Starting a Commercial Real Estate Business: The StartUp Experience (02:47)
Dr. Tom Duening introduces commercial Realtor, Dale Stamp. Dale was a tennis pro before he started in real estate. He talks about the importance of good mentors in one's life.
Making the Switch (01:58)
Dale did both jobs initially. Eventually he gravitated towards the commercial side of the business. He found that women were more equipped to deal with the emotional side of residential sales.
No Sales Experience (02:01)
Commercial brokers refused to hire Dale as he had no sales experience. Being an athlete, Dale felt he had plenty of sales experience, selling himself. He was also well versed in rejection, a necessary tool for the competitive world of commercial sales.
Quantum Commercial Group (02:46)
Dale recommends a good education and successful mentors. A year and a half into his first job, Dale started his own company. This provided him the opportunity to progress and expand. He and his mentor went in as partners.
Time Wasters (02:50)
In starting a business, you learn what works and what does not. Spend your time working on deals you can successfully complete. Dale partnered with commercial group, Grubb and Ellis, in order to enhance national opportunities.
Down Economy (01:41)
Dale had twenty good years from 1987 until 2007, when the market fell. Sales were down because the banks wouldn't give loans as readily. It is critical to set aside money for tough times.
Personality Traits (03:20)
It is important to be punctual to appointments and to return calls promptly. If you put in long hard hours in the beginning, it will pay huge dividends later. To be in commercial real estate, you should be comfortable with mathematics.
Listen to Tom Duening as he summarizes important tips such as: returning calls promptly, being on time, gaining experience through a mentor and saving for tough times.
Segment 2-Set up (03:31)
Dale recommends starting out working at a good company for 3 to 5 years. Get a good solid foundation learning the business at the cost of someone else.
Cash Reserves (03:05)
Dale started small with a two person business. A new broker should have 2 1/2 years of living expenses set a side. Some large deals can take 6 months to a year to close. There is less competition in commercial real estate, compared to residential.
Finding Clients (02:36)
Cold calling or knocking on doors and offering your services is a good way to get started. Dale found that joining clubs and getting around business people is a great way to find clients. Always have a business card available to give out.
There are many categories within commercial real estate: purchasing, leasing, selling, industrial, office space, apartments, vacant land as well as retail. A written monthly report, will keep your client informed and give you credibility.
Location Location Location (02:52)
Some clients were more comfortable if Dale invested with them. In the beginning of his career he substituted his commission for part ownership. In a bad economy, a property in a good location can usually survive.
Understanding What to Look For (03:01)
The things to look for when considering a purchase are: construction, deferred maintenance, schools, neighborhoods and a low crime rate. Purchase in a stable area that is expected to grow. Being an owner helps Dale better understand client's needs.
Property Management (02:00)
Property managers apply a different skill set than brokers. They deal with tenants, landlords and repairs. People that fit the mold are detailed and patient.
Getting Paid (04:17)
Typically a broker of a lease, makes from 3.5 to 7% on the value of lease. Commission on a sale gets smaller as the deal gets larger. As an investor, money is made on the rent roll or when you sell. Property managers get a flat fee or percentage.
A bank would hire Quantum to give an opinion of value. Quantum charges and hourly fee or exchanges the fee for getting the listing.
Deal Making (02:13)
Dale discusses how Donald Trump buys run down, low vacancy properties and turns them into profitable going businesses.
Market Time (02:09)
A commercial deal can take 6 months to a year to close, depending on the market and motivation of the seller. Dale closed a large deal in 90 days. Colorado Springs is a good market that attracts investors from all over the nation.
Cost of Doing Business (02:20)
The cost is relatively small. On a large deal, be prepared to show the seller you have the ability to handle the business. New brokers will most likely be doing smaller, less attractive deals.
Good Money and Flexibility (02:26)
Dale considered three careers before choosing real estate. He liked the fact that if he worked hard, he could make good money and still have a flexible enough schedule to be with his family.
Clients are not always loyal. Competition is tough, as the business is very lucrative. Economic conditions have an effect on the business. Dale's father advised him to work for himself, if he wanted to control his own destiny.
Dr. Tom Duening-Summary (06:54)
Dr. Duening summarizes, in detail, all the points and advice given by Dale Stamp.
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