March CRE Brokerage Business Review with Logan Freeman
The March Business Review episode provides insights into Logan and Tyler's commercial real estate brokerage businesses through a discussion of performance stats, pipeline visualization initiatives, ideal customer profile development, and educational content creation for leads.
Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Central: www.crecentral.com
Key Takeaways:
Tyler and Logan are launching a Brokers Mastermind program to provide coaching and training to commercial real estate brokers.
Both Tyler and Logan's brokerage businesses had a challenging Q1 and did not meet their sales goals.
Prospecting more through activities like flyer distribution and cold calls is important to generate more leads and deals.
It's important to track metrics like time to close, average value by deal type, and allocate time and focus to the most lucrative deal types.
Generating leads through content marketing and branding on platforms like LinkedIn and YouTube in addition to prospecting is important to keep pipelines full.
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 live for a march brokerage business review, Morgan Freeman and I are going to be diving into our brokerage businesses. Which if you all have been following us for a little bit, you know that our primary gig is raising capital and doing investments. But we both started on the brokerage side. And it's the active part of the business that keeps us running. And, you know, especially in a year like 2023, when there's no acquisitions, because you don't want to raise capital for a terrible investment. It really helps. So today we're gonna be diving into March q1. And honestly, it's going to be an uncomfortable conversation for at least me, because we did not hit our goals in q1. And we're going to talk through why I think that happened. And, you know, maybe Logan will have some advice for me. But before we do that, we've actually got a pretty exciting announcement that has been kind of in the works for a little bit because of this podcast. Logan, you want to tease it out a little bit more? Yeah, you know, we both have looked for places to go to be around like minded individuals in regards to how do I get started? In commercial real estate brokerage? How do I make a shift from the residential side to the commercial side? How do I if I'm a mid level broker, and I'm already producing, but how do I go from, you know, $50,000 to $100,000? How do I go from $100,000 to 252 50 to 500? And how do you actually go from 500 to a million dollars? There's a lot of people in the commercial real estate brokerage industry, netting $1 million in commissions. That's great. But that's just another plateau after that is how do I invest a million dollars? How do I keep a million dollars? You wouldn't believe Tyler, how many times I talk with people that and we start talking about taxes. And I've read, you know, the Rich Dad, Poor Dad, Tom wheelwright loophole books, I've read a lot of different books, I've met with many, many different CPAs. In regards to as a real estate broker, how do you make sure that you keep more of the money that you're making, because we're self employed, and we have to pay a lot of tax if you're, especially if you're in that income, earning bracket. But there are tools at our disposal, we are qualified real estate professionals, which is one of the most important but also strongest tax advantages for a for an income earner. And so being able to utilize that is extremely important, as well as when transactions dry up, and you've gone out and you've bought your Bentley, and your yacht, and your second or third home, and you've got $70,000 A month in expenses, or more more, and you're not doing deals, what do you do? One we're gonna help you not get into that position, but to is how do you leverage a personal brand? How do you figure out how to make income during times when you're not doing transactions because of where the market is. That's through your investments. And that's through other side hustles. And so I think that what we are looking to put together is a collective genius of many different individuals from different places around the country, but a place that people can come and learn and engage. And if I've learned anything about this business, it's always that my business and almost every investment we've done has come through some sort of referral. And I've got this we've got this big idea of creating the strongest referral network in the country, and commercial real estate. You can't be in there spamming, you know, people say, well, let's just use Facebook groups, let's go to conferences, those are all good things. But what if there was an actual strategy with individuals saying, you know, I've got this listing and this listing, and or I've got a client looking for this and this, and we can actually put a database of those deals and of those client needs together. And you've got 2550 100 150 1001 percenters on a commercial real estate brokerage, going to this logging in engaging with individuals saying, Well, I got a client for that, or I need to refer this business over there. How do you actually create an ecosystem?
4:50
Some sort of group that actually adds revenue to your business right through a referral network. So Tyler and I have been working on
5:00
The name and all of these different pieces to the puzzle. But I'm very excited about this something that I think that through coaching, through networking, through training, all of the experience that we have, we can really bring something together that's going to change people's lives. I'm pretty pumped about it. So anyways, that's off the script there, Tyler, I'm going to stop because we got to get into other things. But I can just I can talk about this for an hour because of the ideas that you and I have passed back and forth. And the impact that, you know, the training that we have done ourselves and all of these different components, but very excited about the brokers mastermind for sure. Yeah, I mean, I think it's, I think we should probably have an episode where we just sit down and talk about it because there's there's so much to run through. But yeah, we're releasing a mastermind for commercial real estate brokers. From what we've been able to find. There's nothing that's really out there like this. We're going to be training commercial real estate brokers, which Logan and I both got our started, how to earn a million, keep a million and invest a million. You know, commercial real estate brokerage for most people is a stepping stone. And it should be that way. But the problem is a lot of investors don't necessarily want to bring that broker under their wings and show them exactly how to start investing. We're going to do that and show you how you can start partnering up with your clients to do it, too. That's actually one of the best ways that I could have gotten my start. We're talking weekly group coaching calls monthly one on one coaching sessions quarterly in person workshops between Nashville and Kansas City, an annual mastermind retreat, Wogan, I have an immense online resource library on our own, but there will be combining it together for this and of course, accountability pods, you will have your own group of 1% commercial real estate brokers from around the country that you'll be meeting together with every week via zoom or via phone call to, you know, share war stories and encourage each other. When we first got started in commercial real estate, brokers didn't share anything that didn't help each other out. And I do not do business that way. And neither is Logan. We've always felt that, you know, high tides raise all ships. So we think that we'll be able to create better commercial real estate brokers by creating this community. So if you want to learn more, the link is in the description below brokers mastermind.com, very creative name. But after a lot of discussion with figures, you know what, it's the easiest thing to remember, it will probably be Google at some point. So let's just keep it that way brokers mastermind.com. How was that not taken? Right? I mean, I don't know. Yeah, I don't know. You think
