Click here for a list of all radio shows
Blog talk radio.
Randy: What’s up world? And welcome to REALTY UNIVERSAL, Inc. Radio! The fastest hour in radio, no doubt about it. I’m Randy Zachary and this is a show about real estate, about God, about life, about giving back, about being the change in the world that you’d like to see.
A privilege to bring to you Nathalie Mullinix and REALTY UNIVERSAL, Inc., a company dedicated to excellence. REALTY UNIVERSAL, Inc. is a revolution founded on a very simple principle. We believe sellers and buyers should have choices. We have been a pioneer in the menu programs system, more on that of course a little later. Nathalie Mullinix, president and founder of REALTY UNIVERSAL, Inc., averaged over 80 million dollars a year in sales prior to stepping back to focus more on building REALTY UNIVERSAL, Inc. Membership Network. She’s an accomplished speaker, writer, consultant, trainer, and oh, by the way, mother. She travels worldwide literally, spreading the Gospel if you will, of REALTY UNIVERSAL, Inc.. And now, Natalie Mullinix!
Nathalie: Hey, everybody! I’m so happy to be here. I’m actually gonna be on today from Hawaii and we’re just so looking forward for this. Today’s show is gonna be so exciting. We’re gonna be bringing on Jim Gillespie in a minute and typically on the first half we talk about real estate and on the second, self-help and motivational, etc. But we’re gonna get Jim for a little longer today and I think it’s gonna be a lot of fun. So wherever you are listening in the world – and we have so many callers and people who listen to our archive, this is REALTY UNIVERSAL, Inc. Radio. If you’d like to call in, the number is 347 945 5428. Really interesting stuff to go through today so I’m gonna go over and get ready and introduce Jim. Jim has over 35 years of experience in commercial real estate. He’s been a successful agent and manager and has been president of three different commercial real estate companies [inaudible] in Southern California. We are so blessed today because he has worn so many hats and the information that he’s gonna give today is bar none the best. In addition to his past in commercial real estate, he’s a master practitioner and trainer in the fields of hypnotherapy and neuro linguistic programming. I’m stumbling here. And he holds a PHD in the field of clinical hypnotherapy. Jim has been published, interviewed and written by in The New York Times, Los Angeles Times, Time Magazine, Broker Agent News and he’s been recognized as being their editorial contributor of the year. So for you brokers out there this is wonderful. The California Real Estate Journal, First for Women Magazine, Commercial Investment Magazine and the SIOR professional report. So Jim’s been in the industry for years and years and since 1998 he started focusing full time on training, commercial and real estate agents and brokers. He’s written more than 400 articles that have been read in our industry and read by tens of thousands of commercial brokers. So we’re welcoming Jim Gillespie! How are you doing?
Jim Gillespie: Hey, Nathalie! Good! Thanks for having me on the show.
Nathalie: It’s my pleasure. So you have worn many hats, you know this like the back of your hand. You’ve been at it for 35 years and I’m gonna pick your brain if that’s ok.
Jim Gillespie: Yeah just leave me some brain cells at the end.
Nathalie: Ok. Hey, and you’re calling from California I think, right?
Jim Gillespie: Yeah.
Nathalie: What’s the weather there? We’re getting into that time of the year where everything is starting to change.
Jim Gillespie: Well I’m about an hour inland of San Diego in an area called [inaudible] we have like wineries and stuff like that and about an hour and a half from downtown LA. So it can get hot here during the summertime, but we had 5 days in a row with 100 and now it’s a cool 80 but starting tomorrow it’s supposed to be [inaudible] and summer’s given us a last nudge, saying “I’m not gone yet!” But hopefully in the next week or two we’ll be down to normal weather.
Nathalie: You’re getting like [inaudible], like Vegas, right?
Jim Gillespie: Exactly! And – I mean a weak or two ago, I went to the coastal cities in Newport Beach, right at the ocean and it was too hot to be outside. We went into a building to talk [inaudible] because it wasn’t comfortable to go out and talk. “Let’s go to the building where there’s air conditioning and we won’t be sweating while we have that conversarion.”
Nathalie: It’s funny! In Hawaii we’re getting humidity and hardly [inaudible] over the last two months. You know, the temperatures are usually in the higher 70’s and 80’s but the humidity’s been horrendous. But it makes a big difference, yeah. I’ve got my girlfriends who are in their 50’s and calling each other saying “Are you hot today? Is this the heat or something else?” Oh my God, that’s a silly question. Because here it’s weird to have this high humidity but I think we see the changes come all over.
Jim Gillespie: But it’s why the place looks like paradise, so at least you got that going on.
Nathalie: Yeah, you just kind of – but the air conditioning isn’t pretty common so it’s something that needs to be added. So tell me, you’ve been doing this for so long and it’s a pleasure that I get to pick your brain because you wear so many hats and were in the business selling – how long did you do that?
Jim Gillespie: It was basically 20 years. I was an industrial agent in downtown LA so I would lease buildings to company like clothes manufacturers, importers, people who would import electronics and basically have a warehouse so they can ship out of. It’s very interesting though that with the garment industry, it would be interesting to see how segmented that is. I mean you’ve got a company who’s got the finished product and then all over town you’ll have independent businesses that have the fabric itself and then another place that will cut the fabric on these really long cables and a lot of places that will do the sowing of the fabric. And then you’ll have one company that does nothing except specifically putting zippers on the product. So it’s very segmented and you don’t realize when you’re in the retail store, just buying the thing.
