36: Effective Hustle With Chris Okada

Welcome. This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn about the world of commercial real estate and find out why it is one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson. Welcome everyone to show number 36 of real estate Investing Live from New York. This is your host, James Nelson and it looks like we have done this. It only took us three dozen shows to get there, but we are now at any minute going to be surpassing 50,000 downloads. So thank you, thank you. Thank you everyone for your support and for sharing this with your friends and tuning in on itunes, Spotify, wherever you get your podcasts. And I love your comments, your ratings, please keep them coming. On today's show we are interviewing Chris Okada. I've known Chris for a really long time. He's a great guy and he is a real go getter. He's really active in the social media space too and he's got a great story of going from broker to principal. And then back with us we have Lisa Flicker and Neta Levy from Rhodes Associates doing a follow up to last week's session on how to navigate this job market. Some useful tips for employers too. So please tune in and once again, thank you everyone. We're going to have a quick word from our sponsor and we'll get right into that interview with Chris.

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And now it's time for our investor spotlight. And with us today we have my friend Chris Okada who is a prolific dealmaker, entrepreneur and CEO of Okada and Company, a full service commercial real estate brokerage and investment company in New York City. He rose the distinction during the financial crisis of 2009 and its recovery by using the markets lower state to Transact in nearly $1 billion in commercial real estate sales and leasing. In 2011, Chris founded the Okada Acquisition Company to begin acquiring office, retail and multifamily properties in Manhattan. Chris is an avid blogger, speaker and thought leader. He's been a source for the Wall Street Journal, the New York Times, the Post, et cetera, and also gives back. He's a long term volunteer and advocate of youth programs assisting children in Queens, including Our lady of Lourdes Roman Catholic School and more recently the River Oak. Excuse me, the River Fund, New York. Chris, great to see you. Thank you so much.

Hey James, how are you? What a great intro. Yeah, you know, you got quite a.

Story, so we're looking forward to hearing it and maybe tell us where it all started. Where did you grow up?

Well, I am a native New Yorker. I grew up in Forest Hills in Queens and was born and raised here. And my family's been in real estate since 1969. So, you know, I'm a second gen commercial real estate guy. And it all started I went to school, I went to college, graduated college, but I graduated in 2002. And right after 9 11, right around the holidays in the year before you graduate, they tell you, all right, go start looking. And 911 had happened. And so my entry into the workforce was probably 60 days after 911 and I couldn't even get an interview. And I studied finance and I really wanted to get into the world of banking and starting as an analyst and work my way up in investment banking. That was really, I had the whole path planned out at 21, 22 years old, and none of it even came close. My father had a commercial real estate company, said get your license and come aboard. And that's kind of how it all started.

So growing up, did you. So your family was in the business. Your father had a brokerage firm or was he investing in properties as well?

He was an office and commercial leasing broker. He really did well in the 1980s and the 70s where there was not a lot of globalization. So my father was the bridge to bring then the emerging Japanese manufacturers to America. So he represented Toyota Motor Co. In their first U.S. headquarters at Sheldon Solo's, 9 W. 57th St. And the same goes for Panasonic and Sony. So he was a big tenant rep and these were very large transactions and he had a monopoly on that because there were no Japanese speaking commercial real estate professionals and there was no Internet and everything was done by fax machine and by telephone and mail. So and that's kind of. And my mom did the residential for the CEOs of all the Fortune 500 Japanese manufacturers and she would find their corporate homes and work with the families of these corporations. So that was my background.

So in high school or before that, were you helping out around the office? Did they ever have you do anything for them? And if so, what was that like?

Yeah, yeah. Yes. So my mom was at Douglas Element. This is her 40. She should, she's gonna retire now. I think she should retire now. But she's been there over 40 years at Douglas Elliman when it was a boutique shop and I never worked there, but I did work for my father and he really my jobs were, you know, sorting out the. Back then what they used to do would take real estate articles from the Wall Street Journal and New York Times and they would create a library of just information, Real Estate Weekly, anything relating to commercial real estate. My job was to find those articles, cut them out and put them and sort them out and have a library on a.

So you're the first version of Google. It's all in your mind, right? Except with a pair of scissors and a scrap.

Yeah, but you know, that's, that was my. I'm sorry.

I said you might have been a little slower than Google.

Much slower, much slower, much less efficient.

But you know the inefficiencies you hear about in the market decades ago when people didn't know who owned properties and where tenants were located, that inside information was everything. So you have this experience in the office and I don't know if you had any other jobs outside of that. But you didn't just presume that you're going to go right back into real estate. What was it? Did you want to spread your wings?

