The Relationship Factor: How Building Trust with Sellers Leads to Better Commercial Real Estate Deals
08/21/24 • 60 min
Darren Smith, an owner-operator of industrial properties, shares his journey in commercial real estate. He started in residential real estate, but after meeting commercial investors and seeing the potential, he made the switch. Darren emphasizes the importance of building relationships with property owners and being a consultant for them throughout the process. He also discusses the benefits of seller financing and the need for trust and rapport in those deals. Darren advises being strategic with capital placement and considering the long-term cash flow implications. He shares insights on portfolio management and the importance of scalability. In this conversation, Darren Smith shares insights and advice on transitioning from residential to commercial real estate. He emphasizes the importance of overcoming the fear of raising capital and provides tips on structuring deals with seller financing. Darren also discusses the significance of keeping the investment process simple and focusing on cash flow. He highlights the power of visualizing goals and maintaining a positive mindset. Additionally, he shares his experience with social media marketing and the benefits it has brought to his business.
Takeaways
- Building relationships with property owners and being a consultant for them is crucial in commercial real estate.
- Seller financing can be a beneficial option, but trust and rapport are essential in those deals.
- Strategic capital placement is important to ensure long-term cash flow.
- Managing a portfolio requires scalability and careful consideration of cash flow.
- Being flexible with timing and exploring 1031 exchanges can be advantageous in property sales. Don't be afraid of raising capital when transitioning to commercial real estate
- Look for deals with a 400 basis point spread between bank rates and cap rates
- Consider seller financing as a way to secure cheaper debt
- Keep the investment process simple and focus on cash flow
- Visualize your goals and maintain a positive mindset
- Utilize social media marketing to connect with potential investors and build your brand
Chapters
00:00
Introduction and Background
03:23
Transitioning from Residential to Commercial Real Estate
08:45
The Excitement of Commercial Real Estate
11:15
The Power of Building Relationships
14:53
The Importance of Trust and Rapport
18:12
Don't Rush into Offers, Get to Know the Seller
21:05
Strategic Capital Placement and Cash Flow
23:06
The Reality of Cash Flow and Portfolio Management
26:53
The Need for Scalability and Strategic Investments
31:20
Considering the Future: Selling and Rolling into New Deals
34:00
Transitioning to Commercial Real Estate and Overcoming Capital Raising Fear
36:49
Structuring Deals with Seller Financing
39:45
The Importance of Cash Flow in Commercial Real Estate
43:40
Factors to Consider in Industrial Property Investment
46:23
Keeping the Investment Process Simple
57:32
Harnessing the Power of Social Media Marketing
Hope you enjoy & God Bless!
Subscribe to the podcast and connect with us on Instagram and Youtube: @graham_storey and @thejessedurham for more.
Darren Smith, an owner-operator of industrial properties, shares his journey in commercial real estate. He started in residential real estate, but after meeting commercial investors and seeing the potential, he made the switch. Darren emphasizes the importance of building relationships with property owners and being a consultant for them throughout the process. He also discusses the benefits of seller financing and the need for trust and rapport in those deals. Darren advises being strategic with capital placement and considering the long-term cash flow implications. He shares insights on portfolio management and the importance of scalability. In this conversation, Darren Smith shares insights and advice on transitioning from residential to commercial real estate. He emphasizes the importance of overcoming the fear of raising capital and provides tips on structuring deals with seller financing. Darren also discusses the significance of keeping the investment process simple and focusing on cash flow. He highlights the power of visualizing goals and maintaining a positive mindset. Additionally, he shares his experience with social media marketing and the benefits it has brought to his business.
Takeaways
- Building relationships with property owners and being a consultant for them is crucial in commercial real estate.
- Seller financing can be a beneficial option, but trust and rapport are essential in those deals.
- Strategic capital placement is important to ensure long-term cash flow.
- Managing a portfolio requires scalability and careful consideration of cash flow.
- Being flexible with timing and exploring 1031 exchanges can be advantageous in property sales. Don't be afraid of raising capital when transitioning to commercial real estate
- Look for deals with a 400 basis point spread between bank rates and cap rates
- Consider seller financing as a way to secure cheaper debt
- Keep the investment process simple and focus on cash flow
- Visualize your goals and maintain a positive mindset
- Utilize social media marketing to connect with potential investors and build your brand
Chapters
00:00
Introduction and Background
03:23
Transitioning from Residential to Commercial Real Estate
08:45
The Excitement of Commercial Real Estate
11:15
The Power of Building Relationships
14:53
The Importance of Trust and Rapport
18:12
Don't Rush into Offers, Get to Know the Seller
21:05
Strategic Capital Placement and Cash Flow
23:06
The Reality of Cash Flow and Portfolio Management
26:53
The Need for Scalability and Strategic Investments
31:20
Considering the Future: Selling and Rolling into New Deals
34:00
Transitioning to Commercial Real Estate and Overcoming Capital Raising Fear
36:49
Structuring Deals with Seller Financing
39:45
The Importance of Cash Flow in Commercial Real Estate
43:40
Factors to Consider in Industrial Property Investment
46:23
Keeping the Investment Process Simple
57:32
Harnessing the Power of Social Media Marketing
Hope you enjoy & God Bless!
