Commercial real estate can present an extremely lucrative opportunity for investors who are willing to take the time to learn the ins and outs of the field.
Pop culture sometimes gives the impression that the real estate business is glamorous or easy, but that's far from the truth. Dabbling in real estate requires time, money, and a certain skill set that the average person might not be cut out for. However, even if you start out as a layperson, the right mindset can help you succeed in the industry and ultimately end up as an expert.
For ambitious investors who are willing to step up to the plate with the proper approach, commercial real estate is like hitting a home run! Below are a few key factors that can make a big difference in your quest to be a commercial real estate broker.
Your Personality and Work Ethic
It is easier to break into the commercial real estate scene if you have prior business and investment knowledge, but it's not a requirement. With the right personality and work ethic, anyone can learn the industry.
According to a survey by Capstak, a commercial real estate services company, some of the key personality factors that are needed for success as a commercial real estate broker include:
- Grit and tenacity
- Knowledge of the market
- People and relationship skills
Knowledge of the market is definitely important, but that doesn't mean you have to possess that knowledge right off the bat. What’s really important is to create relationships through networking, prospecting, and cold calling. The relationships you create over time will be key to your success. When you establish a relationship with a new contact, not only are you getting to know them and gaining access to their expertise, but you’re also potentially gaining access to all of their connections as well. Over time, you’ll grow your own network exponentially.
A Reputable and Recognized Company
It's certainly possible to break into the industry on your own, but working for a recognized commercial real estate company is a great way to get started on the right foot. You get a feel for the industry and start building your network of contacts. Working for a reputable company gives you instant credibility, and fortunately, there are numerous choices to consider.
The Lipsey Company, a training and consulting firm for the commercial real estate industry, conducts and releases an annual brand survey that highlights the top 25 brands in the industry. The CBRE Group usually tops that list -- CBRE is widely recognized as the industry leader, leading the way in total transaction volume for 13 years running. The company recently eclipsed $300 billion in deals annually. Of course, getting to work with a behemoth like CBRE is easier said than done, but the point is, aligning yourself with a big name company can carry a lot of clout. You can start small and work your way up the ladder. If you make the right moves, you could find yourself with one of those top 25 brands.
Your Specialization
There are a number of different avenues you can choose to pursue within the commercial real estate industry. Whether you are brokering deals, projecting or analyzing cash flows, or taking the plunge yourself as a property owner or developer, you can find something specific that you focus and thrive at. Think about your personal strengths and interests. Are you a numbers person? Consider an accounting position. Do you thrive on research and analysis? Maybe try your hand at breaking into the industry as a market researcher or analyst. If you are new to commercial real estate, it's better to start with a smaller role with the goal of advancing up the ladder as you become more comfortable and knowledgeable.
Your Location
Location is a huge factor when it comes to success in the commercial real estate industry. Common sense dictates that there are more opportunities in bigger markets, and the opportunities in those bigger markets are typically more lucrative as well. Some of the best markets for commercial real estate brokers in 2017 included St. Louis, New York City, Denver, Jacksonville, San Jose, Portland, Austin, and Oakland.
If you don't live in any of those areas, it doesn't mean you won't find success, but those cities have proven to be hot spots for commercial real estate in recent years. If you truly want to hit it big, it might be a good idea to go all-in and relocate to a thriving commercial real estate market.
Acquiring Clients
Closing a commercial real estate deal is only half the battle. That is often the easy part for a person with the right personality.
The true test lies in acquiring the funding for the investment. It is no easy task to find clients who are willing to make the kind of sizeable six-figure and up investments that you'll need to truly make an impact. It can be a difficult process to build your clientele base, but if you're willing to put yourself out there and make a name for yourself, you'll find that the opportunities will begin to come more easily.
Actively seek out clients - don't wait for them to come to you. Be sure to market yourself in as many ways as possible. Post your profile on commercial sites, explore social media avenues, and take advantage of your firm's network and marketing materials in order to find clients. You will want to make sure you have an easy-to-find profile on all of the top social media platforms. Your goal is to establish yourself as an authority in commercial real estate on those platforms. Post information, answer questions and do everything you can to make it clear you’re a leader in the field who people will want to work with.
Commercial real estate isn't for everyone, and there's a lot to learn. However, if you have a strong work ethic and a good sense for business, it can be a lucrative and exciting opportunity. Of course, it helps to have an outgoing personality combined with potential assistance from a big-name player in the field. With the right skill set and specialization, and a thriving location can combine to create a huge success.
Follow the Trashcans Unlimited blog for more strategies and tips to get started in commercial real estate.