Why? I definitely, it was A. After 9, 11, I said, well, worst case scenario, I'll go, you know, in a real estate.

All right, so back to the story. So you can't find a job, so then what do you do?

So my father said, you know what, right after school, want you to, you know, get your real estate license. Got it. And then just started in office leasing in the Plaza district. And my job back then was to try to find small, medium sized businesses and large businesses all within the, you know, the Park Avenue, Fifth Avenue, Madison Avenues in the 50s. And that was extremely difficult. You know, that was, I thought it was the hardest thing to do as.

Far as.

You know, business development, finding a CEO. And I'm 22 years old, so it was just a lot of grind Work for a young guy. But I was given the tools to do that. And for me, you know, that specialty sort of spun into. I did a couple of small leases, barely made any money. But then what that started what I started reaching out to. And the people that were more welcoming were the restaurant owners in the East 50s. Not necessarily Fifth Avenue or Madison or park, but Lex, Third and Second Avenue. And those mom and pops were very, very good, very nice. And then started working with them and really just the East 50s. And I get a call from a landlord and said, you know, do you rent? Do you rent space? And I got my first exclusive. I don't know, it was an old agent that was no longer at the firm. And, you know, the phone rang and, you know, I told the secretary, I'll take it. And, you know, I had nothing going on, I'll take it. And I had my first office exclusive in a small building on 47th street off Lex. And it's really a second floor retail space, if you will, but. And that winning that thousand square foot exclusive and then renting, it was the world. And then shortly thereafter, he said, you know, I want to sell. And he didn't tell me that he was ill, that he was sick, because he was a very tough Greek gentleman. Very nice, but very firm, very tough, old school. And he gave me the exclusive to sell it. It took me a long time, but.

You never sold a building before.

Never sold a building, lied. Yes, I know what to do. I know exactly.

I'm thinking of. Was it spies Like Us when Chevy Chase goes into the operating room, you.

Know, doctor, doctor, you know, I love Chasing Chevy Chase. I didn't see that movie, though. I gotta check it out. And so I got my first investment sales exclusive. But he wouldn't give me. He wouldn't sign the commission agreement. I said, you got to sign the agreement, you know, for law. And he's like, I don't believe in that. We did it before. You have the exclusive. I'm not signing anything. If you want to work on it, let me know. And then I sold that. And I remember being about a year, year and a half in the industry when I sold it. And there was no greater feeling that I ever felt than closing. And it was for $2.38 million. A very strange number, but I'll never forget it. And that right there, that closing of that. And it was a 6% commission that I split with, so. But being 23, 24, you got paid.

I was a little nervous for you. You said, no agreement, you Know, first time doing this, but you got paid.

Yeah, I mean, unfortunately, while we were in contract, he passed away and his kids took over and they asked me, what was the commission? Where's the agreement? I was like, he didn't want to give me agreement, but he agreed to 6%. And they, and they. And he did, he did, you know, and they were on your way.

So this is still like 2000, what, 3004?

Yeah.

So fast forward, you know, 2008, 2009. So you started your career right after, you know, 9, 11, everything froze up. Now we're going right into, you know, Lean Brothers, Bear Spurts Collapse. You know, the financial markets get flipped on its head. So, you know, shortly thereafter, if I'm not mistaken, this is when you decide to launch your investment company. So had you already been thinking about doing deals before when you were brokering, were you kind of investing along the side? When did you do your first real investment?