Nathalie: I would have thought that manufactory does it all.
Jim Gillespie: It’s very segmented. Small independent businesses are doing each step along the way to give you the final completed garment that you’ll be wearing.
Nathalie: That’s amazing! Unless it comes from China.
Jim Gillespie: Yes, unless you’re importing completed but it’s probably done the same way over there too and you’re just buying the finished product over here.
Nathalie: Wow! So you’re doing a lot of leasing of the warehouses and buildings –
Jim Gillespie: And the manufacturing buildings so the manufacturers will have the highest ceiling and stack the product up high, the manufacturing buildings don’t need the high ceilings but they need great power distributed all along the building so they can have sowing machines all across it doing manufacturing and the sowing part.
Nathalie: So you were in it, in the commercial side, and actually take it from the ground up? Do they own it? Do they typically like that type of situation?
Jim Gillespie: For example, where I was, the garment people wanted to be around certain areas in downtown LA. So a lot of the times their business decision was driven by “We need to be close to the hub of the garment industry” so they would either lease or buy. Ideally, everybody would like to own, but it’s a matter “Should I buy this right now? Is it a good decision or should I lease it right now and look to buy something after we’re comfortable with how the business is doing somewhere down the road?”
Nathalie: With the budgeting that makes sense.
Jim Gillespie: Yeah, in downtown LA you get a lot of old buildings and stuff so you’ll get old brick buildings and sometimes multi store. A lot of the times the company is trying to do with the type of building that presents itself at the right price, but they wanted it in this area because they want to drive around to all of this different businesses that are manufacturing their garments from them so they don’t have to drive large distances to each one.
Nathalie: So you being in commercial brokerage there, do you not actually want to be a knowledgeable about the rate of return and renting versus owning, you have to know the type of business that these people are getting into?
Jim Gillespie: Yeah that would be helpful because when you’re working with people like this, whether they’re leasing or buying a building you’re talking about making probably the most important financial decision they’ve ever made in their life at this moment in time, outside maybe of their own home. So anything that you can do to understand their business and talk to them from their point of view is very helpful as opposed to just being the person who’s trying to lease them a building and doesn’t understand their business from the position of the shoes that they’re standing in the middle of it, yes.
Nathalie: That makes a lot of sense. You have to talk their language. How did you get into – how did you decide, when you became licensed and I’m assuming that you were already in California and decided you wanted a real-estate license. How did you decide you want commercial versus residential?
Jim Gillespie: I have my cousin to blame for his so – when I was in college, I was going the first two years in UCLA and I was an economics major. Now something interested about it is that you cannot get an undergraduate degree from UCLA, you can only get a masters or PhD in business because they have the different majors across the systems. So UC Berkley, is very focused on business so you can get a bachelor in business there. So the closest I could do at UCLA was that I could be an economics major and I’m thinking “What am I gonna do that? Who is looking to hire economics major?” I was stuck with going to graduate school but I don’t think I wanna do that, I wanna get in the business world. I was hearing about this thing called CPA accounting that’s a hot and booming industry and that’s what I wanted to do and I transferred universities to Hellstate University Northridge, which has put together a great business school. I was getting my accounting degree and a guy in the upper classes I was like “Man, is this the kind of stuff I really wanna be focused on for the rest of my life?”
Nathalie: Kind of boring right?
Jim Gillespie: It had the hardest class in my life because it had nothing to do with accepted accounting series, it was all about legislation passed by congress, it had nothing to do with accounting and it could change in any given year and you just had to know the regulations in each and every year. And my cousin was working at the time for a commercial and now it’s known as [inaudible] even though there’s a company with the same name today. But he was a year older than me, was working in sales and worked in this job that was designed for people who are in college to get their feet wet, as far as learning about commercial state brokerage as a career so he was able to get me into that spot, in their Beverly Hills office. I was getting on the phone with companies, trying to find leads for the sales people tracking how much square footage the [inaudible] space had and where their lease has expired and stuff like that. And so this was the late 1970’s and commercial brokers were making money hand over fist at that moment, that was a huge boom on the market and it seemed so easy and so much more fun that accounting so that’s what I’ll do! And when I graduated, I graduated right when the market was taking and [inaudible] commercial brokerage full time in 1980 and everything had change. The prime rate went to 22%, inflation was rampant and it was just nuts! And I got in this business and asked myself “How does anybody make a living off this?” So it took about maybe 5 years for the market to loosen up after that recession, then things got better and I became a full real-estate broker in downtown Los Angeles.
Nathalie: Amazing! I think we had you in real-estate!
Jim Gillespie: In commercial real estate brokerage, you’re dealing with seasoned principles who are experts. They’re owning their own businesses. Especially if you’re working with entrepreneurial people as opposed to the major corporations, but I mean, they are harsh negotiators, they agree to a commission rate and when you get close to a deal, they say “I thought you were gonna give me more than this, you need to cut your commission! I don’t want to pay that commission.” And it’s just like when they deliver they all of a sudden turn on you and say “I don’t wanna pay you but we agreed to” and they try to play hardball and it’s just – you gotta be able to sense when somebody is bluffing and just try to get money out of you but they want to do the deal anyway versus they’re serious and they’ll walk in from the transaction if you don’t increase their commission.
