How can you transition from residential to commercial real estate?

The complexity of CRE transactions demands a deep understanding of financial modeling. This includes being proficient in forecasting cash flows, calculating net operating income (NOI), understanding capitalization rates (cap rates), and analyzing internal rates of return (IRR). These metrics are crucial for evaluating the profitability and viability of commercial real estate investments. To enhance your skills in this area, you can enroll in specialized real estate financial modeling courses. These courses provided you with the knowledge to create sophisticated models for various types of commercial properties. Some courses are A.CRE, Break into CRE, and Wall Street Prep.

CRE is a totally different ballgame than residential. There is a whole new language you will have to learn. To gain a solid understanding of commercial real estate, it's essential to delve into the foundational aspects of CRE, including market analysis, valuation, financing, leasing, contracts, and legal considerations. Additionally, it's crucial to acquaint yourself with the terminology, metrics, and tools commonly employed in the commercial real estate field. We created a company to help active investors learn about CRE and multifamily analysis. Check out Next Level Financial Modeling for a free 5-day Multifamily Crash Course.

Try to refer and supervise the process for your client. Real world experience with a known expert will add to your skill set.

Start small. Learn the contracts, the terminology, the "language", the numbers, BEFORE you start working with clients. Learn from a CRE pro. I'm not a huge fan of taking them to lunch and asking a ton of questions. Ask them if you can support them (for FREE) on future transactions and after visits or conversations or proposals, ask them why they did it that way, why they thought about it that way, why they chose to do what they did. Pros would rather teach as they go along, especially when in the middle of a deal or in the hunt. It's more applicable and more legitimate...and more fun to explain a concept when working in the middle of the concept.

Be prepared to learn an entirely new business. The similarities between residential and commercial real estate are just about non-existent. You will need to educate yourself on all, if not more, of the topics listed within this step #2. Additionally, in residential RE, too many agents attempted to be all things to all potential users. In commercial, you will have to select a particular sub-set such as 1) Leasing - Agency or Brokerage; 2) Investment sales; 3) Multi-family and hospitality sales; 4) Land; 5) financing; plus more. Commercial has a long lead time from initiating a transaction to finalizing and receiving a fee. It is not an "overnight business".

Before one make a decision to venture into any business You have to learn under someone and have as many mentors as possible. More of the media ones who you can follow there steps and guidance and with time you also get to meet them in person. When it comes to CRE you can start from anywhere so far you have mentors to guide you along the part.

Aim to find a top producing commercial agent and see if they are willing to split deals with you if you bring them some contacts and learn from the best!!

I've been involved with all types of rental properties and they are all basically alike. You find a tenant and provide a lease. The thing I like most is that my commercial and my industrial properties all contain NNN leases. Triple net for those not involved with these type properties. Small income units can't bear the cost of a NNN lease typically.

Even if networking isn’t your scene, make time to attend events that pique your interest. Find a local chapter of a group like NAIOP to join. This will provide you with a diverse set of CRE backgrounds to connect with and lean on as you grow your career.

A proverb I follow is "When you light a lamp for someone you also light your own path. I believe this and believe in mentorship." Mentorship goes both ways - you learn from both being a mentor and mentee. In fact you can do both at the same time, share your knowledge with a mentee and have a mentor of your own so you are always growing and learning.

To thrive in commercial real estate (CRE), robust networking is essential. It opens doors to referrals, leads, and boundless opportunities. Active involvement in industry events, associations, and online CRE forums is paramount to strengthening connections. Leverage your existing residential network—past clients, colleagues, friends, and family—to share your exciting expansion into CRE. Update your marketing materials and online presence to reflect your CRE focus seamlessly. At CloudGenuity, we boast large corporate buyers actively seeking properties. We offer marketing prowess to attract CRE opportunities and ensure your triumph. Best Regards, Valarie Schwab DRE #01470302 Digital Marketer, REALTOR®, CPRES and CRE Investor CloudGenuity

See if your local association has a commercial board. Look into CCIM, which offers classes to everyone, IREM, BOMA, CREW Network, an other CRE industry organizations.

In my experience, involvement in local and national trade associations is key to developing skills and building networks. Depending on property type, commercial organizations worth joining include BOMA, NAIOP, and ICSC. IREM has a commercial designation, ACoM, and is the accreditation gold standard. Join and get involved.