So all throughout 08.09, I was invested in the stock market and it was very whipsaw. I thought I was a smart equities trader because, you know, buying a stock and selling it, you could do it in two seconds. Anyone can do it. And so I thought, you know what, this is a great chance. And I went for the high risk, high reward, and it didn't work out. Well, you know, I don't have a good track record with the stock market, but I started. My background is office tenant representation. And we do a big volume of business and landlord representation of office and retail. We have a big, you know, a big volume business in that world in really in the West 30s and West 20s. And that, you know, that business stopped in 2008. The phones just died. No one was moving, no one was doing anything. You know, it's sort of like a huge bomb goes off and people are just stuck. Landlords don't want to make decisions. Tenant landlords want their spaces filled, but rents are coming down. And I knew I needed to shift my focus. And a good friend of mine, he was working at a bank and he goes, you know, you should get into distressed debt. We're going to be, you know, it's bad out there. And in order for banks to pass the stress tests, because back then all the banks had to undergo a stress test because banks were failing all the time. In order to do that and pass it, they had to, no matter what the loss was, they had to clean up their books. And so that's why there was a lot of outward selling of, of debt regardless, because of Bailouts because of stress tests. So I jumped in and I stuck to my neighborhood, which is Herald Square, Times Square and Chelsea. And that's when I started doing distressed, you know, real estate sales alongside. Then the office came back and the retail sort of came back. But all the people that I sold these deals to within a year in 2000, all the deals I sold in 2009, by late 2010, their values had already increased 20%. Because we're talking rock bottom in 09. And same goes for 2010. By 2011, I sold one deal and we mentioned this Stanley Shearer and sold them a big property. It was a $500 million deal that Dubai, the country had a fund and they wanted to develop this hotel and they spent 500 million on it. Lehman Brothers had 400 million of mortgage on it. And we sold that mortgage for 217 million to the Shiras and Highgate. And they were backed by Walton Street Capital and they got funding from Goldman. And a year later, in 2011, I see Stanley Shira and he basically, and I see him in the lobby of a Fifth Avenue office building and I Stanley, how's it going? How's 1466? And, you know, rest his soul, he passed away, you know, a few weeks ago. And he basically tells me, I made a quarter billion dollars, it had only been 12 months. And he spot that $217 million piece, converted the upstairs, created a business plan, created another business plan, and he just exited at 500 million. And that's when I knew right there and then I said, you know, because income is extremely important. Income is everything. Cash flow, income, commissions, it's extremely important. But, you know, in order to get to a different level, you're going to want to think differently as well. And that's when I started thinking about investing and my first investment.

Yeah, before you get to that, I mean, some brokers think about, well, maybe I'll put in my fees. Like, did you. I mean, I'm sure you wish. She went in with Stanley Tierra. I mean, did you say, I'm gonna do it on my own?

It never crossed my mind because in that transaction, all transactions, I'm very involved in every aspect of the sale, from the letter of intent, negotiations to the contract, and then making sure that pieces come together for the closing that deal. They signed a commission agreement and told me, kris, we have it hang out, we're gonna take care of it. And they gave me a commission agreement agreement. No matter what, I was gonna get paid as a buyer rep of all things. They that I've never had a buyer rep agreement. I've only had one. And it was on a Lehman brother, you know, 60% off debt deal. So after that they said, we have it. So in that case, there wasn't a thought process. It was for a $200 million sale. There's a big part of you that's just praying because, you know, holding, retaining a piece of that was not in my psyche because I wanted the commission, you know, and I needed the money. I wanted the money. And so that was in a thought process. In any of Those times, in 0809 and 2010.

You were building up your reserve. So now we have to. So now you move on to your first investment. And this is 2011 now.

Yep, in 2011, we did stop and shop is a supermarket and they had a 10% capitalization rate sale, leaseback program all throughout Connecticut and all throughout Vermont. And there were about 10 of them in a package at a 10 cap. And I said, 10 cap? You can't. I've never heard such a thing, you know, because we're such New Yorkers. And I really don't, I really pay, you know, microeconomics, sort of. That's how I operate all throughout New England. It was a 10 cap. And I like, you know, stop and shop. So I invested as an lp. It was a small amount. That was my first foray into investing in real estate. And it was just a coupon clipper. But it was important for me as a first step to go through the partnership agreements and go through that exercise. And, you know, and now, you know, I still, we still own it, but now let's see, with everything going on, let's see how, how we shake up in the next year or two.

Well, I know the grocery stores are still open and doing a lot of business. So from there, you know, so you're an lp. When did you finally switch over to the gp? What was the first deal where you said, I'm going to take this down myself or with part partners?

So after the Stanley Shira meeting back in 09, 09 and 2010, it was really. The larger deals, it was, it's really skewed. The larger deals were getting much larger discounts than the middle market. I'm a middle market guy, you know, 5 million, 10 million, up to 50 million. I mean, that's really, you know, where most of my career was. But that's not where the discounts were. The discounts were over 50 million. The 50 to 100, 200, 300 million dollar transactions that's where you saw 60% off, you know, in the smaller deals, you know, and I remember we, I interviewed you once and you. Sometimes you got the lenders exactly what they were owed, you know, you got 100%. But back then. So my first deal was a deal, it was a land lease and it was 120,000 square feet on 34th between 5th and 6th. And I had just done a deal with that landlord, which is Saul Goldman Investments and Solo Management. And I did a retail deal with them. I did another, another office lease with them as the tenant. And they said, you know, what about this building? And I took a look at it and I knew that was going to be my first deal. And I kept it close. I was analyzing it, trying to figure it out. And the first person I brought it to was a good friend of mine. He's in Rebny. He's all over the place in Rebny. Ira Fishman. I call Ira Ira. You know, you're a rep in this building. What do you. It really started from a generic regular phone call. But he was, I was telling him all the stuff I was doing in the neighborhood. I sold 900 66th Avenue, 60% off, which is on the corner of 35th and 6th. I sold 1466 Broadway, which is on 42nd and Broadway. All in the, all in his territory. All. He owns about 15, 16 buildings in that area. And you know, and he's like, I'll take it. Those are his words. I'll take it, Chris, I want it. I said, whoa, whoa, whoa, not so fast. You know, I'm putting this deal together and he goes, just show it to me. You know, he's the older Jewish American.

