Posted: February 2, 2017 by Paul Cohen, Regional Director
LESSONS LEARNED PART I – TEN TAKEAWAYS FROM 25 YEARS IN BROKERAGE
Before retiring from CBRE (while I still had hair) my team had a twenty plus percent market share in the non-institutional Miami Office and Industrial investment sales market. Here are some things I learned over twenty-five years in the Commercial Real Estate business:
- Less is More: It’s better to be a specialist in a particular area or a product-type than a generalist. However, make sure the marketspace can support you and your team. I made this mistake early in my career. I decided that I was going to be the Condo King (warehouse condo’s) and started doing deals until I realized that I would have to sell 100 deals a year to make decent money. I switched to investment sales!
- Limit Dry Humping: When you’re a young and hungry broker, there is a tendency to work on deals that have very little chance of success. We used to call this “Dry Humping” – a term I coined from observing my neighbor’s dog! Seasoned brokers have amazing instincts regarding what deals (and people) will close. New brokers often spend time with the “Nigerian prince” no one has heard of who needs somewhere to park their money and your social security #. Time is valuable. Use it wisely.
- Needle in a Haystack: Imagine a triangle. At the base is the price that most qualified buyers will pay for a property. At the apex is the max price that someone will pay. Your job is to find that one buyer at the top. The proverbial needle in a haystack. Most brokers can find the usual suspects. I once sold an office building that was converted to a hotel by a Venezuelan airline through a Russian residential broker. Had I spent much more time on it, my team would have accused me of dry humping, but somehow it got done. Outliers exist.
- Pick Your Clients: At first you have to work with every seller but as your practice grows figure out who are the clients that you like and who you can help and look for more clients like that. You’ll be surprised to discover that your top clients are remarkably similar.
- Third Broker: Often sellers believe their properties are worth much more than buyers do. Be willing to turn down those assignments. Not only will you not make money with an unrealistic seller, but you may damage your reputation and worse, you will send a message to other sellers that their properties are worth more than they are. Sometimes “It’s better to be the first son, second wife, and third broker”.
- There’s no “I” in Team: Assemble a team with complimentary skills and personalities. Be honest about your strengths and weaknesses. If you are an ADHD type broker, partner with an analytical organized introvert. A well-organized team of five can sometimes outperform entire firms of twenty.
- Sales and Marketing: Most brokers get the sales aspect of brokerage, but many neglect marketing. You aren’t just marketing properties, you are marketing yourself to sellers. Develop a plan to keep front of mind with your target audience. Market yourself and market your deals. Some brokers are great at sourcing business and some are great at executing business. If you aren’t both, consider finding a partner to work with.
- Don’t Throw Up: When you meet with a potential client for the first time, spend more time asking questions and listening. Way too many brokers walk into meetings and “throw up” on the client. What does the client really need? Don’t assume.
- Got to Have Some to Get Some: I think this translates to many areas of our lives; like jobs and dating, but in real estate you need to have a lot going on to get more listings. Once you get to a “tipping point” (see book by Gladwell) in your market space (about 20%) sellers will start calling you.
- Have Fun: It’s hard to maintain a high-level without having a bit of fun now and again. We had a foosball table in the break room. When the company made us remove it we invented the game of Coastee. It was a fun way to unwind at the end of the day and built team camaraderie.
What advice would you like to share? Send us your thoughts and we’ll put it in the next post.
Paul Cohen is a Regional Director with CREXi based in the firm’s Miami office and focused on business development in the southeast. Prior to joining CREXi, Cohen was a Managing Director specializing in investment sales and equity raises at Cohen Financial, a national debt and equity advisor. Prior to Cohen Financial, Paul owned and operated his own independent real estate firm following a 12-year tenure at CBRE where Cohen was a Senior Vice President and led the Private Client Group in Miami-Dade County with a specialty in office and industrial investment sales. Email Paul