Joining a high performing commercial real estate team is a great way to accelerate transaction experience. Reps are key. Building a resume of transactions is a critical component of success in CRE, and if you can add value to an established team it is a win-win.

Starting to build your portfolio is the next step. You will need to determine your goals and the type of property you are looking to acquire. You do not have to start small. If you have done your research, have a great team, and have mentors - you can definitely start with larger properties.

Starting small in commercial real estate is a prudent approach. Initiating your journey by assisting investors in finding single-family homes, duplexes, triplexes, and fourplex units provides invaluable experience. Handling queries from investors sharpens your skill set and builds a foundation for understanding their needs. Moreover, engaging in these smaller deals serves as a stepping stone to establish connections with larger investors in the commercial realm. It's a gradual progression that not only hones your expertise but also opens doors to broader opportunities in the dynamic landscape of commercial real estate.

You will learn 50% of how to do a CRE deal on your first deal, and 1% more for every deal thereafter. Take it slow because the deals that you cut your teeth on will form your reputation in the industry. Learn, ask questions, and play the long game. The big deals will follow.

40 plus years and I still learn one new thing and often more on every deal. How does the math add up on that? Bottom line you had better keep learning because this industry is evolving and will continue to do so. If you don’t you will become a part of history in short order

In the dynamic world of commercial real estate (CRE), success hinges on perpetual evolution. Adaptation is your superpower, and learning is the catalyst. Stay at the forefront with real-time CRE news, data, and insights. Keep a vigilant eye on sector performance, both locally and internationally. Seek wisdom from clients, mentors, and partners to fine-tune your strengths. Flexibility is your secret weapon. Tailor strategies to the ever-shifting market, and pivot as client needs evolve. Let's embark on this CRE journey together. We offer swift transactions and a lucrative edge with cash buyers spanning the US and 23 international countries. Valarie Schwab DRE #01470302 Digital Marketer, REALTOR®, CPRES and CRE Investor CloudGenuity

Educate yourself on a couple of niche markets and develop your skills. You will do better if you focus on a few areas of expertise, rather than trying to know it all in commercials.

Ultimately, you need to understand why you want to transition into commercial. I coach agents who say things about getting the big commission checks, wanting to graduate into commercial or who want to do deals they see in the news. Those are all terrible answers, most commercial deals do not pay any more than the residential deals you are currently doing, and they take longer to do them. Commercial is a different beast from residential and takes different skills, don't downplay the skills needed in residential. Looking for fame in your deals will be a feeding chase. I have had several deals in the local business journals, & it is cool for a day, the other 99% of deals are the ones that are the ones that pay the bills.

The best advice I could ever give someone around this, would be to join a commercial real estate brokerage firm where you'll be surrounded by veteran, successful commercial agents. Do not try to transition into doing commercial transactions while working for a residential brokerage firm, being surrounded by agents who are only selling homes, and working under a manager who is not a commercial real estate expert. This can be a recipe for disaster, as there are so many ways that an agent can get sued for a transaction, that don't apply when selling homes. In addition, look to an organization like CCIM to get good training and knowledge in commercial real estate, and consider hiring a good commercial real estate coach.

Agree get a great mentor that’s in the niche that you wanna become an expert and I did a YouTube on this” if you try to earn before you learn you get burned “! I also teach a course called residential two commercial.

Entering real estate brokerage, is the equivalent of starting a business. It is important to ask am cut out for the task. You will work incredibly hard for long hours, a for long time often with no immediate results. Is that you? Can you pay your bills and all those who support you charging for services, tools, and wages often before you pay yourself? Do you love meeting people, opening a conversation with a stranger, prospecting, and networking networking for business? Have you succeeded in another occupation where success is above the 80th percentile? Commercial real estate is harder than most occupations, and if you are not a top performer at something else, your chance of doing average or better as a commercial broker is low.

While the core principles remain similar, the fundamental mindset and approach to deals differ significantly. Residential agents, like nurturing guides, excel at building emotional connections and navigating the highs and lows of buying or selling a home. They prioritize understanding their clients' needs and providing patient support throughout the process. Commercial agents, on the other hand, operate more like strategic negotiators. They focus on the bigger picture, analyzing market trends, meticulously structuring deals, and securing the best possible outcomes for their clients. They thrive in a fast-paced, analytical environment where every decision has a significant financial impact.