the brokerage side, because it's a marriage, man, I mean, you're pouring into these people that have to then go eat what they kill. And you know, it's a lot of time, you and I are both you just rattled off three things that take up a lot of time just on growing yourself, every single month, on top of running multiple businesses, and everything else that you have to do on a regular basis, keeping your mental and physical health going, right. So in for me, you know, having, you know, my wife and three little ones running around as well. And so it's it well, two of them are running ones just laying

46:05

run yet. But that's extremely important because I have found that on the brokerage side, if you find the right culture fit, and I use Strength Finders, I use principles you by Ray Dalio, that's a free one. And then I make sure that we figure out what your what each person's niche is going to be. And then we use a detailed market focus sheet that lays out, okay, I know on the multifamily side, you need to get to 2000 properties, and there needs to be a churn rate of 10% or 5%. Sorry, you know, 100 100 properties basically need to transact every single month, or sorry, every single year in that 2000 properties, right. So, if that's the case, then I think that you'll be able to go build a successful business, and I'm not looking to bring on any brokers that I don't feel like I can get to $10 million in gross volume in the first 12 months, right, and or set them up to be on that trajectory. So that means that I'm going to have to spend a lot of time with that individual understanding how to get them set up. And then also the sales training and, you know, understanding their total addressable market, their ideal customer profile, what's the messages that I hit with them? How often do I do that? How do I do that? How do I use CRS data seamless.ai, real next, all of these different software systems, to then be like, Okay, I've got the foundational knowledge, then you have to keep that person working and motivated in commercial real estate brokerage is not something that you step into, and you start transacting just like that, unless you're bringing a book of business. And so if you're starting from scratch, there's a ton of work that has to be done from a prospecting standpoint, to be able to get someone there. So I'm thinking there's probably a future episode specifically on leadership and hiring and things like that. But I have typically taken anywhere between six to eight weeks with with an individual that I'm looking to bring on to the brokerage, and they're like, why can I just transfer my license over? I'm like, no, no, no, we're going to spend six to eight weeks getting to know each other, and going through all of those processes. And then I use chat GPT to get all of the results from principals view from my team. And then I run the mock scenarios, through chat GPT, it loads up every single strength that they have, and then at least say, Okay, now we've got a situation, how is everyone going to respond? Okay, you know, Chad's got a new deal, how is he going to respond with Katie and with myself, what challenges might come up based on the strengths that I know that they have, and or their weaknesses. And so I'm really focused on on the culture side and the leadership side of trying to make sure that people are interacting the right way. So they keep that motivation, inspiration to continue on. Because if somebody doesn't feel like they're being poured into and or have a fit, then they're not going to do the work that needs to be successful. And so I think that's really important component to think about, and one that you've you and I have both found to be very difficult and have learned the hard way on that front. Yeah, that's really interesting, man, I love how you're taking their their personality profiles and running it through those systems, it makes a lot of sense. And, you know, the one thing I'll say, though, is that I've had employees that have checked every single box on these personality tests, and turned out to be total flops. And I've had some people that, you know, they're close enough, but you know, enough to where most people would say, not a fit for our team brought him on, and they were phenomenal. And so, you know, take them with a grain of salt. I think they're, they're 80% there.

49:37

There's so many things that, you know, can can kind of go into that. Okay, last 10 minutes of the podcast, I want to go into numbers from last month.

49:45

on future episodes, we'll probably do this at the very beginning of the episode, because then we'll actually have stuff to talk about why that you know, XYZ happened, but we wanted to make sure that you had a good overview of who we are and what our brokerage teams look like.

50:00

so that you know, kind of what we're working with, because if it was a solo team versus an eight person team, very, very different numbers.

50:07

Logan, I'll go into the numbers first if you want me to, and we'll kind of talk about it. So like I said, we're aiming for $80 million in volume this year, which is a decent amount. And I've broken it out almost on a bell curve, essentially, by quarters, just based on previous volume, typically, you know, q one, two and three

50:30

are pretty decent. And then q4 Sometimes slides off. But last year, it was actually the opposite. q1 was very low, two, three, and four was actually one of our highest. So it's always tough in brokerage, you never know, because some of these deals take 180 days, 365 days plus to actually come to fruition. So you really don't know when they're going to timeout.

50:51

But in January, we closed $1.35 million,

50:55

that is very low compared to the $22 million that we have to do this quarter.

51:00

We could definitely pick that apart, it was two leases in a sale. I will say that last year in January, we closed zero to $1,350,000. Ahead of that, which I'm all about. And actually I'm gonna pull up this chart real quick, so that everybody can see kind of what we're looking at. So this is from HubSpot reporting, you can see you know where this orange line is where we are. And this gray line is where we were last year. So

51:29

kind of help visualize this a little bit.

51:32

inbound leads, we had 47 phone calls to the office, there were leads and 11 through the website, I don't really track any that come through Instagram, although I probably should, because we do get a decent amount of leads from people just DMing. Me there.

51:46

We have 33 active deals in the pipeline, and a pipeline value of 56 point 6 million. So you know, while that 1.35 Seems really low, we've got some pretty substantial deals in the works today. So I'm not worried about hitting our goal for the year. Maybe I'm worried about it for this quarter. But overall, based on what the brokers are working on every day, what they're wanting to accomplish individually, because that was a big thing that we did this year, that I haven't done it in years previous. I sat down with every broker and worked with them for a month leading up to the end of last year on what their 13 individual goals would be for this year. And they're anything from you know, get 10 new listings to read six books on business. Right. And we ended up taking the we weighed in everything. Right. So closing $2 million in deals is going to weigh heavier on the scoring than reading books would be. And I'll share this with you as well, because I think you'll I think you'll actually like this, I decided to create some bounties and incentives for the brokers this year. So we created goals. So $5,000 per broker for the team bonus, the team must hit 70% of his goals for the year before the brokers are eligible. So if we hit 69% of our goals based on that weighted average, no bonus for the team, anything above that, you know, they'll get paid. So

53:22

we also came up with $5,000 per broker for their individual goals. Again, they have to hit at least 70% of their goals before they're eligible for that bonus bounties. I put a bounty out there $5,000 bonus for the most new listings for the year. A $5,000 bonus for the most Google reviews, five stars, obviously.

