In a booming market, we see big numbers more frequently, but there’s a difference between big numbers and truly jaw-dropping numbers. Two Keller Williams Commercial agents recently had a brush with some massive numbers when they closed on a $50-million transaction. Louis Erice and Fred Afif, who work in the South Florida region, represented the buyer in the deal, which was for two mobile home parks in Miami.
Because the overall pool of commercial buyers is much smaller than the residential side, much of the work on each transaction involves long-term nurturing of relationships. For this deal, Afif and Erice first showed the buyer properties in Miami last spring when he expressed interest in obtaining a trophy property – an exceptionally rare find – in the area. After one property in the original three-property portfolio went under contract, the duo had to urge the buyer to come in with an aggressive offer to nab the remaining two.
“We told him the only way you’re going to get this property is if you come in hard with a nonrefundable deposit on day one,” Afif recalls. “That was in September, and we closed in November.”
For the $50-million deal, Erice and Afif earned $1 million in GCI.
“We’re so blessed to have a year like this,” Erice said. “It’s exciting to make a million dollars in compensation on only one transaction. We don’t do that every year. Next year, we will be working hard, and, with what we have in the pipeline, we expect to have another stellar year.”
Explore the Opportunities in Commercial Real EstateTwo Tips for Success in Commercial Real Estate
Erice and Afif are eager for agents to understand that this major transaction was a work in progress for years, not just something that popped up in the past couple months. To keep their commercial business on track for both long-term growth and successes like this recent deal, they rely on a two-pronged strategy.
First, build and nurture your relationships – both with clients and with fellow agents. When it comes to clients, the two work to stay top of mind with their database of 50,000 potential and past clients through a monthly newsletter.
“In commercial real estate, we work with more off-market properties than listed ones, so it is imperative to build relationships with commercial brokers within KW and other commercial agents from other companies,” Erice says. “Fred and I have a network of agents that we truly trust when working with off-market properties.”
Second, know the market and the jargon. The commercial side of real estate comes with its own language that differs dramatically from the residential side.
Picking up that vocabulary is important when it comes to speaking with co-brokers, developers, and other commercial clients.
“We analyze and look at all these different neighborhoods so that when we’re talking to a client we not only sound like we know what we’re talking about, but we actually do know what we’re talking about,” Erice says.
The Opportunity Available in Commercial Real Estate
The potential of landing $1 million in GCI in a single transaction is doubtlessly appealing to any agent, whether they’re in residential or commercial real estate. For any agents looking to make the jump from residential to commercial, Erice recommends teaming up with an experienced commercial agent to get the ball rolling.
“We are always promoting to residential agents wanting to get into commercial to work the first few deals with an experienced commercial agent. It’s better to split commissions than make zero, and that’s likely to happen if you don’t know what you’re talking about.”
Afif learned that lesson the hard way after transitioning to the commercial side after seven years in residential real estate.
“I wish I had done what Louis said and just teamed up with somebody that really knew commercial and worked a deal with them and followed along,” he says.
For Afif, patience is another hallmark of commercial real estate and a skill that must be honed to succeed in the market.
“It’s not like residential where deals are quick,” he says. “We started working on this deal three years ago. It’s not like it just happened in two months. It’s a product of three or four years of work and being very patient.”