One of the biggest reasons people pursue a commercial real estate career (CRE) is to earn a six-figure income. Does this sound like you? It's certainly possible to make good money and build wealth in this industry, but there’s no such thing as overnight success.
You have to be committed, strategic, and open to learning new things. In other words, you have to get ready to work. Your first three years as a commercial real estate broker are the most important in your career.
Be sure to use this time to build systems and connections that will form the basis for your success. But what exactly should you do during this period to put yourself well on your way to a six-figure income? Here are some tips:
Like anything in life, success in commercial real estate brokerage starts with having a clear goal.
Most people make the mistake of thinking that this step is easy, but it’s really not. Simply saying that you want to make $300,000 is not a goal—it’s just a wish.
A goal should be specific. Goal setting involves knowing exactly what you want to achieve, why you want it, and how you’re going to get it. It also involves making that goal statement public.
During your first year, you will be spending a lot of time on research. It’s important to take the time to do this correctly. It might seem like monotonous and mundane work, but do this meticulously, and you will set yourself up for success.
Do your research on the CRE type you want to target. What’s the existing inventory?
How many of these properties trade hands every year? Knowing this information will help you determine the velocity of deals in the niche you’re interested in.Once you have the numbers, do the math to get the average sale price.
Figure out how many closings you will need to hit each year in order to reach your income goal. Calculate the percentage of the market you need to get to achieve your objective, and then decide if the market area or CRE type supports your income target.
If it doesn’t, start over with another CRE type or geography. Keep doing this until you find a market that’s worth pursuing. After this, you can start building a database.
Create a catalog system—preferably a CRM instead of an excel spreadsheet—where you can organize a comprehensive and scalable list of properties in your market.
Be sure to indicate the owner of each commercial property as well as their contact information.
Check the comps you pulled during your initial research and indicate every seller, buyer, lender, appraiser, attorney, and other professionals involved in those commercial property transactions.
By the end of this process, you will have started a ready-to-grow database as you progress in your career. Now you are ready to develop a business plan.
It should clearly indicate (1) how many closings you have to hit in order to reach your goal and (2) how many meetings, listings, proposals, emails, phone calls, and other such activities you need to do to hit that many closings.
By the time you’ve done all this, you may need to revisit your goal and make it more concrete. You now have a much better idea of what work you need to do to reach your targets.
Finally, you should be ready to make your goal public at the end of your first year. That’s right—you have to announce it to others to make yourself accountable.
Going public also forces you to believe in your plan and make it work. If you find it too intimidating to put yourself out there, you might as well quit now because commercial real estate might not be the business for you.
Important note: It’s impossible to make six fingers right away in your first year. Anyone who says that they did this is probably lying or simply had a stroke of luck—and as you know, pure luck is unsustainable.
Think of your first year in this career as a learning and building stage. Your focus should be on building the foundation of a sustainable career, not one that is based on luck alone.
Some brokers make the mistake of executing their business plans in a linear fashion.
Don’t do this. It’s not wise to aim for just one closing and spend all of your time and resources working on that deal, only to fail in the end and have to start from nothing again. Your goal should be to create a pipeline.
While you’re preparing for that first listing, don’t stop prospecting for other business. Your second year in this career should be all about managing deal flow.
Consider onboarding an assistant if you can afford to do so by now. This will take some of the mundane work off your hands so you can focus on more profitable activities.Once you’ve built a healthy pipeline of escrows and listings, you will always have a deal that’s on its way to closing.
As a commercial real estate broker at this stage in your career, you’ve probably had enough successes and failures to draw lessons from—lessons that will allow you to improve your system.
Keep building your database, making sure to log every email or conversation with anyone you talked business with.
Analyze how many dials, conversations, listings, proposals, meetings, and closings you did in the last two years and determine your conversion ratios.
Did you waste time on certain things? In what areas did you fail and why? The key here is to be completely honest with yourself.
Look back at the numbers and determine what areas can be improved. Make changes to your business plan as necessary, incorporating the learnings of the past two years.
You should also focus on promoting and marketing your success during your third year. Don’t be shy to toot your own horn.
Send information to the media and to your clients about how many commercial property deals you closed, what records you’ve broken, or what makes you different from other brokers.
Are you not comfortable promoting yourself?
Don’t worry—you can always hire a publicist. It’s a good investment if you’re serious about building your brand.
Spend your first three years as a commercial property broker building a system, a pipeline, and a network. You’ll be well on your way to earning a six-figure income every year—and soon, a seven-figure paycheck annually.
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