And he's a great guy. He's a trustworthy guy. I'm sure when you sent that to him, you didn't think he was going.

To just run off of it.

I'm sure, sure you figured he'd do the right thing.

Yeah, he did. You know, I took a shot. I didn't really know him that well. I knew his former partner who had passed away years, you know, I think it was years prior. And you know, he was a well known guy and his portfolio was well known, you know, but a large portfolio doesn't necessarily mean you're gonna, you know, give them the best deal, you know, if you're gonna acquire it. So. But I took a shot and we met and we hung out a lot. We spent a lot of time together. And then I said, all right, let's, let's do this. And really we did the fundraising. But he wound up, he wound up really taking, you know, he took control of the wheel. He goes, kris, I don't like any other deal out there, but I really like this deal. And this was over now over a couple of months for our listeners.

And this is interesting because we talk a lot about sales, purchases, outright purchases, but this was a, you did a long term lease. You did a leasehold. So you went to this family that owned it and this is what they do, they don't sell properties.

They.

And you said, we're gonna lease it, we'd like to lease it, the whole building. For how long? Was it, 49 years?

Yeah, it was 49 years.

Usually it's 49 or 99. I guess if you go over 49, you pay transfer taxes. So I guess they wanted to keep it there. But you now become the master tenant and the retailers now pay rent to you. And I guess your business plan, because I walked the building, you did a great job, was to reposition the office. So. Yeah, like what kind of, what's the metric there? Like, what did you solve for? I mean, once it was fully leased up, did you like tell us about the metrics?

So for land leases, the most efficient way, not the most. There's many ways to do it. But in this instance, there was still a liquidity shortage in the debt market. So whenever there's a time in the market where banks aren't so friendly to lend, you can't just walk into the bank. You really have to work very hard to borrow money. And that's how most real estate transactions are. However, in this instance, we went all cash. The entire cost of repositioning and the, you know, we really went in depth as far as what needs to get done and we created an entire budget and we went in all cash.

How much for the entire renovation? What was the all in?

Well, the leasing, renovation, management, it was somewhere around the 15, 16 million dollar range.

So renovating 120,000 square foot building, all the lease up costs were like 15, $16 million. So you had to raise that amount of money and then you have it leased up and you're obviously paying ground rent at this point, but clearly the rents that you're achieving now are well in excess of what you're paying the landlord. So that's, I guess the equation, 15, $16 million. And then you compare that to the cash flow that you're receiving and I guess that that's your return on equity.

Correct? Yeah, it was pretty healthy without divulging too much information because my partners would kill me. But you know, it was, it was a good deal. And you know, for people that want to get started, a leasehold position, as long as it's long term, is not necessarily a bad way to go to get, you know, you know, if you're, if you want to take over a big property but don't need to necessarily pay the entire market cost of it, which is a sale, you could do it fractionally for a leasehold, you don't own it. There's a lot of risk involved. If you sneeze wrong or if you have a bad landlord, landowner, they can, you know, throw you into fall, take over the building, you know, so there's still a lot of risk because essentially you're just a tenant.

Yeah. So from there, so that works out and I mean I would imagine raising 15, 16 million dollars. It help have experienced partners. So, you know, for your next deal, which I think was a luxury ground up development on West 52nd Street. So here you've gone from office to now ground up residential.

Yeah.

So did you find that opportunity and then bringing.

So actually the property was, it was a brand new rental. So we didn't do the ground up. It was a brand new rental. It worked out in my opinion on the capital. I really look at the capitalization rate and that sort of thing. But I had a partner that was introduced to me from my bank and my lender and basically they showed me this will be worth A property, 42 million. It was 60,000 square feet. And my partners, the people that I brought it to were basically like, oh, It'll be worth 80, it'll be worth $80 million in 15 to 20 years. That's what they thought. And I said, well, the cap rate and the cash flow and all this, and they go, Chris, you brought us the deal and you, you know, let's do it.

So what was the cap rate at the time? Do you know?

I thought it was, it was going to be a four and a quarter, four and a half percent.

