Beginning Commercial Real Estate

Having a pretty shallow glance at the real estate, might get you pretty excited about getting started in the commercial real estate for a very obvious reason: more money as compared to residential real estate. But like most ‘money affluent’ fields, this is just the glory side of the story. The other side is often hard to digest and even harder to practice. When it comes to the commercial real estate, connections, vast experience and great credentials are just some of the prerequisites to success. This, in no way is intended at discouraging you from commercial real estate, but it is nice to know where you stand and what you need to do to reach where you want to.

If the earlier part has got on to your nerves, remember, everybody starts somewhere and it is okay to struggle and start small. The good news is that what you have heard about commercial real estate and money is true. Yes, it has more money to offer than residential real estate for a very simple reason. Commercial assets generally cost more than residential ones, and therefore, leaving better commissions for the agents. The problem is that when you are new, you don’t have your network to help you seal winning deals. Even if you manage to reach a potential client, with zero or very less experience nobody trusts you with their commercial properties. They can’t take the risk, they can’t afford to; it’s that simple.

Well, what to do then?

Just, what you would do with any other business. Look for smaller deals. Seal them, scale up and repeat. Sounds simple? It’s simple, but not easy.

Apart from being monetarily fulfilled, commercial real estate is also increasingly lucrative for its variety. There are various career paths one can take and can even make a transition after trying luck at one of them. Before you start wondering about the “best” one, let me tell you, there is no absolute answer to this. You can make a great career in any of the available career options given you are well positioned to succeed in a particular career. It just depends on your individual abilities and skill set that makes you fit for a particular career option in commercial real estate. Before we delve any further, it would be good to quickly go through the possible career options you can take a start with:

Brokerage:

If you are reading this, I expect you to be familiar with this model. Commercial agents act on behalf of buyers and sellers and get a fixed commission when a deal is sealed. Agents work independently and rely on their affiliations with real estate firms and connections in the industry. Generally, agents pick up a specific product type like retail or industrial, and then branch out in the same product type. It’s like picking up a niche and developing authority in that particular niche.

Development:

This career option requires a firm standing in the industry because of the finances and experience required to excel with this business model. A developer is responsible for buying the land, developing it, administering the leasing process and looking over the matters until selling it. Though, some areas of the process can be outsourced, the responsibility to look over the development phase rests on the shoulders of a developer.

Property Management:

Managing the properties include staffing, contracting for services and maintenance of properties. The owner hires property managers who are then responsible for managing the affairs of the property.

Starting out:

• To start out in commercial real estate, you need some connections. If you don’t have any, it would be very difficult for you to reach potential clients and make them work with you. In such a situation, it is advised to get started in residential real estate before, because it is comparatively easier to land your first client this way. Gradually, you can extend your influence to the commercial industry, and then start there. Once you have adequate connections, you can follow the following plan of action:
• Enlist the connections in the commercial real estate industry that can prove to be instrumental in getting your first job.
• Reach out to your friends and family and request them to help you connect with anybody they know in the industry.
• Formulate the list and shortlist people you are most confident about rendering you any possible assistance. Call them and ask for 15-20 mins of meeting. Most people will be generous enough for such a short meeting.
• Meet the industry professionals and during the meeting, ask them about their journey. Keep it friendly and gain as much information as possible by asking them how they got started, hurdles they faced and how they overpowered them. Seek their advice and ask the names they would advise to meet in the industry.
• Research about how things work in the industry. Determine the key players and get your hands on valuable information, as you could. It is good to get acquainted with stuff before starting out. Bookmark industry related websites, read the valuable content and keep yourself updated. Local industry publications are a great resource to gain hands on updates even if you are not in the industry. Join some training classes. They are not only a great source of information, but also provide a viable ground to start building your network in the industry.
• Now, start looking for employment opportunities. It is not a good practice to seek a job on your terms in the beginning. Just get yourself familiar with the industry’s compensation structure and tap on the best opportunity that comes your way. You won’t be immediately earning, but it’s time to start your search, at least.
• In parallel, narrow down your list to five people and meet them individually. Prepare the questions that you will be asking. Remember, you will be meeting will be professionals and they will be turned off by seeing you unprepared. Leave them with a great impression and they can play an imperative role in helping you grow.
• Land a job interview. Unlike most industries, there are not any specific job openings in the commercial real estate. You will reach the interview through one of your contacts and after that it’s you who has to turn the odds in your favour. Tell the value that you can bring to their table with what you have learned. Ask some good and relevant questions. This will present you as a deserving aspirant and hopefully, you will land your first job. If not, keep on trying; the best opportunity doesn’t seize here.