Please Rotate Your Device
I graduated from business school with my whole life ahead of me. Or the best years of my life behind me.
Entering the workforce as a commercial real estate broker for a national firm was very appealing. It allowed me to be an entrepreneur with a salary ($30,000). Ok, a pittance.
The year was 2000 and the world did not come to a screeching halt with Y2K. The dot com bubble was still going full throttle (until March) and at the time that I accepted my position I really knew nothing about commercial real estate except that it was not a conventional job ? I could chase whatever business I desired and my income potential was unlimited.
Sounds great, right? There is just something sexy about real estate. Everyone wants to get into it and you do not hear about the people who get out of it (mostly because the people who get out do not shout it from the mountain tops).
But the truth is that real estate agents are like restaurants. 80% fail in the first 5 years.
Speaking of restaurants, I moonlighted as a pizza delivery guy on Sunday nights in my first year in the business.
I made about $100 cash and it was the only day of the week I did not spend working on my real estate career. Every Sunday night at 1am I would come home smelling like pepperoni and Italian sausage and 6 hours later I would be in my suit on the 30th floor of an A class building. I like to think that I have a white collar mind and blue collar attitude. I was willing to do whatever I needed to do to have some spending money and also make my career a success.
Monday mornings would look like this ? up at 5:00am to hit the gym, on the train and into work at 6:00am. On the train I would highlight companies that I photocopied the previous night from a business directory at the library. 7:00am ? 8:00am I would enter new leads into my $200 used computer I purchased on eBay (which blew my mind at the time).
Then from 8:00am until 6:00pm I would make call after call after call.
Should I mention who fun it is to cold call? I guess that?s a whole other post. I?m sure you can imagine.
I would record how many dials I made, number of meetings, my batting average, how large the prospects were and when their lease comes due. Time was money.
Although I enjoyed going to the meetings to meet with these prospective clients, the calling became an addiction. There was also a social reward attached to each meeting. Back then the company had one company laptop and we actually showed PowerPoint presentations to prospects on their desks. I guess since the technology was somewhat cutting edge back then (at least in the commercial real estate community) it was not as clumsy as it may sound. Or maybe it was. But the act of lining up a meeting and signing out the laptop in the kitchen was like a badge of honor and it was my goal to populate every time slot with my name.
Soon I stopped working out. I could get into the office one hour sooner by cutting out the workout. Then I stopped preparing meals. Why grocery shop and prepare meals when I could be researching more companies or reading more articles on my industry? I was a 24 year old who had not known real stress in my life. Life had always been easy. My family made good money and although I had a job since 14 years of age my schooling was covered by my folks.
Commercial real estate was meddling with my stress-free way of life.
After work one day I ran into an acquaintance from business school. Someone who I had probably had three conversations with in my life. Acquaintance may be an overstatement. The first thing he said when seeing me is ?You look tired. You have bags around your eyes.?
Well thanks for not saying the normal clich?s around people you hardly know like ?great to see you?! So it was the bags around my eyes that ended up opening my eyes.
I had to learn to take a step back. What am I in this for if at 24 years old an almost-stranger bluntly tells me that my face looks like a punching bag?
I decided to move to the city to be closer to work. My commute improved dramatically, I committed to eating better and to consistently work out and I joined a basketball league. I had more balance. I just do not have more in my bank account balance.
Year one in the business was now under my belt and I could then officially tell people I have been in the business for ?multiple? years, cash flow in commercial real estate is as fast as a turtle walking. Backwards.
I made the mistake of spending money before I had it. There was one deal in particular that I was fortunate enough to be included on in which I was to receive $80,000. It was a very special deal ? this does not happen every day, especially for someone in their second year in the business. At this point I began reading my own press. Going out every weekend with delivering pizzas being something very much in the rear view mirror.
The only problem was that I did not foresee that client taking over a year to actually sign their lease. It was a building to be built so there was plenty of time before the lease actually started and I learned my first lesson on how slow big companies moved. As the landlord did not have to pay commissions until the lease was signed they had an incentive to go slow as well. Sheesh.
Soon I was selling some of my possessions. I sold my CD player (Steve Jobs had not yet invented 1,000 songs in your pocket) and I found some buyers for some gift cards I had lying around at 50 cents on the dollar. I also had a hole in one of my dress shoes that I hoped clients did not notice. When I toured in the rain I had one wet foot and one dry one. At least my sneakers kept my feet dry when I delivered pizzas.
I wrote this post as you may be evaluating brokers to work with. There is a misconception that all people in real estate make good money, especially commercial real estate.
The truth is that brokers go through an absolute grind in their first couple of years (or more). Even if they are successful in attracting clients immediately, it is a very long lead-time sales cycle. Most brokers are in ?fake it till you make it? mode. Be on the lookout for the newbie brokers and evaluate if they will be in the business long enough to see your project through and if they will be around for the next deal so that you can develop a long-standing relationship.