7:38
with our market research, there are very few groups. And if there are groups out there, they've been around for a long time. And they're gray heads talking, commercial real estate is changing, the landscape is changing, the technology is changing. The personal branding that's needed is changing. And there's a new wave of individuals stepping up in this industry leveraging LinkedIn, YouTube, Instagram, podcast to grow their businesses. This is the 21st 22nd century commercial real estate when people are saying commercial real estate and how real estate is changing. Yes, technology is important. But I went on a six month not hiatus, but a six month research to talking to people. What do you envision commercial real estate changing into? And nobody had really a clear answer. They would always say all artificial intelligence or technology. What does that actually mean? Well, that's the answer. That's our that's the question that we're going to bring the answer to, for people to be able to set themselves up for success. So the brokers mastermind.com, check it out. Yep, that's it. So join the waitlist. We don't have anything available on the website yet. Logan and I are putting everything together, I will say it's going to be a limited first cohort. So get on that waitlist, shoot us an email, shoot me a deal. You know, whatever you can do to make sure that you're top of mind for us. As we're going through this process. I don't know what we're going to end up limiting it to, but it's probably going to be fewer than 50 people. So just keep that in mind as you're going through this process. And we hope to see you there. Brokers mastermind.com. Wogan. This month, we did things a little bit differently, you inspired me. And a really interesting way to do something that I've never thought about doing before. You write your team, a letter from the CEO every month. And it goes pretty in depth on you know, recapping the past month, what your thoughts are where you think the company is headed, where you want the company to head,
9:35
you know, some some metrics that you guys have hit some that you're trying to hit. And, you know, I sat down to put that together for my team.
9:44
I mean, it was five full pages of information that I sent to my team. Now I got zero feedback from the team, which kind of sucks and we'll talk about that later. Because I spent a lot of time on this but talk to us about the letter from the CEO because we're going
10:00
are those of the team even reads these? I'm doing this no matter what moving forward? Yeah, this is from either Jim or Jack Canfield CEO tools 2.0. And one of the reasons that I adopted this was, you know, we get really busy, in the brokerage world, we have hybrid people, we have people in the office, it's really, it's really easy to get caught in the minutia and the details every single day. And it's harder for brokers to step back and take an objective view in perspective of their business and where we're headed, and why we're doing what we're doing. And so the first piece was communication, how do I elevate my communication to the team, right, and on a consistent basis. The second part, though, is I have to be able to get all of the thoughts and vision and, you know, traction out of my head into a cohesive manner that I can share with the team. So the process for an individual going through this is very helpful and very impactful to get those thoughts through because you have to then communicate those in a way that, that people can understand them. So that's, that's the second part, you know, I think we have to catch people doing it. Right, right. So you need to have, you know, we have our values of our company. And so we want to make sure that when people are acting out in those values, that we are actually catching them doing it right. And that's from a book called, who moved the cheese, right? I forget who, who wrote that book, but it was all about catching people doing it, right. So you want to you want to highlight that. So that's culture, right? So there's a piece of culture in this, and then there's accountability. So we have to make sure that here's the rocks that we have set up utilizing EOS. And, you know, the book traction from Gina Whitman. And here are the rocks that we've we didn't hit here, the rocks that we did hit. And here's why I think that we did or did not hit those, hit those rocks. And so leveling up the communication is very important. And I'll we can talk about the feedback part because I get very little feedback from my team on this as well. But the other part is inspiration, right? And not really motivation. Because, you know, motivation is pretty fickle in this business. But, you know, you got to keep people inspired and excited about the vision that they're working towards. And we read a lot, and CEO should read a lot and be big, you know, in takers of information. But a lot of your brokers won't do that. And so there are certain books that I'll read, like thrive from Blaine Strickland. And then I wrote, you know, in my last letter from the CEO of a quick five, you know, five points summary of that book, right. And one of the pieces was the importance of always being, you know, being a prospector always been out there filling the funnel up. And so I wanted to make sure that, you know, that's one thing that was very top of mind for me is, how do we get ahead of all these transactions that I do believe are coming in q3 and q4. And the way to do that is to prospect right now, so inspiring people, not just telling the brokers, hey, we need to prospect we need to prospect. It's like, Hey, here's a 2530 year veteran in the industry that wrote a book, and one of the key points out of that book is to prospect, and here's why. Right. And so I think that's really important. But my job is to keep us all connected, informed and engaged on our ongoing journey towards achieving our collective goals. And setting the tone, every single month through the letter from the CEO has been extremely helpful. So breaking it down. Really quickly, you've got last month's paragraph, that section recaps the previous months goals and achievements, you know, includes the rocks, the goals, the results, any customers that you helped, you have a superstar paragraph, so that's highlighting exceptional performances within the organization, you got a values paragraph showcase someone embodying the company's core values, and then you then you talk about the next month, here's what we're working on this month. And this would be what I call subtasks, underneath those rocks, to help us stay on on point to make sure we achieve the rocks that we have set out for that quarter. And so I re iterate the ones that we're actually working on. And that turns out to be four or five pages, right. And that's, that's kind of the reason that I've, I've adopted this mentality. And I've done I think for six months, now we have, we have written these and I use it as a tool in our one on one meetings, I use it as a tool in our group, group weekly sales calls and meetings that we have as well. And I always point back to it as a great resource. Because a lot of times people you can tell if people have read it or not, they might not say anything about it, but it's like, Hey, did you happen to check out? You know, if they ask you a question that was clearly answered in the, in the sales, you know, or sorry, the letter from the CEO, and, you know, they don't have the answer for it, or they're looking for the answer. It's like, Hey, let's go back and review this letter from the CEO very specifically together, right? And so, trying to not train people but get them in the habit.
