Question from a residential listing agent
As a residential listing agent, I list 4-5 houses a month and carry an inventory of 20 houses or so. Usually have 3-4 closings a month with that level of inventory. It's a simple plan, cold call or pay someone to cold call for 3 hours a day, go on 10 listing appointments, list 6 properties, sell 4 of them. Repetitious boredom that earns me six figures and provides a repeatable business.


I'm very interested in CRE. I'm a Keller Williams agent and we just started a commercial division. Our local office branded one its agents as the 'commercial director' and she partnered with me cause I was the leading listing agent in that office.


I started to incorporate commercial cold calls into my routine and started listing CRE in a week or two. I listing 6 CRE properties in 4 months with a volume of $7mm total. the 'commercial director' put them on loopnet and costar. We had a 70/30 (Me keeping 70%) split on these CRE properties if they sold and she would handle everything after I listed them. Marketing, other brokers, buyers...


I knew that CRE was slow turnover so I stopped listing CRE and focused on residential to keep my real estate inventory moving. Sure enough, nothing happened with these 6 properties and they expired. I think she had 5-6 call about them. I stopped listing CRE and the commercial listings in the office went down to zero because I was the only one listing them. the 'commercial director' started selling some MLM scam and vanished from real estate soon after.


I know that some CRE brokers in my city make $1mm per year. I've only been at this for 3 years and I know my potential is quite high. If they are doing it, I sure as shit can too. I was matching the top 5% residential teams in the office as a single agent within 12 months.


This whole ordeal really shook me and made me wonder how in the world CRE agents make any money?!


Does CRE have a place for a residential listing guy like me? I like to prospect for listing appointments and win listing. I do not like dealing with buyers as they require a lot of hand holding and coddling. I like to burn through appointments and list. I like analyzing multifamily deals and own two duplex that I've purchsed in the past 7 months. Any hope for me in CRE, just listing properties and minding my business?


No degree, 10 years recruiting for the military. 3 years residential agent, 2 classes left till brokers license.
[{"id": "dre2e6o", "text": "Not sure how valuable this is as I am currently not practicing CRE, but I am someone in your situation that is looking to transition in the next year and have been researching and positioning myself for this transition for two years now.  I figured I would share my perspective of what I have learned in researching this path and picking a lot of successful CRE Brokers brains.\n\nAll the things you had mentioned about the CRE challenges are very real.  Slow startup, long DD, slow to close.  But what I have found in my research is if you are a dedicated CRE broker have a healthy supply of listings eventually and are willing to work with a variety of buyers as well the money tends to blow residential out of the water.  I work for the leading regional RE company in both residential and CRE.  Our average residential broker take home is probably right around 90k a year, average commercial is more like 200k.  Top residential brokers are doing 500-900k in our market, commercial over a million.  All in a small city with a much more active residential market than commercial.  Difference I have have seen is most of the CRE guys after a few years carry a pretty healthy set of listings and most will eventually close with them.  Patience is key and dedication to the commercial market, not dabbling in it or going 50/50 with residential at the same time.  All of the successful CRE brokers I know are full time and positioning themselves to have a notable presence in the market.  That wont happen if you are splitting your time with residential.\n\nI am making six figures in residential right now and have dedicated myself to putting back as much as I can to make a transition to commercial in one year from now.  I am fully expecting the likelihood that I may not make a dime for 2 years when I switch, but with the goal of doubling my current income within the next 5 years.  My suggestion is to look long and hard at why you are in real estate in the first place.  Do you love working with people and being a part of their personal life milestones, or are you a businessman enjoying the deal side of it.  I recognized I was excited about the big picture of my business and the marketing and solution finding more so than getting involved with my clients personal journey.  I find the slow to mature deals in CRE less stressful than the emotional randomness of residential decisions.  \n\nA young guy, early thirties, just made the transition I plan to do about 2 years ago.  Hes had the obvious slow start up but just after his two year anniversary had about 8 million in closings in two months and then a month later closed a 7.5m deal so once the business is established I think you can catch up quick in the CRE world.  I hope my perspective from considering this same route helps.  Biggest thing is I just have yet to see any truly successful CRE brokers that were splitting their time with residential, I think you need to be dedicated to one or the other to be really valuable to clients.  Keep me updated!", "replies": [], "depth": 1}, {"id": "dre303a", "text": "How much do you know about commercial real estate finance? It's more of a numbers game than a sales game. ", "replies": [{"id": "dre51o6", "text": "nothing really. The basics at best, what a good price is per SQFT in my city for an office. What a good cap rate is, how to calculate it, what IRR means and a rudimentary idea of why it's important to investors... I analyze apartment building to buy on my own, but I have only just started the learning process in that field in order to put together a syndicated deal some day soon.\n\nWhere is the best source to learn about CRE finance for free?", "replies": [{"id": "drm58gy", "text": "&gt; Where is the best source to learn about CRE finance for free?\n\nSorry for the delay. There might be some resources at your local library. Here are [some books from the ULI](https://uli.bookstore.ipgbook.com/) that you might be able to find. I got rid of my old text books because i don't reference them ever. \n", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dree9v1", "text": "You are asking the right questions - so that's a good start.\n\nYou and other posters here are dead on about the lead time. Deals can take 2 years to close even if you are busting ass every day. With a pure commission gig, many people can't make it through until the income stabilizes.\n\nOverall the mechanics are the same, calling, meeting, listing, closing, but the deals are generally more complex and the sellers often have higher expectations for the expertise their broker is bringing to the table.\n\nAreas to consider are zoning/land use, construction/development, legal (the contracts are custom and often heavily negotiated), leasing, financial underwriting, lending, leasing rates and trends, upcoming market changes, etc.\n\nThere are also many areas that fall under the CRE heading. Do you want to lease industrial warehouses? Or sell lend for development? May sell value-add retail locations? There is a lot to know, so many successful brokers will specialize on a couple specialties and become an expert in the market for those things. This will vary on your market size and type.\n\nYou really can't dabble at it, that's for sure. Also, I have no idea how it would work to just \"hand off\" your listings to be serviced by other brokers after you bring them in the door, and that's probably why they didn't close. Especially if you are new, you really need that deal experience, grinding through the problems so you can better advise your clients and be more informed in a pitch meeting.\n\nI'd talk to a couple successful CRE brokers in your market that you can get advice from - you will inevitably encounter issues you've never come across before and it will be tough to overcome them on your own without more experience.\n\nGood luck in your new venture!", "replies": [{"id": "drehgd8", "text": "Thanks. What is the best source of free information on being a CRE broker? For example, Gary Keller wrote the book on being a residential listing agent, it's caller The Millionare Real Estate Agent. Is there a comprehensive CRE book or a website that explains it all well?", "replies": [{"id": "drehtel", "text": "The process isn't really rocket science, so I don't know if reading a book about the commercial real estate principals will be particularly helpful.\n\nYou're going to learn a hell of a lot more absorbing it by doing it every day or spending time with those who do. Also you'll catch the nuances and start to learn what's important in your local market, who the major brokers, developers and owners are.\n\nYou may want to consider partnering with a commercial broker who already has many years of experience. They can bring you in on relationships and deals they've already developed. You aren't going to get a huge cut of those deals right away, but the deal experience, mentoring, and introduction to the major players in your market is invaluable. Is it possible to just start from scratch on your own? Sure, but its a much more challenging path.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]