How to Invest in Commercial Real Estate

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Episode #045- Learn How To SuperCharge Your Network To Find Your Next Commercial Real Estate Deal!

by Criterion, Braden Cheek, Brian Duck
January 17th 2022

"The richest people in the world look for and build networks, everyone else looks for work. Marinate on that for a minute." —Robert Kiyosaki

Today our hosts Brian Duck, Braden Cheek & Jo... More

I don't want to act like that. I am the best networker in the world. This is hard for me. Uh It's uncomfortable to try to pitch yourself or tell people how good you are that you're gonna make money. It's really difficult. And so what I am saying is the the the little amount of effort that I have put into this has paid off in a big way and I mean I'm encouraging you guys that this is this is something you can do. You're not once again it makes it easier. Most people are not going to say no, I'm not letting you add me to the list. I don't want to know anything. You know, I mean they get 100 email as they get there on so many email lists that they hate this at least is someone that they know or potentially no, I'm going to email you four times a year. Yeah, I mean it's four. Alright guys, welcome back to how to invest in commercial real estate. Today. We are going to talk about supercharging your networking and the reason we picked this topic is because all the value and the profit and commercial real estates made and finding and closing deals. And so today we're gonna talk about several ways you can use networking uh to really increase your deal flow.

How do you find those deals that you can buy? And and that's really how you how you make the money. Yeah. I mean at criteria we've had a lot of success with meeting with real life people and networking and finding great deals. You know, we talked about the kind of deals we like to by people who are in the business ask us what kind of deals were buying or what we're into. And we started explaining, yeah, we're in commercial real estate, we like to buy apartments would like to buy shopping centers. So what kind of shopping centers, what kind of apartments? So it starts this conversation and then pretty soon we have this little army of people literally looking for our deals for us and bring them to us and then we just get to sift through those Alright, let's break it down and then form what's kind of like a first bullet point that they can, they can take where they're sitting around saying, okay, what's my first step in getting deal flow? You gotta be in the right room. Yeah. Yeah, that's what, that's how you call it is, you've got to be in the right room. I've heard you say that before. And so that's what conferences, uh, local um organizations. Yeah, I mean there's there's probably a knee op organization, uh, National Association of Industrial and Office Properties.

Okay, so there's, there's nap nationally, there's boma I mean there's all sorts of local, but the gap is it's not just industrial and office properties. It really is commercial real estate in general. That's what the organization has become organization wide, you're gonna have a local chapter if your city has more than, you know, a few 100,000 people in it maybe, but that's a good place to start because there's going to be networking events where you can meet other local professionals that are in your industry. It will include brokers, it'll include investors. It'll include owners. Uh, so that, you know, being in the right room is, is being at those events, you know, networking at, at golf tournaments and you know, christmas Gallas and, and things where people are getting together and they're just talking about their profession and they need to hear your story and they need to hear what you're looking for. And you just put them on notice that you're looking for commercial real estate. You want to buy this type of commercial real estate, you're funded, you know, that kind of stuff. And so that way they, when they have a deal pop up there thinking, okay, precision equity criterion or whatever the company is.

Yeah. It's like, it's like when you go buy a new car, right? Like you, you go identify, oh man, that new ford Explorer looks exactly like a range rover. It's not the price of a range rover. And then you see that Explorer, like 50 times in the highway. It's the same thing. You got to project it out. You gotta let people know, Hey, I'm looking for shopping centers, I'm looking for multi family because somebody's looking to sell multi family and somebody's looking to sell those shopping centers, they just haven't identified us as a buyer yet. So, okay, so a lot of that's gonna get you, uh, some local exposure. What if you want more national exposure, what can you do? Yeah, I mean, you gotta, you gotta go in those areas or we'll go to the right conferences, go into the right conference. Yeah, you know, so yeah, for us, uh, we've had some success and, and looking up conferences, uh, there's a conference out there for whatever area of commercial real estate you want to be involved in and, and there's ones for big institutional investors and owners, and then there's some for middle market and there's small market wherever you fit in the equation. Uh, there's a conference out there for you. We've been to the mid mid market apartment multi family conference where we're meeting owners kind of just like us.

