23-year veteran commercial broker David Murphy MAI, SIOR, CCIM addressed the 2012 REALTORS® Conference & Expo Friday morning with a spirited description of the transition from residential real estate to commercial practice. David covered so many critical aspects of this career maneuver, we’ll be returning to this session before the conference coverage is over here at The Source.
To the residential real estate professional, usually the nuts and bolts specifics of beginning a commercial practice is hidden in the unknown. How, and for how long do you work to get a commercial practice off the ground? What do those first weeks look like? David’s answers to the well-attended session at the Orlando Convention Center were numerous and specific, trading in stories from his own career to paint a picture of taking control of a niche, leveraging prospecting, marketing and techniques in research to add up to a prosperous start in commercial real estate.
Tips for The First Month
- Establish a personal brand for yourself. Playing Jack (or Jaqueline) of all trades is a common career pitfall, leading to dissipation. Murphy decided years ago to focus on Central Florida Industrial Real estate, and is known as a top broker in that niche. Pick a brand and focus.
- Farm the area: Just as you would for residential property, look for the types of properties you’ve settled on in your market radius.
- Purchase a financial calculator. Either go with the actual calculator models HP10B or HP12C. If you have a smartphone or pad, these calculators can today be easily found as apps. More than that, Murphy urged, learn the basic keystrokes for amortization and net present value.
- Build a comp summary. Once your select your niche, you now have a responsibility to collect market information about what properties went for what price when. Spreadsheets work for grouping properties, and there are numerous tools online that can help you build comp summaries.
- Continue farming efforts in a different way: around the back. To build a strong foundation in commercial real estate, Murphy advised to “play offense” by picking a specialty and “learning everything about it” starting with driving your market and “farming” for information on commercial properties. A particularly smart information-building farming tactic he advocated was to drive to the back of commercial buildings, park, step out and approach the smokers taking a break. Introduce yourself as a new commercial real estate professional and just ask about the place. This way, a significant amount of information can be collected about a property and its tenant, who they are, what they do, what are the needs and challenges of that tenant and the business more generally. “Smokers can’t really walk away for at least a few minutes,” observed Murphy with a smile.
- Build a database of clients you’d like to do a deal with. Aim at a number between 500 and 1000 clients.
- Don’t telemarket with this list. Call each contact upon it once every three months to offer a recent market report. Remember if 100 calls lead to three listings and one transaction with a $15K commission, you made $150 on every phone call.
You can pick up an audio recording of David’s entire presentation at Playback NAR.