Nathalie: I’ve heard about it many times, that it takes longer to get paid and these things happen at the end. Even though you have the contracts and the commission covered and your buyer broker cover? It didn’t matter?
Jim Gillespie: Here’s the thing! You’re dealing with people who sometimes have the attitude I know according to the contract I’m supposed to pay you, but go ahead and sue me! I don’t care! I will pay my attorney just because I don’t wanna pay you! And then they hope to reach a settlement for less money just because you don’t want to pay your attorney anymore, you don’t wanna go through the agony. And even though they’ve spent more money on this thing with the reduced commission and their attorney they feel like they’ve won and that’s the most important thing.
Nathalie: And the winning is everything! For some reason with ego’s and independence and all that other stuff. I’ve been on the residential side – not to get into the stories cause I wanna keep our focus on what you’ve done and what you’re doing but I’ve had it like when it would be so stupid at the end of the table, because people have to win. I mean the dumbest things, that are so small and you’re like “This isn’t worth it, just take it.” Of course I wouldn’t wanna do that over thousands. And it wasn’t – but just because somebody had to win. But you’re right, that’s kind of scary.
Jim Gillespie: It’s like what happens is oftentimes when you’re negotiating let’s say a purchase of a building, whether or not you’re successful at arriving at an agreeable price oftentimes has less to do with whether it’s a fair price and more to do with each principle acting like bulls circling trying to get a pound of flesh out of the other person in the transaction and the feeling of whether or not they’ve been able to do that against the other person again, as opposed to whether it’s a fair price for the property.
Nathalie: What a game! That’s where your NLP came in handy, I’ll tell you! All the psychologist degrees.
Jim Gillespie: Yeah, well I’ll tell you, it’s been much better for me because I really studying the NLP more as I was getting towards the end tail of my broker career and I got into coaching, helped me tremenduously with the coaching because of the level of detail that I got into it because I have coaching clients call me up and say “Look, I got these principles to go in this transaction. What do you recommend I do?” And I tell them – look, you go into this person’s –
Nathalie: If they’re in a group, you help them?
Jim Gillespie: Yeah, absolutely! And this is what you say in this situation, these are the questions that you ask and I’ve created prescripts for commercial brokers to use this NLP technology and sometimes, I’ll have a coaching with a client and say “Look, here is what I want you to do.” I want you to write down every single objection that you’re getting thrown at by the people in your brokerage business and we’ll take one session on the phone and you feed those objections to me one by one and I will show you linguistically how to overcome and move beyond them and I’ll have the person record the call so they can listen to all of this and learn how to deliver these responses on auto pilot whenever they come up again in their career.
Nathalie: That’s fantastic! How do people reach you?
Jim Gillespie: How do they reach me? If they got pretty long arms, they can reach to the phone right now. My website is commercialrealestatecoach.com. That’s the best place to go to. If you look, I’ve got a lot of blog posts over there and I’ve got a good number of two minute videos that are educational on the things you need to know to be successful in commercial real estate brokerage, like what to say when you’re talking on the phone, what to say to the receptionist, to move beyond her, what type of voice mail message to leave that will compel the decision maker to be that much more interested in picking up the phone and calling you back and I just released one on an approach you can utilize to close people in a realistic situation. So basically get them to want to move forward and sign the listing agreement. Persuasion is another subject [inaudible] these two minute tips that you can look at that brokers went like “This is really cool! I can use it all in my business.”
Nathalie: And start learning and make it defusing. I know, after being in the business for 30 years, people come to me for advice and they don’t take my advice. Like why did you come to me? I think – “How do you do it and not get jaded for not taking the advice?” Or do you find that people come and take them.
Jim Gillespie: I mean it really depends on the coaching client. I mean my dream coaching client is somebody who is hugely motivated to become successful and take their business to the next level and they’re willing to be coachable and make it happen because a lot of the times brokers are in a position of “I’d really like to make more money” but when it involves changing what they do, then they give up.
Nathalie: What are some of the biggest challenges that brokers are facing in expanding their business? Is it just that or they’re blocked?
Jim Gillespie: Well it can be, depending on the situation but talking about the activities that they do, I would say one of the biggest challenges that they face is once they’ve done the business development and they’re developing leads that they’re working on, and showing properties and negotiating and closing transactions, that they often drop out that [inaudible] and they’re working on the transactions that are on their plate and then they get a hole in their pipeline after they close their transactions because they hadn’t continued doing that business development part and they don’t have the leads to work on in the immediate months that they [inaudible] that they were working on.
Nathalie: They forget prospecting, they just don’t make it.
Jim Gillespie: Yeah, they don’t have business going on so they start prospecting getting business then they get leads that are generated and they drop out the prospecting because they figure “What I need it for?” I’m in the middle of all these great activities I’m gonna make great money from and they don’t realize that from the moment you start prospecting again, there’s gonna be months before you close those transactions and there’s gonna be a hole in the pipeline when they get back to the prospecting again but they’ve got no transactions closing.
Nathalie: It’s like with the snowball effect in this industry, right? You have to keep doing it and if you stop doing it – I’m not trying to flip this to residential cause this is strictly commercial but a lot of our listeners will be both. After everything you’ve done and been through if you’d ever go back, would you consider getting into residential or is it like “No, I’m a commercial kind of guy”?