15:00
bit of reading those because that's your best thoughts as a leader in regards to where you're headed as an organization, it's a great way to condense down those thoughts, which, you know, I have this issue as a waiter, like, sometimes I'm just in my head, right? Like, I will intensely think about doing something. And then in my head, it's been done, even though it has not been done, or I'll think about saying something to somebody, then I won't say it, because I feel like I've already said it. So it's good to just sit down and get those thoughts out. I'm gonna read some of mine. And we'll get to that here in a second to kind of have an example of what that looks like. We got a good question from Tommy. He's asking how much does YouTube affect your brokerage business, lead generation, etc. I've considered doing it myself, but don't want to waste a bunch of time when I could otherwise be on the phone dialing away. I love this, Tommy, because it's a
15:49
great point to make. You know, YouTube is taking away from time that I could be doing something else. But the way that I've looked at it is and you know, I'm sure Logan's gonna have his own thoughts, too, with with everything that he's done on LinkedIn, and his podcasts and everything as well. But you know, it's YouTube is evergreen. So the the one hour that I put into a video back in 2020, is still working for me today. Whereas that one hour of phone dialing that I did back in 2020, has done nothing for me in the last four years, outside of that one day, right? Or maybe that one week. I mean, I've got a video that we put together as literally almost four years ago, in three days, I believe is the first YouTube video ever posted. And it has over 150,000 views, it's still bringing me leads to this day. So I highly recommend it. If you're gonna put a bunch of effort and time into it, don't let it take away from your prospecting, find a different activity for that to take away from or just add another hour or two to your workday.
16:52
But I look at YouTube as more of fishing lines, right? Cold calling is hunting, you're going out there and you are hunting for your food. Whereas YouTube is fishing, I'm just doing a lot out there. And I'm waiting for somebody to take a bite. I'm not really actively doing anything. So it's, and we're going to talk about this today, it's sales versus marketing. You can not stop doing the sales, because you only want to focus on marketing. So I hope that helps other YouTube's great, it's over 50% of the leads in our business now. Logan, what about you?
17:22
Yeah, so I'll take it in a different direction, not on the YouTube but on on LinkedIn. And I will just break this down, the question becomes, you know, where should my time be spent? Right. And I think that brand presence now more than ever, is extremely important in the commercial real estate industry. And more and more people are utilizing LinkedIn and YouTube and so searchability, right, if somebody says, looking for investment properties in Nashville, looking for investment properties in Kansas City, I would highly, highly, you know, think that one of the pieces of content that I have put out, or Tyler has put out is going to pop up to the top, I can guarantee you that if you've posted something about that on LinkedIn and tagged it correctly. LinkedIn searchability, SEO is top of the top. I mean, it's unbelievable. They have these new articles in regards to artificial intelligence that you can go and be a contributor on the only reason they're doing that is so that they can own SEO. And so when you search Logan Freeman, Kansas City, I guarantee the first thing that pops up is going to be my LinkedIn page. So that's that's kind of the biggest point on that, that front, but where should you spend your time? Well, we utilize LinkedIn and YouTube and pieces of content in our prospecting. Right, so you make content that you are going to be able to share, or that you can follow up with the person that you just called with, you know, hey, I just did a video. It's the five things sellers should be thinking about in today's market environment, preparing themselves to getting their property ready to list, boom, you pop that video, embed that video into your email, make sure that that link is from loom or some other resource that you can tell that they've clicked it and see how long that they watched it. And now you've got a great a great follow up piece to kind of call those people back on so I think that's a big that's a big component of what we're doing is making the prospecting easier through the marketing channels. You know today, Tommy, I would love to hear your answer to this. But you know how many LinkedIn posts how many YouTube? How many pieces of content did you get out today? Let me ask Tyler Tyler how many pieces of content did you get out today on all of the social medias? Oh, man, that's a good question. I mean, I'm thinking probably two to three Instagram Stories. We're doing this I've got another pre, you know, I guess produced video going out on YouTube at 530 today. So today's actually a light content day that's four to five pieces of code.