But at that conference there'll be lenders that went alone on mid market apartments. Mid market, multi family, there will be uh, family offices and private equity that are specifically looking to invest money, not in huge class, a institutional type deals, but in in middle market apartments. So you get to meet a wide range of people that are going to fit what you want to do, aren't there? Even companies out there and that's sort of how they make a living is by putting conferences on commercial real estate conferences, right? Yeah. Oh yeah, I think uh, like biz biz now is literally just throwing conferences right now, it's the whole business model. Yeah there's there's a lot of value to be set at conferences. ICSC International Council of shopping centers. It's a massive conference. So many new development deals on the retail front get made at ICSC at least the relationship, I mean you're getting 5 10, 15 minutes at a booth, but you're making a relationship to where you may get your email answered when you get back home. That guy knows you, he shook your hand, he he knows about your project. It seems interesting.

He got the 32nd elevator pitch and it worked, you know, deals deals are done in a room and in person. The big one, the big C. C. I. M. Is in las Vegas, but I think there's one in like Dallas new york new york. Uh and so there'll be one closer to you and it'll be more of a centralized focus on that area of the of the country. So what other is there any other conferences that we want to mention? I mean they're literally is there's debt conferences, there's if you're into hotels, there's a whole conference on buying hotels or that industry, there's conferences on on family offices of of just rich families that need to invest money in commercial real estate. So they'll throw a conference to hopefully go invest some of their money to sponsor that they can get their investments. So just we got I mean that's that's mind blowing right there. So like there's literally people who have no idea what to do. They can't find the money to go buy their deal. They can't find the deal. And it's just here, here's how you find the deal. Here's how you find the money, you google, you know, family office conference.

There's one in three months close by. I guarantee it. You know what I mean? A lot of them, there's a lot of them. And then you just go and do it and you introduce yourself to people. Hey, we're buying these types of deals. Are you interested? And they're gonna say, yeah, that's why they're there. And then you take it from there. All right. What's next? Um, so yeah, being on the right list, that's that's huge because you're not always going to know the guy face to face. He's not always going to be a member of your, your lunch and your, your breakfast group, your nap organization. You know, we've got deals in in Vegas and in Arkansas and then texas, you've got Cincinnati, we've had north Carolina Indianapolis Oklahoma city. Yeah. So you may ask. Well, Joel, how did, how did you find or you guys to you guys are out of state, How did you find these deals in Indianapolis or in north Carolina. Well, we got on the right list and we have, you have to get yourself on brokers list. You know, the brokers are busy and they have, they have hundreds, if not thousands of clients that they're sending deals too. So they're just not gonna send each deal individually to each one of those people.

They're gonna blast it on a list and then they're gonna expect you to see that and then call them up to ask questions. So you've got to get on both, both locally and nationally. You've got to get on brokers list where they, you're seeing the deal flow. Like we've talked about, you know, you've got to be seeing a bunch of deals. Uh, so that's one way that you can increase your networking is you get on all these lists and you can have hit him up about a listing. They had sent him an email back, then you, every time you email them, your name, your name, your name is coming up. And so they're gonna think criterion, criterion criterion and then they'll think, okay, these guys are players, they're interested and so you, you may get a call from them. So I think it's important. The best brokers, in my opinion, our broker cold calls. I love it when a broker cold calls me and says, Hey, I saw you bought that. I've got five of the deals that looked just like it. Are you a buyer like that guy has done his homework, he knows what I want, he knows what I bought, he knows my name. He went to my website, he's familiar with our processes and he went to find identical properties that would most likely work for me and said, Hey dude, I got a, I got a story about that.