Jim Gillespie: It’s interesting and quite funny that you asked this cause I think about this, but there are different things of the residential that I like looking at from the outside. For example, you don’t have to deal with environmental issues in the residential. With industrial, you get businesses polluting the property before anybody buys it or moves in has to be addressed. With residential, generally speaking, they’re gonna make sure financing is available more than commercial. [inaudible] residential are guaranteed by federal agencies and the government which doesn’t happen in commercial unless you have business association loans. So when you try and get loans in commercial banks, where the loans aren’t guaranteed by the bank. So if you stop making the payments, the banks are off the hook on the loan whereas with residential, where the loans are made by [inaudible] the original lender has already got their money so if it goes south on the loan, it doesn’t matter since they’ve been paid.
Nathalie: And you don’t have as much time.
Jim Gillespie: Yeah but residential is different [inaudible] because there’s so much of an esthetic aspect to it and I laugh and go “If I was selling a home and somebody said “I love it, but the shade above the fireplace is off by a fifth of a shade, I’d go nuts!””
Nathalie: I know what you’re saying, I’ve been there. [inaudible] there’s things in it that are very – and it elementary and with the Internet, everybody thinks they know everything, especially with the real-estate shows right now. The shows are staged and not really the real world and people think they are. That’s one that I hear constant.
Jim Gillespie: This just happened to me with a coaching client who is in the process of selling a property, the prices have been agreed to between the buyer and seller and they did some boilings in the soil found out that there’s contamination that needs to be cleaned up to the version of $50.000. So the price has been agreed to and what does the seller say? “I want the buyer to pay for that!” And I just laugh and go “Why should the buyer pay $150.000 over market to clean up the mess that you made because you were in the building?” This doesn’t happen. The seller’s attitude is “I know we made the mess but we want him to pay for it.” And that’s the kind of thing that goes on.
Nathalie: Wow! That’s like take it or leave it – too bad. Whatever, we’ll have another buyer.
Jim Gillespie: Right. The seller doesn’t need the money, it’s a $3 million property so when he doesn’t need the money he can take his ball his home. Since The buyer won’t give him an extra [inaudible].
Nathalie: You know, it’s funny cause it makes them feel better than the dollar mount sometimes.
Jim Gillespie: Yeah it’s scary. It’s whether they can get the other persons to agree to their terms.
Nathalie: That’s amazing! [inaudible] the buyers already spent a lot of money doing their due diligence paying for the inspections and the reports and yeah. It’s about disclosure. The disclosure laws in commercial I don’t know – I mean in residential they’re very specific and have to disclose if anything that’s wrong. On the commercial I’m not sure how we ask. Like I’m in the middle of a deal now, they have to disclose and have the environmental report or whatever they will. But I don’t know – I guess there’s not as much liability as there is on the commercial side than the residential.
Jim Gillespie: Well it just depends on what’s changed after the money’s changed.
Nathalie: I wonder if there’s a statute of limitations on – I’m not sure what it is for the [inaudible] that we’re all stationed. You know when they remove the tanks and then they have to put the tanks back in? It’s amazing! So what are some of the biggest mistakes brokers make? You did talk about prospecting but do you see other mistakes that they’re making?
Jim Gillespie: Well I’ll tell you one thing that generally speaking, commercial brokers don’t embrace. And I use the term broker interchangeable with agent on the commercial side, because we use that term and whether or not someone has a [inaudible] it’s just a generic term and it’s basically, there are some commercial brokers. And I know in residential, they’re more distinctive than you’re an agent if you’ve got an agent license and you’re a broker if you’ve got a broker’s license.
Nathalie: Ok, so commercial brokers are just brokers anyway?
Jim Gillespie: Yeah, I think maybe they borrow the term [inaudible] selling in commercial real estate. One of the biggest mistakes is that commercial brokers are oblivious to the idea of marketing themselves outside of doing prospecting. Residential agents, the top agents in the business are much better than this and they send post cards to their people or they’ve got their own website going on, they capture peoples’ email addresses and put them in a campaign and not a responder or something like that. Commercial brokers, if they would mail once or twice to their people with great tips on what’s going on in the market or things that someone needs to know about their next commercial real-estate transaction, they would brand themselves in peoples’ minds like my clients are and they’re following my direction to do this, but most commercial brokers, they don’t want to spend any money on marketing, they look around the office and they don’t see anybody send out this kind of stuff so they figure “It must not work because if it did, the other people in my office would be mailing.” But when you do this and you mail twice a month to people, you’re branding yourself in their minds 24 times a year on top of making a couple prospecting calls to them twice a year and you are in their mind and they sometimes take these tips cards and they put them in their property file so when they go there, there’s your card with your information and phone number and they’ll call you. And it’s just branding, just like watching automobile commercials on TV where most of the time we’re not looking to buy a car but when we are, we start looking at the commercials more closely and we know the test drive and it’s the same thing. Different transactions.
Nathalie: Yeah, they remember the name and it’s kind of familiar and it’s psychologically and they go “Wait a minute! Let me touch base with them!” And you would say to do post cards, not just emails. Have something that’s in the mail and they can hold in their hand.
Jim Gillespie: Sometimes they’ll stick it on their desk and think “I have to call this person” and it makes it there for days. And I mean people were just inundated with spam and everybody is advertising and not everybody gets the same kind of attention so the good thing to do. But still, I mean there’s something about the touchy feeling in the mail that brands you in their minds and they go “We’ve been getting your emails and I think I should call you cause we’re thinking of selling right now.”