20:00
content. I mean, you come at me on like a Monday or Tuesday and sometimes we'll have 20 plus on a single day. Okay, so a one percenter just said a light day is four to five pieces of content. That's not that you spent four to five hours. putting that all together today, this has been planned. This has been scheduled. Today, I've got three pieces of content going out on LinkedIn. I've got this video. And I've got emails going out on my email list, right? So I'm putting out 678 different lines today to hope to catch some fish, right? And so every single day, there's three to five different pieces going out on different social medias in time to answer that question for yourself. You know, I was training up to new brokers, and I was like, hey, I need you guys to get three LinkedIn posts out this week. By the way, today, I got three out myself, right. So and you can't just get this fall right into that category. But if you put a system together of content creation, which we will be teaching people on how to do, but Google that, I mean, it's really simple. There's a lot of great resources out there, and you got to find out what's best for you. But put that system in place. It's just a part of my day, right? Honestly, people say how do you post on LinkedIn all the time? Well, let me tell you how, you know, I get a lot of emails from you know, different newsletters or journal articles that I'm, I'm reading, I classify those into a
21:24
Google folder on my on my Gmail says, articles, potential posts, I get on my treadmill, I start my walk for the morning, warming up for the workout, pull up my phone, pull up that list, find one that was interesting to me, I write out a piece of content, I send it to Jack GPT and say, make this better, it sends me a version back, I remove some stuff, I add some stuff, I create a graphic, or I post something else, or a picture of something, and it's up, right, it's into my routine. And so it's my identity. It's my habit now that I'm doing on a regular basis. And, you know, I already have a pretty good sized following on on LinkedIn and good impressions. But the last, you know, I'd say six weeks that I've been posting, not just something on commercial real estate, but something on mindset and personal development as well, with a video, you know, I have a goal, I think I've got a video out every single day for the last 14 days on LinkedIn. And my impressions are up. Almost 25 35%. And so that's just been incredible. For my, my whole my whole, you know, focus on on social media. So I know I've got some video issues going on here. Tyler, I'll, I'll get those figured out. You can still see me but I'll get it figured out here in a second. Yeah, no, we can hear you. It's totally fine. So yeah, I mean, the thing that I was going to add to that was, you know, Tommy, I mean, once it becomes top of mind, you'll start to and I love how active you're putting in the live chat, by the way, and this is great. You know, once once you start thinking about it, but it becomes top of mind.
22:53
And, you know, when when Logan was saying earlier, where should you spend your time? I mean, the first thing that popped into my mind was Well, damn, there's a LinkedIn post right there. You know, as as a CTA, and I guarantee Logan's gonna have that out sometime this week. But it's like, you know, hey, as a CEO, where should you be spending your time? You know, there's there's so many different directions that you can take that right, like, you might feel guilty for spending time going on YouTube, when you should be making calls or, you know, you might want to cut off early to go spend time with family. You know, there's all sorts of different things. Logan, it might be that you just need to turn the camera off and turn it back on since it's a Canon EOS M 50. You called it man. Yeah, I think you hit the 30 minutes. Yep. Yeah, I know. It's frustrating.
23:38
I don't know why they do this. For those of y'all that are listening on the podcast. If you have a Canon EOS M 50 Or a camera that is not technically called a video camera, it shuts off at 30 minutes. Okay, well, while Wogan is doing that, I'm gonna go ahead and read for you all my, you know, some some
23:56
parts of my letter from the President. And here goes. One of my favorite quotes comes from a mastermind that I attended in 2017. There is no such thing as bad weather, only bad preparation. And that's exactly how I feel about where we are today. There is no bad commercial real estate market, only bad strategy. The key is to adapt your approach based on current conditions, but the right preparation, due diligence and a solid plan that accounts for whatever may come our way. There are always opportunities to be found in any market cycle.
24:32
Oh, let's see here. Whether it's capitalizing on growth or a dramatic up swings, looking at you 2017 and 2021 or uncovering value during downturns. Success depends less on timing the market and more on blocking and tackling day in and day out. All it is is prospecting. I mean I had I had you know one on ones with my brokerage team this morning. And I was telling them all this like the guys have some incredible deals that are either under
25:00
or contract or literally just got closed, like we I had a check, a nice check dropped off yesterday.
25:09
And I said, Look, you guys, you guys have some incredible things on the horizon. But if you were prospecting just a little bit more every day, every week, you would double or triple the amount of deals that we're talking about you guys getting closed. And it's not that they have, you know, too too few deals on their books. It's just that if you commit to prospecting, day in and day out, you're going to win. It's momentum builds momentum. I mean, come on, do you think you're better than Bob Knakal dude sells one to $2 billion a year of commercial real estate, and he still wakes up. And the first thing he does is make cold calls, you are not so much smarter than Bob Knakal that you can avoid making cold calls and dropping out fires. So there you have it for for a little,
25:59
you know, little script for my letter to the President. But let me get into my numbers from this past month. Tyler, did you did you mention the because I actually shared this with my team. But you went through the process and the exercise of showing them, you know, through your conversion rates that you have proven in your business? If you take this amount of activity per week, this is what your income could be. Did you walk you walk everybody through that? No, no, I have it. But let's go ahead and do that. So I got I got frustrated with with the lack of prospecting that we have. And we're not alone in that, right? Everybody in the world that is in sales has an issue. Every now and then when it comes to prospecting because you get lazy or you get too many great deals on the books, you think, Oh, this is never going to end. The pipeline always empties out. So I told my team, I was like, Look, if you just hand out 50 flyers a week, we have a seven and a half percent conversion rate on those. If you call 50 cold calls per week, we have a point seven 5% conversion on that, that will generate 16 and a half leads a month
27:10
opportunities, which is 198 opportunities a year. Right. So on 198 opportunities a year, I would expect somebody that's good to close 20% Somebody that's, you know, 10%, right. So let's just say it's a 15% average close rate. That's $15 million closed in sales. And based on our commission structure, that's about $350,000 that the agent would earn. And based on the amount of flyers that they would hand out and the amount of cold calls, they're getting paid $70 For every flyer and every cold call they make. So I said, Look, guys, if you just do 10 flyers a day, that takes you less than an hour, make 10 cold calls a day, that takes less than 30 minutes. I mean, let's be honest, 80% are not answering,
28:00
you're making $1,400 a day just by doing that. So I think it's really important to do that math and dig into those things, because it helps reframe why you should go hand out as many damn flyers as possible.
