My Start in Real Estate

[Don Konipol]

My Start in Real Estate

46 years ago I decided to switch “careers” and left international banking and became a licensed real estate broker. I was interested in commercial and investment property, so joined a mid size commercial brokerage as a broker - associate.

Most brokers/agents at that time, even more so than today, did not “specialize’, at least with very specific parameters. All the other brokers/agents at the firm represented buyers or sellers, any type of commercial or investment property, leases, landlords, tenants, in other words anything that “walked in the door”. I decided that quick success would require a totally different approach.

So, I took the required courses and passed the Texas Brokers exam. In the meantime I read every book I could find on commercial real estate; attended every commercial real estate meeting in the Houston area, and spoke to numerous commercial brokers. It was at this point that I decided on a strategy which would provide a platform for fast success.

When new commercial brokers enter the industry, they are told that the first commission may take 6 months to 2 years. I was determined to build my real estate business a lot quicker, with a lot more sustainability, and a lot less commitment to the tedious work most thought was required.

So, here’s what I decided to do. I decided to SPECIALIZE, to the EXCLUSION of everything else, one ONE PROPERTY TYPE, in ONE GEOGRAPHICAL AREA. My research revealed that there was no broker specializing in automotive repair facilities in the Houston metropolitan area, so I decided to become known as the “go to” source for automotive facilities. I then followed the following steps to “success”. Remember, this was a long time before we had use of the internet or anything else we think of as “technology” today

1. I had business cards printed identifying myself as a commercial broker specializing in automotive properties

2. I talked the brokerage into paying for an ad in the Houston Business Journal announcing that I, a “specialist” in automotive properties had joined the brokerage. I personally paid for similar ads in the local Houston newspapers, and regional edition of the Wall Street Journal.

3. I read everything I could about automotive facilities; spoke with brokers who had been involved in transactions in these type properties, and attended meetings, conferences, and joined associations of automotive repair shop owners

4. I joined a number of commercial real estate associations, attended their member meetings, and introduced myself as “the automotive property specialist”.

5. I placed classified ads in automotive repair shop trade journals, announcing by services.

6. I did NOT take “floor time” and I arranged to forward any buyers, sellers, tenant or landlord leads I received that were not related to automotive properties to other brokers in exchange for them forwarding their automotive property leads to me.

After about 30 days in, I received a call from the owner/operator of 5 auto repair facilities. He wanted to either sell both the business and property or just the real property and do a sale lease back. He had seen my ad in the Houston Business Journal, previously had no success with a commercial broker "generalist" and wanted someone with my "specialist skills" to handle the sale. I listed the properties, and over the course of 4 months sold 4 of the 5 utilizing the contacts I made at interacting with automotive shop owners. The 5th one I was able to talk the owner into providing owner financing, and using personal credit cards for the down payment, I purchased the property myself and did a sale lease back with the owner. However, the lease back was for only 60% of the space. I rented the other 40% to a complimentary auto business, and was able to obtain a 20% annual ROI.

This lead to 3 years of very profitable success as a real estate broker, until having made some highly profitable deals I decided to quit the real estate “business” and concentrate on “investing” full time.

Biggest “TAKEAWAY”: Most business owners and most sales people have a hard time turning down ANY piece of business. BUT, when you “accept” business that has low profitability, takes an inordinate amount of time, is outside your area of expertise, or does not add to your reputation for expertise, you’re replacing highly profitable business that does add to your reputation as an expert and leads to more profitable business. This is because instead of developing the highly targeted profitable sales, you’re spending your time servicing the marginal. If your goal is to fill your calendar with just ANY business, then you should expect nothing more than mediocre results. To achieve outstanding results, you need to develop PREMIUM business, customers that will pay a premium for your services. The way to do this is to be seen as THE expert in Avery specialized niche.