Subscribe to the podcast and connect with us on Instagram and Youtube: @graham_storey and @thejessedurham for more.
Previous Episode
The Importance of Getting in The Right Rooms with Sean Martin
Sean Martin, a healthcare entrepreneur and commercial real estate investor, shares his inspiring journey from a challenging upbringing in the Bronx to becoming a successful investor. He emphasizes the power of belief and taking chances on oneself. Sean discusses the importance of getting uncomfortable and pushing oneself physically to build confidence. He also highlights the value of finding the right rooms and surrounding oneself with like-minded individuals. Sean's portfolio primarily consists of commercial retail and medical spaces in the Midwest. Sean Martin shares his experience in commercial real estate investing and the importance of diversifying knowledge. He emphasizes the value of leases in adding cash flow and property valuation. Sean discusses his role as a limited partner and the benefits of being a hands-off investor. He also highlights the significance of ownership and the impact it has on building generational wealth. Sean talks about his journey on social media and the power of authenticity in building a personal brand. He shares his vision for the Real Mentors program, which aims to shine a light on community leaders and provide mentorship to inner-city youth.
Chapters
00:00
Introduction and Sean's Background
02:34
From Prison to Realizing Potential
06:16
The Power of Writing Down Goals
10:48
Getting Uncomfortable to Build Confidence
18:42
Taking Chances and Getting Started in Real Estate
26:24
Investing in Commercial Retail and Medical Spaces
34:02
The Value of Leases and Property Valuation
36:43
The Benefits of Being a Limited Partner
38:32
The Power of Ownership and Generational Wealth
43:30
Building a Personal Brand on Social Media
57:00
The Real Mentors Program: Shining a Light on Community Leaders
Hope you enjoy & God Bless!
Subscribe to the podcast and connect with us on Instagram and Youtube: @graham_storey and @thejessedurham for more.
Next Episode
How To Scale in Commercial Real Estate with One of Texas's Best Brokers
Gabriel Rodarte, a Commercial Real Estate Broker and Investor. They discuss Gabriel's journey in the real estate industry, from starting with residential flips to transitioning into commercial real estate. Gabriel shares his insights on scaling his business, building a team, and the importance of time management and outsourcing. He also talks about his current commercial real estate portfolio, which includes mobile home parks, industrial warehouses, and new build projects. In this conversation, Gabriel Rodarte shares his insights on time management, the power of networking, and the importance of building a personal brand in the commercial real estate industry. He emphasizes the need to pivot and adapt in order to stay ahead in the market. Gabriel also discusses the impact of his podcast and Facebook community on his business, highlighting the value of engaging with others and sharing knowledge. He encourages aspiring real estate professionals to jump into commercial real estate if they have a passion for it and to focus on building their network and brand.
Takeaways
- Start with residential flips and use the same marketing skills and techniques in commercial real estate
- Find mentors and build relationships with successful people in the industry
- Outsource tasks and leverage technology to save time and increase efficiency
- Time block and prioritize tasks to focus on high-value activities
- Build a diverse commercial real estate portfolio, including mobile home parks, industrial warehouses, and new build projects Time management is crucial in the commercial real estate industry, and it's important to prioritize tasks and focus on high-value activities.
- Networking and building relationships are key to success in the industry, and social media platforms can be powerful tools for connecting with others.
- Building a personal brand through content creation and sharing knowledge can help establish credibility and attract opportunities.
- Pivoting and adapting to market changes is essential for staying ahead and finding new opportunities.
- Joining a podcast or creating a Facebook community can provide a platform for sharing knowledge, connecting with others, and growing your network.
- Jumping into commercial real estate can be a great choice if you have a passion for it, and it's important to learn as you go and embrace the challenges and opportunities that come with it.
Chapters
00:00
Introduction and Scheduling Challenges
03:11
Gabriel's Background and Entry into Commercial Real Estate
08:48
Scaling and Outsourcing in Commercial Real Estate
12:36
Time Management and Prioritization for Success
19:36
Building a Diverse Commercial Real Estate Portfolio
35:15
Mastering Time Management in Commercial Real Estate
38:10
The Power of Networking and Building Relationships
40:41
Building a Personal Brand in the Commercial Real Estate Industry
43:49
Pivoting and Adapting in a Changing Market
47:58
The Impact of Podcasting and Community Building
54:58
Jumping into Commercial Real Estate: Passion and Persistence
Hope you enjoy & God Bless!
Subscribe to the podcast and connect with us on Instagram and Youtube: @graham_storey and @thejessedurham for more.
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