28:15
I think that's crucial. Being able to showcase, you know, you may not feel like this business, you may not feel like that that minute, because you're not getting a check for you know, $70 every single call that you have, right. And that's a tough thing. That's a tough mental hurdle to get over in this business. It's all sales, that's all sales, right? But you've got to be making those deposits those daily deposits every single day, to make sure that that check does end up the prime example of this is I still remember back in 2022, maybe it was 2021. You know, I had done work on these shopping centers that I was selling to a client. And we had three shopping centers for one client clothes on the same day, the same day. And I was looking back and I was thinking about that. And, and the check came and I showed it to my wife, and I was like, You ever seen that much money before? And she was like, Oh, what did you do? And I said, you know, honestly, I put together all of the time that I had spent on this day, you know, this, this this deal in, in my time per hour is was was easily 12 to $15,000 per hour that I had I had gone through and worked on this project. Now how did I get to that point? Well, I made a lot of deposits, you know, on LinkedIn on the phone on actually going out and canvassing for deals. That would obviously bring that per doubt per hour down. Right. But that's hard to to keep track up. But at the end of the day, I think that if you can make those daily deposits and you can really frame up what each activity is worth, then you know exactly where to spend your time and you're gonna stay inspired not just motivated to keep doing the work. Yeah, I mean, I had a deal just like that we used to represent. I always loved food and Bev
30:00
reg tenants on the tenant rep side because they're so cool. But damn, do you spend a lot of time and make no money. So I mean, there were deals where I'd spend 30 plus hours on him and get a check for five grand. And you know, it's not the worst thing in the world. But that sucks. And then I had a triple net investment, this was back in like 2017 2018, a triple net investment that we sold, I spent four hours on it. And it was a 57 or $58,000, commission check. And I was like, oh, yeah, I think I should focus more on Triple Net investments, because I clearly understand this market well enough to where I don't have to invest too much time into it. But it's because of those smaller deals, making $5 an hour that I was able to get to them.
30:44
As far as my metrics for the past month go. So q1, I gave the team over 150 leads probably closer to 200. I don't have a great tracking system. That's one thing that this this mastermind between me and Logan has honestly made me start to realize, I've got to find a better way of tracking everything. So I'm working through that. We got $3.9 million in closed deals, which if you were paying attention last time in February means we literally closed 600,000 hours of the business in March. That's rough. That's a that's a really rough month.
31:20
Our pipeline is currently over $45 million.
31:25
On the positive side, man, we have picked up a lot of clients, the guys are crushing it. They're busy as ever. They are working with a lot of buyers, tenants, and we've picked up a bunch of listings. But the biggest thing, you know, and of course over the quarter, that's 11 deals close. So only one deal closed in March.
31:43
Biggest thing that I'm working on with the team right now is is the prospecting. You know, I had a conversation with my board. Which Yes, I have a board. I'm a small company, but everybody should have a board
31:59
about the sales versus marketing conversation that I need to have with the team. And Logan, I want to bounce this idea off of you, because you were the one that really kind of framed it in this way. And
32:11
it's not an uncommon problem. Hell, I had that same issue when I was a young broker, right? Because you get into this like, Oh, I'd rather I'd rather make a LinkedIn post and make another, you know, five phone calls?
32:24
Will you touch on the difference between sales and marketing and commercial real estate? And the importance of both? And the unimportance of both? Yes. Okay. It's not, it's not about you know, just who you know, it's about who knows you. And I like to think that marketing is this hidden gem that many people overlook, because it's very hard to track, it's very hard to measure, it's very hard to showcase and attribute sales to marketing, you have to ask, where did you find me? How did you find me? When did you come through, it's very difficult to, you know, put an actual measurable to all those different functions of the business. However, if somebody is searching for commercial real estate in Nashville, or in Kansas City, the first thing they're going to do is Google, and they're gonna see, okay, here are the four or five things that pop up, right? Well, hopefully, your, your firm and you as an individual are one of those people. Now, that's just this is just marketing, this is brand awareness. So if you even if we just kind of reframe marketing as brand awareness, okay, because brand awareness is step one, but then education is step two, you have to be able to showcase with your online assets that you are a knowledge, knowledgeable, credible, experienced person in the field that you are communicating about, okay? So through that somebody might start following you, you might have some sort of opt in, where they can follow you now they're on your list, or if it's on LinkedIn, they just might lurk you for months and months. A prime example of this is I post a lot about retail real estate on LinkedIn, commercial real estate. And I was just chatting with somebody the other day that found me on LinkedIn, dropped into my DMs and said, Hey, my, my wife's great know, my wife's grandfather owns a shopping center in this part of town, trying to figure out what to do with it. I know that you post a lot about commercial real estate on LinkedIn. So I thought I'd reach out that led to a phone call, which is now leading to a broker opinion of value, and likely some sort of, of opportunity for us to work with this individual. So where was sales and where was marketing? Well, I'll tell you, the marketing side got it all the way to that phone call. The sales side was just me having a 15 to 25 minute phone call on my way to pick up my kids from daycare one day and just built credibility on that phone call. That's all the sales
35:00
that I had to do up to that point. But I would have never got that lead. If they wouldn't have found me through marketing. So many people say, you know, I need to focus on prospecting, I need to focus on prospecting. Yes. But we moved from an age of information asymmetry, meaning the brokers used to have all of the knowledge, all of the information, all of the experience, then the internet happened, and then costar happened, and then CoreXY happened. And then artificial intelligence happened, people now are in information parody, they might have access to more information than you have. And so that is no longer the way to be able to sell. So you have to generate through the brand awareness through the education through the marketing side, and then the sales side, which is prospecting, right? And or being on the phone being in front of people being in person meetings, you have to ask the hard questions, you have to show that you are owning the process, the sales process, here's the next step, here's what we're going to do. Here's my deliverable. Here's your deliverable, all those components, and there's a follow up. But if they're not going to find you first, guess what they did, they found somebody else that's already online. And now they're having a sales conversation with them. And so yes, you always need to be prospecting. But if you can augment your prospecting with marketing that is creating inbound leads for you as a salesperson, then you can keep your pipeline full at all times. But many times what people happen, what happens to people is, they go all in on one or the other. And I think that's where the mistake and the common misnomer is. And that's the misconception, I got to do all this marketing, that's going to generate all this leads for me, and I don't need to do any prospecting or I need to do all this prospecting. But then I don't have any marketing assets to help educate, nurture, or, you know, get build trust with this individual, because I can't be on the phone with them all the time. And they only focus on the prospecting side. So if you can combine those two together, and work with within both of those bounds, then you're able to keep your pipeline going, then you're able to take somebody that you generate from a sales call, put them into your marketing funnel. And you know, 3456 weeks later down the road, you have a real sales initial meeting, but you didn't have to do all that work to take them from point A to point B, because your marketing is already doing it. Yeah, when I was when I was in high school, you know, I grew up playing guitar. And I forgot who said this to me, but it stuck with me for years. And it was it was the greatest guitarist will never be known, because they play alone in their room.