Nathalie: That’s fantastic! And with email, the spam blockers, a lot of them aren’t getting through at all. So that’s interesting, post cards for commercial brokers. What are some of the other arenas that you think they should pay attention to? Is it networking or other things? I mean should they join SAOR or have them do it automatically?
Jim Gillespie: Well SAOR is the highest earning agents in the business. Their requirements to become a member, you have to show a certain amount of transaction volume over time which has tended to be historically the highest requirements income-wise in order to get into the organization. So it’s an international organization [inaudible] in the United States on high level brokers involved. So I would say it’s a great place to go [inaudible] and going to conventions and stuff like that, that you may meet people you generate referrals from and having an obsession with them. And then there’s another organization called CCIN which for people who are members of both say you go to CCIN for the education and SAOR for the networking. CCIN has the most extensive education program for people to learn the trade of the brokerage and specifics like that. And if you play your cards right and talk to both in advance, I am told that you can setup your CCIN education requirements to get that designation and also have those education requirements already qualifying you for the membership.
Nathalie: Ok, that’s good to know!
Jim Gillespie: So that’s good.
Nathalie: Kind of killing two birds with one stone.
Jim Gillespie: Yeah, but in terms of other things that brokers can be doing, it’s really important to make sure they have a great database because if the people you want to do business are in there, you can’t contact them but your competitors can so you’ve shut yourself out if you’ve got holes in the database without the addresses, names and phone numbers of the people you want to do business with.
Nathalie: And it’s so easy getting databases nowadays. All you need is a good program. There’s so many programs out there that it’s always difficult to decide.
Jim Gillespie: Presentation skills also. It’s one thing to generate the lead, but do you have the presentation skills that people like you that the broker they want to represent them? Build a long-term relationship! So many brokers get in the habit of prospecting only people they’ve never done business with and they drop out any kind of people they’ve ever done transactions with. They don’t mail to them! So your competition is mailing them and you’re thinking “They won’t need anything for 5 years so why should I call them?” And when you do, they’re in a better relationship with the person who’s been calling them for five years. And I really recommend that with your past clients you give them gifts throughout the year, coming from the heart. Basically creating the impression that even though they may not be close to doing their next transaction, there’s still a relationship in place and you are still their commercial real estate broker which helps solidify the bond that you’re gonna be working together on their next transaction.
Nathalie: That’s amazing! Keep that going, relationships are huge! Because when someone gets into commercial, like nowadays with the internet, you can do business anywhere, but with commercial you have to go to the sites, right? So you have to be involved in one location.
Jim Gillespie: As long as you’re working in a specific territory, for the most part yes. If you’re there and showing space to the people that are gonna move in there, it’s easier to not have to travel as much and do things long distance, if you’re selling investments where the buyer is not physically going to move into the building, cause they don’t need to look at it and go “Can we put this machine here or there?” Or apartment buildings or something like that, but to do your due diligence, you definitely still want to get out there and inspect the thing and make sure that the people are going through the inspections and the phase one environmental stuff. But it’s easier to do investments from further away and just make sure you get out there and do your inspections before everyone moves forward with the transaction, to cover your butt in case of a liability.
Nathalie: Can you delegate some of that? How effective are commercial brokers – have you seen them delegate stuff to others?
Jim Gillespie: They’re horrible! Brokers tend to think “I gotta do all by myself! I don’t wanna spend a dime out of my pocket to delegate to because nobody in my office does” and they’re of the thinking that unless the office is paying for it, they don’t want to spend the money themselves.
Nathalie: If they make such great money, why wouldn’t they say “I’m making x amount of dollars, I can delegate this out for 10-15-20 an hour, why would I do it myself?”
Jim Gillespie: Under ideal circumstances they would see it that way, but they tend to focus more on “No! That’s $20 coming out of my pocket so let me do it instead!” And there’s a guy, a very successful member of ASOR and CCIN who I’ve interviewed several times and I coached him too. He has a short and simple expression. He said “If you don’t have an assistant, then you are an assistant.”
Nathalie: That’s exactly true. I can’t imagine –
Jim Gillespie: [inaudible] and prospecting in your time, generally speaking it can easily worth hundreds dollars an hour, anybody you can pay 15 to 50 an hour to hand out administrative follow up to free up the time to generate those hundreds of dollars, that’s an amazing trade off of your time, but brokers have not come from owning their businesses, they’re sales people and this is the only entrepreneurial job they’ve had and they’re just not trained in this idea of delegating to make more money. And it limits the ceiling on how much money can they make because they have all this administrative stuff they won’t look for somebody they can hand it off to.
Nathalie: That was on my mind, I started hiring people in 1987 and the first time I did a million a month in residential back in 86. And always had a system since and I can’t imagine it. Just not the negotiating part but maybe the admin papers. That’s just wow! So in commercial business- cause residential if you have a small brokerage the value if you want to sell isn’t there. I’m not saying it totally isn’t there, cause every business has a price, but overall you don’t see a lot of companies buying many brokerages. You do see merging and some money coming in, but not always a lot. Is that different in commercial brokerage, if someone builds a good commercial practice that’s pretty scalable?