So maybe this might bore people. But Back, we were just multi family guys and we had sold a big multi family portfolio and we got ourselves in a 1031 trade and identified a few deals and they all fell through except for this retail deal. And we never purchased retail before. So we purchased retail. It's going pretty well, you know, we didn't really know what we're doing. I never thought I'd buy another retail dude. I'm kind of looking for more multi family. And this broker cold calls me and says, Hey, I saw you bought this deal in Tulsa. I've got a deal in Little Rock and I took the call, I listened to him. You know, I'm always open minded. You know, I'm never just like, I don't know this guy, I'm hanging up on him. So I ended up driving to Little Rock, you know, doing the due diligence and this thing fleshed out and we purchased it and still own it and it's done really well. And it didn't stop there a year later or two years later. He calls me up again and says, because I performed on the first one. He says, hey, I got another deal for you. It happens to be just outside of Cincinnati influence. And so I was like, okay, so we go to Kentucky, we look at the deal and we purchased that.

We've owned that for almost four years. Okay. I know this guy, but the names drawn me a blank. Yeah, I can't remember the name now. I'll think of it here. Jason is the first name. But anyway, if your broker take notes, okay, take notes. Because I mean, how, how easy is that? The broker's job is to sell the property for as much money and as fast as possible for the seller. So, I mean he's going to people who he thinks are actually going to perform and close the deal. Yeah, we're bidding on deals. They're, they're wanting, you know, proof of proof of liquidity, proof of money. They want maybe a recommendation. They want to know. Okay, who are you? Do you have a website? Have you ever bought anything? Because if you lock it up, you get them pregnant, You know, in contract, they're going to kill 45 days and and maybe lose out on another buyer. Well, so one more example on the get on the right list is so I'm on crack C which is, you know, all of these, the commercial real estates of massive site. And I just, I drum through hundreds of listings and then I'll download some. Om and I'll contract some brokers. Well, this one listing I liked and so I ended up getting on this guy's list and he's out of Memphis.

And then later down the line. He I he emails me and says, hey I got this deal in Memphis. I think you guys will like we ended up bidding on it, we ended up buying it and and then uh six months later he calls me again, hey jule I've got another listing for you. It's right next door to the other one you bought and we end up buying that one and that's how I got in Memphis. I didn't know anybody in Memphis. I hadn't really been to Memphis and now we have 22 successful deals in Memphis just because I got on the right list. So anyway, I think that's a big one. What's next? Good. If you're a broker, go to both of our websites right now look at everything we have and if you have something similar call us because we will buy that shit. Next all right next to the majority of the capital stack from the deal you just found from the list or being in the right room or go into the right conference. You found the deal and the majority of the money is going to come from some sort of lending instruments. Some sort of bank probably. So you should, you should get to know some banks, get to know your lenders. I mean It's a Big one. So I there's several reasons why I think this is important. Number one you want to know what the market's doing in the mortgage market is doing, that's how you evaluate your deals.

But it's way more important than that because local bankers, local commercial lenders, they know who's, who in commercial real estate, they're the ones lending the money. They know what deals are happening, they know who has money, they know who's, you know, has potentially money to invest. Uh, and so it's so important to get to know these guys. And the great thing about your local lenders is they'll buy you lunch whenever you want them to write. They have, they have the marketing budget, they want to lend you money and so have them take you to lunch for free and pick their brain on what they're seeing in the market whose doing new projects, you know, and you'll learn so much from them, but they'll also connect you to other commercial real estate professionals in your area. And so that's a really massive win for you. If you can get to know those guys and get a bunch of free lunches. Yeah. And, and most loan officers are, are, you know, salary, salary plus commission normally, you know, so they're, they're incentivized heavily to get these deals done. So just like a broker or an owner, you know, they're, they're heavily incentivized to get these deals done. So like I said, if they're holding a note on a property that they've held for a really long time. Hey, this might be ripe for a trade.