37:30
And man has that that stuck with me so well, because it doesn't matter how great you are at playing guitar, if you're not willing to go play in front of other people, no one's going to know who you are. And it's the same in sales, right? It doesn't matter how amazing of a sales rep you are, if you're not willing to get out there in front of people and show them or you know, demonstrate those abilities. You know, you'll still do great, you'll do phenomenal, but I mean, look at Alex from Ozy. You think he's a great salesman, of course. But damn, he's a better marketer. Right? I mean, now because of his marketing and sales skills combined, due to selling more than he ever could have if he was just focusing on sales. So it is a it is a delicate balance between the two. So yeah, appreciate you diving into that Logan. I mean, obviously, it's been an uncomfortable, month and quarter for us, we're $15 million behind on our goals for the year.
38:24
We're aiming for about 20.4 9 million.
38:29
For q2, we do have enough in the pipeline and enough active deals under contract that I feel confident we're gonna get pretty damn close to that if not hit it. And I've got some ideas on how to encourage the team to prospect more, including some challenges like, you know, we might we might go do a team prospecting, you know, flyer handout session on a Friday morning from eight to 10. Whoever hands up the most flyers and gets the most calls gets $1,000 donated to a charity in their name, something like that. Because it's like, you know, let's let's have some fun with it. Let's gamify it. Let's see who's better than everybody else. We're all sales reps, right? Everybody wants to compete, even if it's over nothing. So that'd be fun. Logan, what about you, man? How was how was March and q1 for you? So q1, we also fell very short of our $8 million goal of selling you a million dollars in real estate, we sold $2.5 million of real estate, I thought would be an interesting experiment was to go back to look at q1 of 2023. And so we did seven deals and $15 million in q1 of 2023. We did one deal or two deals, and 2.5 and q1 of 2024. Well, let's look at q2. q2 of last year. We did five deals and $5.1 million. And in q2 of this year, right now, we have $10.2 million of under contract deals and another 7.5 million of listed so our pipeline is close to 226% Higher
40:00
For q2 to execute on than what we executed on in q2 of 2023. I look at that. And I'm like, Okay, well, why? Why is that the case? Well, I had to dive in, you know, I had to understand that in q1 of 2023, we had a lot of carryover from q4 of the previous year. And we were highly focused this year on getting listings and getting exclusive agreements out in the q1. That took 90 days, but we put $17 million into the pipeline of active deals either listed or under contract. And so I think that while I was a little bit disappointed with our numbers from q1, I was not disappointed with the activity that we put in because of the pipeline that it has generated for q2. And so when I was thinking about this, I also went back through and said, Well, what what else did we do during q1? Okay, well, let me just list these things off for everybody. We on boarded a new CRM, we created a new one I'll call lead magnet and funnel for buyers, being interested in Kansas City, highly focused on an email education program and wrote a 50 page ebook called The KC deal navigator, which will allow my team to point direction from traffic on LinkedIn, on podcasts, and all the different mediums that we're utilizing to this one place where somebody can sign up, go through seven emails, and then at the end of that, they're gonna get a 50 page ebook. And we can track where they're at in that process. That was huge for us, we completed over 13 case studies. So we can showcase what we did in 2023. To our clients in 2024, we held multiple events, we started attending a local networking group called Mid America real estate investors. And we brought on three new team members in q1 of 2024. And so thinking through that, I was like, Man, there was actually a lot of activity that got done. And a lot of big projects that we really knocked out, however, we fell very short of our number one rock, which was to sell $8 million of real estate. So this quarter, resetting the rocks for q2, you know, I took a look at what we have under the pipeline, which is about $17 million. And I said, Well, let's put a and what else can we add to that pipeline to close this quarter, right, and I just kind of put a conservative number on there. So let's get another deal, we got to execute on the under contract and the ones that are listed, so there's a lot of work to be done there. But we need to add some additional pipeline to close this quarter. Well, we know that we need to get that in the in the hopper probably in April or early May to be able to close. So I added another 3 million. So our goal is to is to accomplish $20 million worth of real estate, we're launching the KC deal navigator complete with case studies, were onboarding and utilizing the CRM data daily, we've got 80,000 property records into this now, we've put all of our pending and active members from our marketplace into the CRM so they can actually start receiving calls, the buyer funnel is completed, and we're going to be launching that. And then I'm looking at filling and implementing a resource in the data gaps that we have in our in our database. So our team has, you know, either that be reonomy or seamless.ai, or some other resource that we can find those contact information and have the property information that we need to be able to prospect, we also added 17 million, I don't track this because it's by side. And it's very difficult unless you actually do get an exclusive agreement to represent a buyer. But we added $17 million worth of buyside pipeline. So that's not showing up in any of these, these metrics, I only track active deals, which are either listed under contract, or we have an exclusive agreement signed with somebody as a buyer, right, that's the only things that I'm tracking. So we did add an additional 17 million meaning the the new brokers that I brought on, I know at one week alone, they had eight calls with new buyer leads that I generated off of LinkedIn. And