Jim Gillespie: It’s not normally at the local one office level kind of thing, but with the companies that have a presence in all these different cities. It’s happened with some companies in recent years. But here’s the thing! In commercial brokerage and I’m sure I’ve seen a lot of this in residential too, usually when somebody opens up their brokerage company, they’ve got their name on it. So it’s Jensen Commercial Real Estate and Bob is buying it, he’s got mister Jensen’s name on the door, ok?
Nathalie: So they can think ahead of time and make it a more generic name if they’re thinking long term.
Jim Gillespie: Yeah but usually they don’t get the idea of somewhere down the road I wanna sell this to someone else. Then there’s the ego factor “I want everybody to see my name on all this boards across town.”
Nathalie: That ego gets in the way.
Jim Gillespie: There was a guy, Nathalie, I remember – and this is going back 25 years ago. This guy I was in a meeting with for a real estate association that I was president of, the ARR Commercial Real Estate in LA and I’m sitting in the meeting and trying to do some stuff on behalf of the organization. So I’m meeting this guy who is volunteering for the first time and he’s a broker on the West Side of Los Angeles which is a very well to do area of LA. And he’s got this billboard like right across the 505 freeway which is right at Wilshire and Santa Monica BLVD which is like a major location. This is 25 years ago and the guy mentioned that he was paying 10,000 a month for that billboard. And that’s a tremendous ego thing whereas if you got a mailing list of all the people that you wanna do business with and send them an email twice a month, that will be far more effective than that thing because you’re paying so much for people who are not doing commercial real estate transactions looking at the billboard. And I just thought that was like an ego play where I want everyone to see my face.
Nathalie: Very expensive! With the internet and some other types of marketing, sometimes you can really get exponentially much better returns so that’s funny.
Jim Gillespie: 30,000 today would do the same thing.
Nathalie: We see those types of egos at the conventions and when we’re dealing with other brokers. “I’ve gotta handle this more with kid gloves cause the ego is huge.” And I don’t understand where the ego comes from.
Jim Gillespie: Let me mention this when you talked about egos at conventions and stuff. I see it a lot with people who are trainers and I got into doing what I’m doing because I wanted to help commercial real estate brokers and I can tell that there are other people in my industry who very much seem like they got into this because they want to be the guru on the stage, admired by everyone. Yeah and it’s obvious by their business practices and what they do and I just laugh. And to me, that doesn’t mean anything. I wanna know if I’m making a difference in your life, if getting on stage and talking is doing that, great! But I don’t need to be somebody in the front of the stage. I don’t care about that but it’s obvious to me when I see people looking at what I’m doing that that seems to be an important part in why they’re doing it. And to me, it’s just not that important.
Nathalie: No, I totally – I know after years of doing brokerage and lots of sales – I don’t think I have an ego, I don’t know what people would say “If you’re doing huge numbers, then you must have an ego.” But I love the teaching and training and for me, I like the fact that you are able to reach many people at the same time rather than the one on one. One on one in our industry after years and years gets to be trying because you’re just doing the same thing over and over again.
Jim Gillespie: I’ll tell you one thing that I generally love about the brokers who are attendees at commercial real estate conferences is that these are people that have chosen to spend money to fly to a location to sit in a room and learn about their business whereas the majority of people are going “I don’t feel I need to learn anything else, I’m not gonna go! I’m just gonna stay here and work.” So oftentimes, that makes a good statement about brokers, that there’s someone willing to take time out of their business and spend money and fly to a certain city for a couple days to learn more to help them grow more in their business and I love being in the room with those kinds of individuals.
Nathalie: Oh yeah, they’re hungry for learning.
Jim Gillespie: In commercial brokerage, this is a business where people can make a lot of money being hugely inefficient at what they’re doing. And despite – I finally realized that at any moment in time, I think 10 to 15% of commercial brokers feel that training would be worthwhile to them. They just think “No, I gotta do what I’m doing and somehow the market will change and start dumping more deals on my lap.” And normally, they don’t wanna learn and take the time.
Nathalie: Cause a lot of liability seems to be put on broker agents? Or are the lawyers taking care of that stuff in commercial deals?
Jim Gillespie: It depends on the size of the transaction and who you’re dealing with. On the smaller transactions, people might not have attorneys, on the midsize to large transactions they probably do, but always, no matter what happens in the transaction, it would he shocking if the broker’s company did not get sued, especially since the attorney likes to name anybody who might possibly have any liability. Then they get in the court and learn some things they didn’t know before and that person was named in the lawsuit. I remember an attorney told me once of the empty chair. If you get in the court room and find that the person responsible is not named in it, you can’t hold them liable.
Nathalie: So they name everybody! That’s really – well not it’s October 1st 2014, we went through the 2008-2010 dip. Do you think commercial is coming around and the lenders are back or do you think there’s still a lot of caution out there?
Jim Gillespie: There’s definitely better lending available now than there was several years ago. No argument about that! I mean things really dried up and it was tough to get anything going, but the lending has loosened up. Generally speaking, some areas are doing phenomenally. I mean I’ll tell you this. The areas that are doing the best tend to revolve around industries like technology and energy production. San Francisco, there’s a guy up there that’s got so much activity going on – this is mind boggling for me to come to terms with. In the city of San Francisco right now there are 7 million square feet of office leases that have been signed where the buildings haven’t even been built yet. Unbelievably huge! You’re looking at places like Dallas where they’re going nuts because of the demand for energy and higher energy prices and then South Dakota that normally would not be on peoples’ radar screens for capital income or energy production would channel fracking and stuff like that. They’ve got this formation there called the Bakkhen formation, which has been huge for fracking. [inaudible] South Dakota, in the last several years, has gone from 39th in the country for capita income to 6th in the country.
