If you’re a real estate broker (or any other kind of sales professional for that matter), you ought to google yourself periodically. Many if not most prospective clients are doing this to you. What does your internet presence look like? Anything embarrassing out there, from the obvious (provocative pictures) to lesser offenses? make sure you look good. This is the era of the instant background check.
1. Don’t return calls within 24 hours. People love knowing you’re a low priority.
2. Don’t ask for business. People are going to go out of their way and offer it to you, aren’t they? You’re nice!
3. Golf a lot. Rationalize it by convincing yourself you’re cementing a client relationship.
4. Check your email and blackberry constantly and reply to emails at all hours. It’s a great way to lose focus…it’s amazing how the days slide away and you realize you haven’t actually done any selling!
5. Convince yourself that you’re not a salesperson but a some sort of glorified consultant. Inflate your ego accordingly.
6. Take your clients for granted and don’t thank them for the business.
7. Don’t service listings. Put up a sign, put the building on the internet services like costar and loopnet, and forget about it. Hope the phone will ring. Don’t be proactive about marketing.
8. List everything in sight at whatever crazy sale price or asking rental rate your client wants. Running on the hampster wheel is fun!
9. Try to do residential and commercial real estate at the same time. Hanging onto that residential security blanket sure feels good.
10. Spend most of your time working with investor-buyers. Generate lots and lots of offers without any control over product.
My overseas telemarketer is averaging 1 to 2 leads a day. These are decent leads - out of 6 total there were two prospects that indicated an immediate need to lease about 10,000 sf of warehouse space each.
A commission on a 10,000 square foot warehouse lease might conservatively be $10,000. Generate 12 of these leads — I’m imagining some will be bigger and some will be smaller) and the gross result is $120,000 less my split with the house. I’ll give 1/2 the commission away to another broker and let them do the bulk of the work and make $60,000 gross. Split with the house (figure I make 65%) and that’s $39,000. The cost of the campaign (which the company may pay all or 1/2 of) for a year is $10,000 for the dialing and $7300 for the lists. So a profit of about $22,000 for little to no work. I can only hope things work this well. If so I could see myself hiring a whole room of telemarketers and expanding the operation.
my indian telemarketers have generated 4 leads over two days of calling. One deal could pay for an entire year of their efforts! Go go go!
I’ve been in touch with Your Man in India about getting a personal virtual assistant.
I’m going to experiment with having him/her handle tasks that keep me away from sales related activities, e.g.,
-personal calls to companies, vendors, etc.
-Following up with prospects that have visited my listings (following a simple script. I will handle the most important leads and any work that requires a real estate license)
-maintaining marketing reports
-maintaining my database….particularly bulk additions to the database
-market research
This is all to supplement my company-provided in-house team. I’ll keep you posted on how it goes.
This is a complete generalization. Fees can be higher or lower. Just thoughts about the appropriate range:
Up to $3 million - 6%
$3-$5 million - 4% to 5%
$5 - $10 million - 3% to 4%
$10 - $20 million - 1.5% to 3%
$20 million to $40 million - .5% to 1.5%
over $40 million - .75% or lower
Fees tend to top out (with sophisticated sellers) in the $500,000 to $1 million range. That said I have heard of much larger commissions being earned.
Market rent growth is as important, if not more important, than in-place cash flow. Novice buyers focus solely on barometers of the “here and now,” e.g. capitalization rates and in-place returns. Learn to make cash flow projections and calculate an internal rate of return. You can buy a fancy program from Argus or you can do it in Excel. Don’t know where to start? Take the ccim 101 class. Take all their classes for that matter. They will pay for themselves many times over if you are making a career in real estate. Doesn’t matter if you’re flipping houses or buying million square foot warehouses, it’s a great program.
If you’re considering making a switch to a career in commercial real estate brokerage, prepare for at least a three year (yes, three year) ramp-up. That’s because the cycle of the transactions — whether sale or lease — is so much longer. It takes the patience of Job, and of course, brass balls, to sell real estate.
A mentor once told me, “the first year you weep, the second year you creep, and the third year you leap.”