so if I can get them to, you know, develop 1015 20 of those every week, I know that they're going to find one buyer that's going to buy some some deal. So I'm helping them get to the point where they're feeling comfortable running those calls. We have 540 active people that have said, I'd like to talk to you about Kansas City that have not been contacted that they're starting calls on today. And I know that if they call 50 of those a week, they're going to be able to set five meetings out of those five meetings, we're going to be able to get one new buyer client, and that pipeline is going to start rolling. So the goal is $20 million. This quarter, we got 17 million of active we need to go add three more million to close this quarter. And I'm looking to add another $5 million of pipeline to closing q3. So that's kind of how the q1 wrapped up for us. Man, it makes me realize like one thing I needed to dig into a little bit more is our average time to close. That's not a metric that I've ever really tracked. And then you know average time to close based on deal type right? Is it 10 a rap is it landlord rap
45:00
Is it by a rep as a sales rep, and then average value by deal type? Right? What is the value of representing tenants? What is the value of representing landlords? I mean, you know, we've we've looked at completely dropping tenant rep and leasing, altogether multiple times. The problem is that it ends up maintaining a good relationship for the client, it helps us be more involved in the project. So in the future, we get to stay involved with the deal. But you know, it's always one of those kind of loss leader type of things you just really have to do for a client. But I mean, the reason I started thinking about average time to close,
45:38
it is very difficult for me to be able to add anything to our pipeline today, and expect for it to close in q2, because of the way the types of deals that we're typically doing. Are you are you seeing since you guys are more focused on 1031 exchanges, I guess it's easier for you to predict like, Yeah, this is closing this quarter.
45:59
Absolutely. And we don't do any leasing. So it's investment sales. So I mean, honestly, like, for example, we got a three and a half million dollar project that was off market under contract and negotiated a 30 day close, right, and we got to the appraisal done, we got we got the seller, concession negotiated, and that's closing tomorrow. So 30 days ago, that got put in the pipeline. So we have a better feel for when deals are going under contract, based off of when the appraisal is coming in, obviously, and where the financing is lining up on when these deals are going to close, because a lot of times the equity is already lined up, they're not raising the equity, they can transact very quickly. And these are smaller, you know, deals 500,000, you know, three and a half million dollar deals, and so not a lot of agency loans being utilized. So banks can move a little bit faster. And so but I do know, you know, like, for q2, I'm not gonna say if it's May 15, though I'm here, you know, a month from now, and I'm saying, you know, we've got a deal under contract today, highly unlikely that it's going to close by the end of June, right? It's 45 days on the button. And so I'm pushing very diligently right now to say, look, we've got really these next two weeks in April, we've got the first week in May, we need to get some deals under contract, what do we need to do to do that? Right. And so that's the activities that I'm focused on. Right now with the team. I mean, I know you guys are obviously branded, and this is 100%. What y'all do is 1031 exchanges. But what are you doing to market to those buyers and attract them to Kansas City? Are you guys doing only 1030 ones in Kansas City? Are you representing them at all of the country? What does that look like? Yeah, just Kansas in Missouri, up to this point. And you know, so the marketing that we do is, you know, a lot of people aren't necessarily familiar with Kansas City. However, the last two years have really put kansas city on the map, go chiefs go chiefs.
47:51
Taylor Swift, women's soccer stadium, first one, all the SEO right here. I mean, all of the different things, right? All the Swifties are now thinking about Kansas City and all those daughters from those, you know, from those dads now, they're like, wait, you know, Taylor Swift is where she's in Kansas City again. Where's that? Well, it's in Missouri, not Kansas. Oh, okay. And so, that is been huge in regards to just putting it on the map. And so we highlight that stuff. And we say, okay, but it's not just the fun things that you're hearing. There's affordability, there is there are jobs, rent growth, right, Indianapolis, Kansas City, Columbus, Ohio, everybody continues to see those three, why? Well, the supply on the multifamily side is not been built, like it has been in other markets. And so that's generating a lot of interest from Kansas City, because it's hitting lists from real page from CBRE, you know, from all these different, you know, lists and newsletters that people are starting to see. And so we highlight the heck out of that on on Kansas City really understanding why. And so in the part of the KC deal navigator, I broke down all the sub markets in Kansas City, what are the what is in a sub market? What is a b sub market? What is a C? Okay, and then where in Kansas City? Are those sub markets, right, and so putting a lot of education around knowing where to invest in Kansas City, and then obviously, you know, looking at saying, Okay, well inside of that sub market, if you're looking for Class B properties, there's 170, that fits your criteria out of those 170. I've got about 50 that I know that would sell out of those 50. You know, here, here are the ones that I've got contact with. And let's start evaluating those transactions. And so that's kind of the funnel and the way that we approach that in marketing around Kansas City. And the way that we do that is through LinkedIn is through our emails that we send out on a regular basis to our buyers list is getting on podcasts and talking about Kansas City, and then redirecting them to some resource that they can log into and learn about all the different things that Kansas City has going on.