Nathalie: That’s amazing!
Jim Gillespie: So with energy and technology, they’re booming right now. In other areas it just depends on what’s going on with the local economy and how the businesses and services that they’re relying on doing.
Nathalie: That makes a lot of sense. Do you see anything about – I mean right now with the way things are going, how about internationally? Or is it just strictly here in the US?
Jim Gillespie: Well I’ll tell you what’s interesting, because when things were going really bad here like 2007, between 2007 and 2009 in the US, the total volume of commercial sales transactions went down by 93%. 2007 and 2009.
Nathalie: Did it really? Oh my god!
Jim Gillespie: I remember when I was going through the recession as a broker, somebody sent over a cartoon with a guy looking like a homeless guy standing on the freeway with a sign that said “Will lease your building for food.” It’s like you gotta laugh because of how difficult things can feel but what’s happening is things were worse around the world than here but we were thinking it was so bad. And international investors are going “Wow! Investing in my own country looks horrible right now because of how bad economically things are. But that United States they look to have a much more stable economy” so a lot of foreign investors started coming over here and buying money while our domestic investors are going “Wow! Things are really bad here, I’ll take my chips off the table!” The foreign investors go “Looks much better over here than in my own country so we’re gonan buy like crazy right now” and they have.
Nathalie: Florida’s been a state that a lot of people come to out of the country and of course you’ve got LA and New York.
Jim Gillespie: Chinese people have been buying hug in LA.
Nathalie: Yeah – I actually went Friday morning to something and there were Chinese investors. They’re buying in LA, New York, Hawaii – it’s amazing the amount of money that’s getting pumped in.
Jim Gillespie: There’s a woman that I know who when everything went south, she did something that most commercial brokers would not even think of and she just converted into making a ton of money. She began going to foreign countries and arranging audiences with investors and speaking to them about the opportunities of the United States and her marker, which was specifically Arizona. And she did this in Canada and at the end, people were giving her cards and filling up forms and she would follow up with them and arrange for trips to come down to her territory and she was selling property left and right where most of the local investors go “We’re not looking to buy right now so you don’t need to call us.” She capitalized on that sentiment that for the foreign investors, the US looks like the best place in the world.
Nathalie: Brilliant! That’s a great way to make money. If we think outside the box and don’t get pigeonholed into something.
Jim Gillespie: We’re so wrapped up in “Things look horribly here” but we looked great here compared to other places around the world.
Nathalie: Do you ever feel like “I’m gonna go back in it!” Or do you love what you’re doing now?
Jim Gillespie: The thing is this, I enjoy helping people much more and it’s just – I remember – I’ve been doing this like 16 years right now but I remember maybe about 20 years ago just going through the grind with these people. There was one year where I had three transactions in a row that I had to sue people on because they just decided to stiff me and not pay me my commission. And I was sitting next to a guy in my office and I said “You know something? I gotta find a way to do something else, otherwise I just think that this business is gonna kill me!” You have to have a stomach for it. There are big mood swings with ups and downs with weeks where three of your transactions fall apart and then a month later you come back and you’ve got two more on the horizon. Up and down wild mood swings when you’re counting on a check and it just doesn’t happen and you just go “Oh my god! How do I put one foot in front of the other and walk out the door this morning?” It’s a tough business.
Nathalie: I agree. I’ve been in it since 1985, you’ve been in it since the late 70’s and sometimes I go “Now I see why most people retire in most businesses after 20 years.” You start getting a little burned out and jaded and so I wonder. Cause with me, I love the membership association and I still do the brokerage and sometimes I get like “I don’t wanna do this part anymore!” It’s all burned out and for me to be an entrepreneur it’s my money going in to run the business and I think “Wait a minute! I’m bringing it in just to put it back out!”
Jim Gillespie: The majority of the people that I coach are amazing people because they’re people who wanna make changes in their life, they’re willing to step up money and submit to a program to do it. But every once in a while, I have to deal with somebody who is not fun, who comes forward like they wanna do this, then they postpone their calls with me and start dragging it out. And it’s just, this is not fun when they’re making excuses, they’re cancelling calls that’s causing them to not produce the results in their own mind. They’re committed, it’s just that there’s all this stuff that they have to do that negates coaching.
Nathalie: So can you cancel them out? I see that a lot – I really am an expert in my field. I’m not putting out my ego, I’m just saying true facts. Thousands of deals, 30 years. We can call ourselves an expert, we have the right to. And then there’s times where people are like “I can’t do it anymore.” They don’t wanna listen, they watched the TV shows and think they know what they’re doing “But they want me to put this time and time and I don’t wanna do it anymore.” You know that feeling? But maybe that’s where you were with those transactions where you had to sue [inaudible]. Maybe it’s part of ourselves listening to our spirit going “It’s time!” I just figure it needs permission like “Yes! Move on to the other thing!” It’s really hard to do both but I think – lots of times I question myself because of my years of experience. You know how like when you’re young and you don’t know and you’re ready to take on the world and thank god you do, because you’re not afraid. It’s like a child, you don’t have that fear factor. And after you’ve been kicked around a little bit, years later you go “Wait a minute! I don’t wanna do that part anymore!” I do think that this industry, whether it’s residential or commercial, it takes a certain mindset of a person to be able to deal well with people. Cause I’ve seen it years ago that the commercial has so much more business, you’re not getting the emotions! But I’ve seen a lot of the emotion side in commercial just because you’re still dealing with humans and with big money, depending on the deal. So it’s an interesting take but I think that the younger ones may still have that desire that we may not have after years. And sometimes I think “Let me give my gift to the younger ones so they’re loving this.”
