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ATTENTION REALTORS: ADD COMMERCIAL REAL ESTATE SALES TO YOUR BUSINESS!

By Ann Sabbagh

Mortgage and Lending with Seacoast Mortgage Corporation, RI (20021119LB & 20031576LL), MA (MC2107) & CT MLO 10920

June 14, 2009 10:00 AM

The word "commercial" scares many realtors AND mortgage brokers. WHY? Well, yes, it is a specialized area of selling and lending. Acronyms like DSCR, absorption rate, management fees, ROI, Cap Rate, vacancy factors can scare away the residential broker.

Commercial properties encompasss anything that is not 4 family units or less. These include: 5 units or greater apartment buildings, mixed use, gas stations, industrial, land, salons, retail strips, etc...

I do believe realtors should have a residential lender AND a commercial lender at their disposal. In order to survive in this crazy real estate market, realtors need to NEVER turn away a sale. But, if they have never sold a commercial property, it is BEST to team up with a commercial lender/broker, who can help them with the listing presentation and attract the future buyers. How can a lender help? Simply by preparing ROI (Return on Investment) and Cap (Capitalization) Rate Schedules. These schedules will show what the property is truly worth on the market based upon its current expenses and income.

With commercial properties, it is not so much about the buyer than it is about the property.

So, what are you waiting for? Find a mortgage broker who is skilled in commercial lending and become a TEAM and go after the commercial market. It's a GREAT market and it's exciting, too!

Ann Sabbagh

Vice-President

Seacoast Mortgage

Specializing in Commercial and Residential Financing

www.annsabbagh..com

(508) 243-1190

"When you choose me as your mortgage consultant, you also choose a financial planner who cares about YOUR financial future".

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Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

No thanks. My broker training was primarily commercial and I didn't like it at all.

Jun 14, 2009 10:09 AM

Marcus Valdez

Berkshire Hathaway Rocky Mountain Realtors - Fort Collins, CO

I think some people are able to do both types of tranactions however i would strongly suggest against most agents selling both commercial and residential property. If you want to make the most of your time and the largest return on investment be the best. The best are rewarded with a large following.

Also i have very real worries about part time residential agents and agent without commercial experience trying to navigate through a complex deal with extensive due dillegence needed. (ordering a Phase 1 or higher enviromental, needing and ordering a ALTA survey.) the last thing i feel an agent deperate for a deal is would be to have a large lawsuit coming after them. Just a word of caution.

Jun 14, 2009 10:45 AM

Ann Sabbagh

Seacoast Mortgage Corporation, RI (20021119LB & 20031576LL), MA (MC2107) & CT - Pawtucket, RI

President, Sr. Loan Officer

Marcus,

That is why I said to "team up" with a mortgage broker/lender. When selling commercial property, it is understanding the ROI and Cap rates and other info that a financial professional can provide. I have teamed up with several residential realtors and they LOVE selling commercial now. Perhaps it's not for you, but the TEAM approach has proven itself succesful.

Thank you for your comments!

Jun 15, 2009 02:27 AM

Marcus Valdez

Berkshire Hathaway Rocky Mountain Realtors - Fort Collins, CO

Sorry to disagree ann but if your the lender and the agent makes a large mistake they are coming after the Agents E and O policy and personal assets. The agent is the licensee and needs to be know enough about commercial deals to keep the client safe. it might have worked well for you because you sound good and it might work for some agents but i can tell you broad advice like that to a largely unqualified base of agents i think is a mistake.

Jun 16, 2009 10:07 AM

Mike McCann Nebraska Land Broker

Mike McCann - Broker, Mach1 Realty Farm & Commercial Land Broker-Auctioneer Serving Nebraska - Kearney, NE

Farm & Commercial Property For Sale 308-627-3700

Hi Ann, I agree with you that you should have at least one and actually more than 1 commercial lender on board. That does not mean they get the business, but they are a wealth of info. I actually know about 20 commercial lenders and they are all great although some would get my referrals over others. Same goes for residential lenders and title companies and inspectors.

I would disagree with Marcus...using your theory Marcus, why would any real estate agent ever get started selling any kind of real estate if they are worried about E & O issues and making mistakes? That is why you should be working for a qualified and experienced managing broker.

My other question to you, Marcus, is what group of "largely unqualified base of agents" are you talking about? It appears to me that you are making assumptions that you have no way of quantifying.

I think you actually are the one that is wrong here...surely you know how to protect your personal assets in this business. I suspect that most agents also know how to protect their assets.

I also believe that the transition from residential to commercial is not hard and can overlap...and most property mangers will agree with that if they will be honest. Now whether they want to or want a different set of problems to deal with...some do not want he the additional problems or the different kind of stress.

I would agree with Lenn that it is not for everyone. I have done both together and separate and they each have their own unique positives and negatives.

Marcus...if it isn't for you, that is great...but please don't discourage someone else from wanting to learn more...the next great commercial (and residential) agent may be reading your stifling words and that isn't fair to the blogger and to the other readers.

Mike McCann Broker

Jun 16, 2009 12:23 PM

Ann Sabbagh

Seacoast Mortgage Corporation, RI (20021119LB & 20031576LL), MA (MC2107) & CT - Pawtucket, RI

President, Sr. Loan Officer

Mike,

I wish we could do business together! You are a POSITIVE and REALISTIC agent. I do agree that it is NOT for everyone, but someone, like yourself, with a POSITIVE attitude and a DESIRE to learn and the WILL to make it happen and the INTELLIGENCE, is the combination of traits that will enable someone to "crossover" to commercial real estate. I work with several agents that have made the step into commercial and are quite successful.

Thank you for your comments! Best wishes in Nebraska!

Ann

Jun 16, 2009 01:35 PM

Pacita Dimacali

Alain Pinel - Oakland, CA

Alameda/Contra Costa Counties CA

In my office, we have enough realtors who have done, and continue to do commercial listings and sales. While I will not shy away from doing a commercial sale, I will and have asked at least one of them t partner with me, not only during the presentation, but also during the actual transaction.

Besides, our founder made his fortune in commercial real estate as a developer, buyer, investor, seller...so he has a wealth of information to share. And we've had round-table discussions about this. So I do not fear to tread as long as I have someone to guide me.

Best to you!

Jun 17, 2009 05:37 AM

Mike McCann Nebraska Land Broker

Mike McCann - Broker, Mach1 Realty Farm & Commercial Land Broker-Auctioneer Serving Nebraska - Kearney, NE

Farm & Commercial Property For Sale 308-627-3700

Thanks for the kind words Ann. I also wish you the best of luck.

Pacita...the perfect way to get your feet wet and to learn the industry. There is one other reason that I really like commercial and it is actually a selfish reason:

The vast majority of my business is with business people who work 8-5 or 8-6. I show very very few commercial properties in the evening and on weekends.

I also carry with me the company emergency phone for all of our commercial and residential tenants.

I have had 2 tenants call me in the past three weeks after hours. How many residential agents can say they have only had 2 clients call after regular business hours? That equates to more time with my family and that is awesome!!

Mike McCann Broker

Jun 17, 2009 03:00 PM