Hey, we've got this client, I can't tell you how many times calendar said this. Hey, we've got this client who's asking about commercial real estate investing. Can I kick him your way? Every time? Every single time that, that's got to be a stop for, for people that want to get in this business is networking with your local lenders. Yeah. Because when you bank somewhere, a lot of people, a lot, especially a lot in the older generations, they're going to the local banker for a notary, let alone investment advice, a mortgage car loan. They're literally going to their local bank for everything. So they're, they're asking questions there knowing the local lender could get you some cash, a lot of cash. All right. Next. Uh, yeah, The next and most important one is, you know, fund funding your deals. You know, you're, you're going to invest in this deal, but you're most likely going to, uh, let other people know about it. Other people will most likely want the opportunity to invest in that amazing commercial real estate deal. So the first several are really networking to find deals. This last point is networking to fund your deals. Exactly. And you don't want to wait until you have a deal to set to network for your investors because it's hard enough to get people to give you money in commercial real estate.

But when you go to people and you try to get it quick, Hey, I need this. You seem desperate. I got to close this deal. Come on, help me out. And they don't understand that. That's not going to be the best way to get this thing done. So what you wanna do is every professional that you think has some investable cash that's in your circle. You need to be, hey, I'd like to have 10, 15 minutes of your time. I want you to, I just want to tell you about what I do and just see if commercial real estates that fit for you or someone that, you know, and here's the pitch. You're not going to ask them for money. You're just going to ask them, Hey, would you mind that? I add you to our investor list or a distribution list. That way. They get the quarterly updates of what you're doing. You're gonna be excited about the profits you made your other investors. They're just gonna see that and they're gonna sit on that list and they're gonna get those emails and pretty soon one day they're gonna have fomo, they're gonna say, I don't want to miss out on this and they're gonna jump in the deal. I've had people that have been on my investor list for five years, six years. Never did a deal.

And they finally come around to say, you know what I've seen? I've seen Joel and action now for the last several years, I've seen how many deals they've done and I now I have confidence. So I never even had to ask them for the money. Right. They just decided when it was right for them. But that all starts from having conversations and getting people on your, your list. So you want to be on the right list, but you also want to get people on your list. I can't tell you how many coffees and lunches and phone calls and emails we've written to to investors. And the other thing about investors, networking with investors is I'm amazed at how many investors come to me and say, hey, I know a guy who's, um, or a girl whose owner of a bank or president of a bank. Why don't you talk to them about lending? And I've got other investors. I've got friends that want to invest. And I know this developer, he's wanting to do something over here. So it's not just getting them to recommend you to other investors. They, you know, they have contacts that they have contacts that can help you too. I'd like to say I, this is not a strong suit for me. I don't want to act like that. I am the best networker in the world. This is hard for me.

Uh, it's uncomfortable to try to pitch yourself or tell people how good you are that you're gonna make money. It's really difficult. And so what, what I am saying is the the the little amount of effort that I have put into this has paid off in a big way and I mean, I'm encouraging you guys that this is this is something you can do your not once again it makes it easier. Most people are not going to say no, I'm not letting you add me to the list. I don't want to know anything, you know, I mean they get 100 emails, don't put me on your list. They get there on so many email lists that they hate this at least. Is someone that they know or potentially no, I'm gonna email you four times a year. Yeah, I mean it's four uh so that you should be able to get a yes, if you have any salesmanship ability at all. If you don't just quit, if you can't get people on your list, you know, for four emails a year. Uh But anyway, I think it's really important to network and get people on your list. And and as that list builds, they'll recommend other people. Uh and it will grow. And and we're just now seeing our list grow to the point where, you know, raising capital is is getting easier and easier before I had to make a lot of calls.

Now, I just set it up, we submit it, we put push a button and and we get commitments and that's how you want. It sounds like it's time to go after some bigger deals. Yeah, it might be alrighty guys be in the Right room network, meet with real people, go to the right conferences, get to know your lenders and get people on your list. Boom. That's it. All right. We'll see you next time on how to invest in commercial real estate.

Episode #045- Learn How To SuperCharge Your Network To Find Your Next Commercial Real Estate Deal!
Episode #045- Learn How To SuperCharge Your Network To Find Your Next Commercial Real Estate Deal!
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