By Arthur Perlen, CCIM
For most of us in the commercial real estate industry, the journey is anything but linear. I had a successful first career as a retail entrepreneur. When I was interested in real estate, colleagues in the industry were quick to offer me a start in their firms, but I knew those were temporary options. It wasn’t until I met someone from a larger commercial firm (during a CCIM class) that I was invited to have the conversation that set my course. They specialized in office and industrial, but suggested I give retail a try. They reminded me: “You’ve been in it all your life, you understand it. You know what it takes to run a retail business. Go for it!” And I did.
Now with over three decades of experience in the business, I’ve thought a lot about what it takes to get established and what it takes to be successful in building a career in commercial real estate.
My interest in real estate started simply because I enjoyed the investment aspect of the industry and understood a little bit about it. I was a small investor in some real estate transactions. When I was considering the next chapter of my career, that initial exposure was enough to get me into conversations with friends who were active brokers.
Many brokers, like me, want to talk about our experiences. (We are just waiting for someone to ask!) We’re happy to share. From my perspective, and the perspective of a lot of commercial real estate brokers, mentoring is the giving back portion of what we do.
Assume you don’t make any money for the first 12 to 18 months. That makes some people afraid to join the industry, and sometimes it makes it impossible. If they don’t have a spouse who’s got a job, or some personal money, it can be very difficult to make that happen. You eat a lot of ramen because you recognize that your investment is your time.
While you may not make any money during that 12 to 18 months, you are getting a return on your investment. It’s just an intangible return. It’s your education and the experience that you’re getting. It’s like going to college… but here you are actually learning practical things.
Over time, you start building on what you’ve learned and who you’ve met, increasing your knowledge of the business and the market. You learn every aspect of a transaction, from introducing someone to the property, or on the other side, to obtaining listings. You understand what it takes to make those relationships. You understand the deal cycle. You understand how many things you need to be working on so that one of them actually ends up in a payday.
After that 12 to 18 months, it becomes decision time. Is it for you, or is it not? By that point in time, you know what the business is, what the commitment is, and you should have a sense of how it gets done. You’ve invested those 12 to 18 months to make an informed decision: is this career for you?
The first thing I did was to start taking CCIM classes. I may have had a little bit of understanding of what real estate was, from an investment perspective, but I didn’t have the vocabulary. That first CCIM class taught the vocabulary and terms utilized in multiple sectors, like “what’s a load factor in an office building”. It was invaluable.
I am glad that the concept of the real estate team has emerged. It wasn’t common when I started, but in today’s world you can come into the business as a junior member of a team and learn from established brokers. Look at it this way: you may come in as a junior, learning the business during those 12 to 18 months, but you get to become a peer with those same people that mentored you. A good mentor makes sure you’re doing what you’re supposed to be doing, and builds the foundation so you can be wildly successful.
A lot of people are scared of what it takes because it isn’t just the 12 to 18 months of not getting paid… It’s sales. Maybe to some that doesn’t sound professional. They equate sales with a used car salesman. For others, it’s the aspect of relationship-building that scares them. A lot of people aren’t “people” people. They’d rather sit in front of their computer and do something that doesn’t involve interacting with lots of people. I understand that. When you aren’t in it every day, sales can sound scary.
Most of the time, you’re going to fail at it. Deals die. That’s the business. Not every client loves exactly what I do, or the information I give them, or the rate at which I return an email, etc.
I heard somebody say once that it’s okay if you have a .350 batting average in Major League Baseball. You’re a superstar. You’re hitting about a third of the time you’re at bat. Well, if a third of what you’re working on in commercial real estate happens, you’re a superstar here, too.
A lot of people hard a hard time accepting that. But those who do reap the rewards. It’s not unusual for a broker to make six figures, and in larger markets they can do seven figures.
There are so many things to love about commercial real estate. I enjoy working. I get to work with people. I constantly learn about my market. I love the transactional aspect.
I get a lot of satisfaction from all the relationships that I’ve built and the people that I work with, and when you do it well enough, you end up putting money in the bank. It’s rewarding both personally and financially.
If you’re curious about commercial real estate, exploring it as a first, second or even tenth career path, I encourage you to have conversations with people in the industry. You’ll start to get a sense of whether the investment is right for you. While it can be intimidating to start, the downside is known, and the upside has no limits. Commercial real estate is a great way to spend your career.
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