Jim Gillespie: One of my best friends who I met right after I got into commercial brokerage back in 1979 he said to me “In my opinion, commission sales is a young person’s game.” When you see people trying to get into it for the first time in their 40’s and beyond sometimes it’s just too overwhelming whereas when you’re young you’ve got the whole future and you’re willing to put up with stuff but if you start in your 40’s it’s hard to find people who get into commission sales at that age who really make it happen because usually it’s such a shock to the system with the abuse that you have to put up with and no guarantee –
Nathalie: I can’t take it anymore the same way! No, I just totally relate! It’s just like – it’s pretty amazing sometimes. We used to have a saying years ago when I got in the business [inaudible]. It’s just so different. And with technology now – we have about 5 minutes left of this show right now so it goes by pretty fast. With technology, I love the internet side of it, where you can travel and still negotiate and take your expertize through that. Video in commercial – in residential it definitely sticks. Is using video in commercial helpful to real estate brokers?
Jim Gillespie: Hugely! And again, this speak to the trying to find that commercial broker who just says “I wanna do this and embrace the opportunity here” because people want to see short videos and when they’re watching you, the expert, giving them tips, it’s like you’re in front of their office, having face to face with them in their home. You’re branding yourself in their face over and over again. And here’s something really important that most people don’t realize right now, ok? Google now owns YouTube. So what happens now is when you have a video on a particular subject – let’s say you’re working in LA. Let’s say that’s a keyword search term. When you record your instructional videos and you set them up with those keywords, google is really giving assistance in ranking up these videos in the ranking because they would rather have people click on that and send them to their own site that they own than a third party commercial brokerage website. So now you can really get assistance –
Nathalie: I wanna ask you something but we don’t have much time! So when I’m saying video I’m thinking like the properties that they can see them. You’re saying marketing videos, they need to make the small videos too, not just “We’re marketing the property and ourselves.”
Jim Gillespie: Again, branding themselves into peoples’ minds so that when they’re ready to do something, they go “That guy, I’ve watched 20 of his videos, he knows what he’s talking about. We’re going with him!”
Nathalie: Ok. I love it! We gotta have you back! What’s the difference between the top producing brokers and the others? Is it that they follow the system, they take your coaching for example, they learn what to do? They prospect – is that the difference, that they’re running it like a business? I’m asking the questions and I’m giving the answers but I want your expert opinion on that.
Jim Gillespie: Ok, the top commercial brokers are hungry and they want it more than everybody else does, ok? They’re willing to do whatever it takes. Some people might not take it well when they get rejected, top commercial broker knocks it aside, picks up the phone, calls somebody else and they don’t let anything stand in their way or bring them down. They’re determined that they’re gonna make things happen in a big way and nothing is gonna stand in their way.
Nathalie: I remember years ago when no means yes! They don’t let rejection stop it.
Jim Gillespie: They say that one in 10 prospecting calls can possibly lead to something. You gotta be able to let the other nine rejections bounce right off you, knowing that you’re this diamond in the rough and you will convert into great business for yourself.
Nathalie: Oh I love it! You know what? Can we hear your website too? Cause it’s commercialrealestatecoach.com?
Jim Gillespie: You got it!
Nathalie: Ok this is Jim Gillespie, America’s premier commercial real estate coach. Over 35 years of experience. Jim, you make this part sound fun and maybe that’s the key, to have everybody be in the parts that they can expand the most. And so we’ve got about 45 seconds left, I hope we can get you back on the show. What’s your parting words? Anything you wanna say to somebody if they’re looking to get into commercial real estate and need training?
Jim Gillespie: Yeah, basically this. Whether you’re new or an experienced person in the business, if you know you’re capable to the next level, you can feel it but you’re not getting there and you’re struggling up against it, if you work with a coach, this person will help you break through those barriers to get to that next level of productivity that you can’t see right now. So embrace the accountability! Plus it will be great! You’ll love having that big brother or sister on your shoulders helping you out and guiding you through the tough spots.
Nathalie: Amen! I definitely think that’s so needed. So it was so great having you on! I hope you’ll come back! And we’re getting ready to sign off. You’ll come back, right? You didn’t say anything. You just sat there.
Jim Gillespie: Yeah!
Nathalie: I’m just kidding.
Jim Gillespie: I knew you were tight on time and I didn’t want to interrupt.
Nathalie: I’m teasing you! But thank you, Jim! And we look forward to it again. And to everybody out there, I wish you peace!
Randy: Thank you for joining us on REALTY UNIVERSAL, Inc. Radio! Our hope is that you were enlightened, encouraged and mobilized to be an agent of change. REALTY UNIVERSAL, Inc. is on Facebook, join us there. Follow us also on Twitter@REALTY UNIVERSAL, Inc.. And for more information, you can go to RealtyUniversal.com. Make it a great day!