53:43

A $2,500 bonus for most sales volume for the year $2,500 For most sales closed for the year, a number of sales. I own a property out in Chattanooga has 1.2 million square feet vacant. So I put a $5,000 bounty on whoever leases the most square feet there. Yeah. And then overall deals and most volume per quarter 20 515 $100 each. So just something that's a little bit fun. You know, brokers love making money. They love an excuse to make more money somehow. And they're basically getting paid for doing their jobs. Well. So that was a little fun thing we decided to add. Alright, one question on that. So you said you've got 33 deals in the pipeline, which equate to somewhere around $50 million of transactions, what contract to do in the pipeline? Is it a listing agreement? Is it almost a listing agreement is a buyer Tell me tell me what that looks like? Yeah, so it's, it's a little bit nebulous, but it's anything that we're actively working on. Right? So it can't just be like a, Hey, I talked to this property owner and he said he wants $2 million for his property that is not a LEED, we don't count that you can put that in your you know, your pocket for listing. Either we're actively working on negotiating an LOI or we're actively working on it.

55:00

negotiating a listing agreement, like there has to be something actively moving forward on that deal. So, you know, a few of the deals that are in that, like a hotel to apartment conversion, we've been working on that for six months, it's not officially a listing. And we're not officially representing the buyer. But we brought both parties together.

55:19

You know, we've got a 280 unit,

55:23

you know, assisted living facility that we're working on right now,

55:26

again, another off market deal, because they don't want any of the publicity of that going out. So their deals we're actively working on, but it's not like there's necessarily anything signed, or they're under contract. Some of it is under contract, though. Yeah, I'd be it'd be good, you know, and I'm sure you're already doing this, but, you know, probability of pipeline to close ratios over the years. That way, you know, you know, look, hey, we need $150 million in the pipeline, for us to get to $88 million dollars or $80 million. Right. So that is definitely something that I want to get to. And I'm hoping through working together on this and getting feedback with from other individuals that we can really start to put some KPIs around forecasting abilities, because I know that that's extremely important, very difficult to do in the commercial real estate. Industry, we're not selling widgets that, you know, you put this much marketing behind it, and we sell this much. And you know, like you said, a deal can take six months, it can take three months, it could take a month, it could take two weeks, you just don't know. And so that can be really difficult. But I imagine if we historically looked at pipeline to closing, we can get some probability rates and know how much pipeline the team needs to have to hit those, those goals. So yeah, that's a good point, I need to go back through and look at the past. I think we've been using HubSpot for about two years now. So I bet I could go in there and pull data from the last two years to see how many contacts we had to make for every deal that was closed, how many deals we had to create for every deal closed. And I'll report that back. Next podcast.

56:59

All right, so we kind of look at this a little bit differently, I set these quarterly rocks. So our, our goal was to hit $10 million, or is to hit $10 million,

57:09

either closed, what really closed but needs to be in the pipeline, right? So where we're kind of at right now is we have about $7.4 million, that is either listed under contract or has been sold. So things that we have closed on only 640,000 in January. But those other properties are either listed under contract. And or we're working with a buyer finding that that property. So we've had, you know, a good first month, I would say the second this this month is really starting to pick back up. But we need to get some more deals in the pipeline. Because as you know, sitting on February 14, if we don't get more deals in the pipeline to close by the end of March, that's going to be pushing to the next quarter. And so we came with a strong, I think momentum, but we didn't know what the market was going to do in regards to the listings that we have, a couple of those listings have gone under contract really quickly. And so I'm excited about that. But we're still needing to add about $2.5 million dollars worth of pipeline here to hit our goals. But I am, I am pleasantly surprised to be at around $7.4 million of deals that we are in control of right now. Because I think that's an important perspective. In regards to pipeline looking forward things that we're working on. Similar to your pipeline that you mentioned, we have about $23 million of pipeline that we are actively working on from a listing standpoint or working with buyers that we feel like in the next three months, so 90 days will transact and or will take the next step to listing it or representing the buyer. So that's a good pipeline, I need that to continue to increase, I need to get that up to 35 $40 million. And one of the ways that we're going to do that is bringing on these additional brokers. And so we're sitting in a pretty good spot right now. We had a big week. Last week, two new listing sign last week, one new listing renewal, and we got a deal under contract from a new broker. So very excited about all of those things. So that's kind of how we look at it. We set these quarterly rocks through the Eos. And then I track this on an Excel sheet. I don't have fancy HubSpot set up fairly yet but we are trying to work on our forecasting and pipeline abilities here in the near future.

59:36

I love it man. This is going to be a it's gonna be a fun year of working on this together. I can already tell like this is going to help me out significantly. Hopefully it does the same for you and hopefully it does the same for you everybody in the audience. Appreciate you all joining us today for our January brokerage business review. If you have any questions or comments on on items that you would like for us to cover, maybe there's something that we didn't talk about today that you're like you know what running a commercial real estate but

1:00:00

reg business I would really love to know how to do X, Y, Z, whatever it is. Feel free to drop those in the comments shoot us a DM you know connect with Logan on LinkedIn or me on Instagram. And we can take it from there. We'll see you guys in the next one.

1:00:14

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