49:53
Yeah, it's pretty interesting because yeah, I mean, the nice thing about HubSpot is I can go in here and look at like the types of deals closed and what
50:00
percentage of business and makeup so far this year retail leasing, which is crazy, is 46 and a half percent of our business.
50:08
land sale and development is 24%. retail investment 16.
50:16
Let's see office investment 10.26. And but I mean, if I start to look at things, you know, historically retail investment is by far our biggest but 54 set, followed by retail leasing and development, land sales. So some live coaching right here, what you're going to get inside the brokers mastermind is he just said 46%, this year is making up the revenue of commissions from the from the business. But historically, retail sales have been the highest. Now, there's two things to think about there. One, retail leasing leads to retail investment sales, it's a leaf. So that's number one. Number two,
50:56
if you can showcase to the brokers, based on the amount of time spent on retail leasing, or retail sales or land sales, what time investment was put into those different activities versus the outcomes, right? Because that is where I think a lot of people also kind of default into well, you know, I can do some leasing today. Or I can do this. It's where the energy go the flow or where your focus goes, your energy flows. And so if the biggest and the most opportune time investment is in retail sales, versus retail leasing, how do you aggregate the time and redirect time from the brokers to be focused on that instead of the retail leasing? Right? It's just one of those things to kind of think about is like, you know, the time that you're spent in you're putting in is is equating to this result? Well, historically, it's been this. So should we reallocate our time to doing more of that now, that's also market dependent, and where people are at in regards to the interest rate environment and all those different things. And so it could just be well, this is what is available to us to actually do. But that helps the forecasting for future quarters, because if you know you're leasing up a property, well, Good golly, that person better be focused on what's that's leased up, going for the investment sale, and they can't go for the investment sale until it's leased up. Right. So it's kind of creating those steps to take for each individual. I think that's really important. And this is more of as you're a CEO, or a leader of an organization of a commercial real estate brokerage. Sometimes we got to get in there, we got to play. We can't just coach we got to be player coaches. And right now, I believe that it's the time to be a player, coach, I'm highly involved in every single one of these deals. Hey, where are your hiccups at? Hey, do you need me to call the client? Hey, property managers not answering the phone? What can I do? Let me take that off your plate? Hey, did you think about you know, breaking up those parcels and doing individual listings instead of a package listing? I am really involved in these deals that are stale and or we've brought to market. We've got six active listings right now, I made sure that there's a cheat sheet for every single broker in the in the company that knows what the listings are, what the talking points are, what the story is. So when they're calling buyers, they can communicate that very effectively. So I think it's right now it's really important to be involved in the sales transactions part because it's a, it's just taking a lot more time and a lot more expertise. And maybe as coaches, we can unlock something to help that deal move forward. Yeah, it's taking a lot more time. I mean, the thing that I'm trying to solve for right now, because the the excuse that I'm getting, and it's it's a legitimate excuse is that the retail investment buyers are there.
53:48
The lending is not, and that's what's causing all of the issues. And I completely get that I mean, it's it's tough commercial real estate, is a leverage game if the leverage suddenly disappears. Well, there's no point I'll just wait, right? I mean, a lot. We've got a lot of buyers that are looking at this, saying, Well, why would I get a seven 8% cash on cash return in commercial real estate today, when I get 5% Treasury bonds with zero risk? It's like yeah, I mean, it's fair, but treasury bonds are gonna go down here in a little bit, you're gonna have no returns there. And commercial real estate is going to appreciate in value significantly more so we're trying to combat
54:26
interest rates. I mean, I think that's the biggest reason. Here's, here's why, Mister, mister investor,
54:35
commercial real estate price index lowest it's been in two years. Do you believe that it's going to stay there? Or do you believe that as the stock market comes down, people are going to take cash out and put it into more safe investments, more tangible, more tangible investments. If we look at the 18.6 year real estate cycle would lead us to believe that the next two years commercial real estate is going up in
55:00
price. If you've told me that you have a long time horizon, and you have cash available to deploy, why would you not right now, go buy that deal fully cached or 20 30% leveraged, wait for the interest rate environment to come down, refinance that deal. And now you have a great deal at a great basis on a great interest rate. Right? So creating some sort of taught track around that that's kind of fork forward. Right? It's like you're challenging their investment thesis but that's what they're asking you to do. And commercial real estate brokerage sales is you be the leader and the guy to show them that there is another way Yes, I know you financed all of your acquisitions up to this point. But do you have investors that would be fine going in right now at six to 8% no risk because there's no debt not no risk, very little risk because there's very little debt
55:53
and then go and wait and do refinance when you can at a later time. That's the that's the top track that you've got to have. I got cancelled once again, here on
56:03
the cobble group, the commercial real estate investor podcast. Tyler is canceling me once again. So I'm off the video. Logan has lost his video get I've nothing else to add to what he just said. That was phenomenal advice. Logan, appreciate you dropping that value bomb. Y'all. If you're interested in more commercial real estate brokerage coaching like that. Join the mastermind get on the waitlist brokers mastermind.com We'll see you all there. 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
Each week, I'm going live at 8:30am CST for my "office hours" to answer your questions about commercial real estate on the show. Let's hear what you'd like to know when it comes to brokerage, investment, and development!