So you think, all right, well I'm going to buy it four and a quarter, four and a half. But this partner that your bank introduced you to just says, well, hey, double in the future.

So that's the kind of old school thinking some people have. If you have money, you're like, wow, it'll be worth 80. But then looking further into the marketplace, we decided, you know, there's a 50% delta between the price that we paid 42 and the sellout. If we were to convert it to condos. And actually yesterday was, or, I'm sorry, today is a three year anniversary of when we sold out, officially Earth day today. And yeah, so that was interesting.

I'm just running the quick numbers on that. I mean, so if you bought it at $677 a foot, and that's on the gross square footage, when you sell apartments, you sell it on the interior, on the net, just adding 20%, let's say you were into it for like 800 bucks per day.

Actually. There was a gym, there was a lap. So our net numbers were $1,000 a foot net.

What did you sell the condos for?

The bet was can we average 1550? And with closing costs, you know, let's just say we should be able to net fifth, you know, 50%. And why wait 20 years for 80 million if we can make 20 million in two years? Obviously, the plan didn't go accordingly, you know, because even though the numbers work out, the market, market is really truly what dictates it. And I have to say, we launched in October of 2014, and in six months we sold over 60%. But the remaining 40% took us over two years, two and a half years to sell because a lot of condominium inventory came to Manhattan and today it's, you know, just absolutely flooded.

So I'm glad you brought that up. I mean, sometimes it sounds so easy, but timing is such a big piece to it. And at the time, you know, hey, we're paying a thousand in that foot. Condos are selling for 1500. What could possibly go wrong? But, you know, things change. And I would imagine the longer things, you know, the longer the time goes, you know, your returns start diminished. But I guess at least with 60% sold, were you at least able to pay off your lenders and yeah, so we owned it.

We pretty much owned that debt free. But then the operating costs, because even though, you know, it's a 55 unit building, we sort of catered it. They still needed doorman, they still needed a full staff. And the running and operating costs, including the real estate tax, exactly what you said, diminished our monthly returns. And, you know, running a building like that is about 25 to $30 a foot. So that really adds up. And so we're sort of paying for 40% of the building. You know, we paid off the debt when we hit 70%.

I know that you've been acquiring retail properties, kind of returning to your roots in Midtown, some restaurant properties, and with this crisis, all the businesses are shut. So I thought it'd be really helpful for our listeners to hear, you know, how you've been getting on top of this, how you message with investors, because again, you've done a really good job, I know, of informing people what's going on, talking through these situations. So. And maybe it doesn't even have to be a crisis. Maybe your tenant just goes dark. So what have you been doing in that circumstance?

So in this case, yes, communication is absolute key. You're going to want to be very communicative with the tenants, with your investors, with the banks, and everyone is in this together. In a crisis like this, when it's an isolated situation where the, where a restaurant defaults, they can't pay rent, it's a very different scenario. But in this case, having a conservative business plan really helped us out. And having. Meaning that, how much Runway, how many months can you last without, you know, having income? And that was the. That's sort of the name of the game that we have in any crisis. And we have a crisis every seven to ten years. Crisis management and preparation. Having the right insurance. If we had a business interruption, we have business interruption insurance on one of our properties, but it doesn't cover a governmental or pandemic. It's only property level. So all of my business interruption insurance from now on is going to cover a lot more. And it may be a little bit. It may be a little bit more on a monthly basis. However, you really got to think about in times like this, when liquidity, $100,000 really feels like $500,000 and $100,000 could feel in a drought, in a liquidity crisis, which we're not necessarily there yet, but it's not off the table. $100,000 will feel like a million dollars, and a million dollars will feel like 5 million in times of liquidity crisis. And that's why to have Runway is probably the more important thing. But you just got to do the best that you can with things that you can control. The current pandemic that we're undergoing, it's such a. It's a black swan. You never, ever, ever would have imagined it. You never saw it coming. It's like 9, 11. You don't see it coming. You don't know. So you just have to do the best you can before, during, and after. And then the lessons have to be learned. And then you look at all the risk. Fire, tenant going out, construction risk, you know, natural disasters, pandemics, now terrorist attacks. And you, you like the Boy Scouts.

So much to talk about. It's Crazy. You're prepared. So hopefully you still sleep well at night, though. I mean, I know kind of going from the brokerage side to the investor side and the brokerage, you know, you make your commission and life goes on. But obviously, when you have skin in the game, you know, it's a whole nother level. So, Chris, this has been an awesome talk. Just as a closing question, would love to hear. A lot of our investors listeners are aspiring investors, and what advice would you give to them to get started?

Come up with a strategy. You need a strategy first, a specific strategy. Is it single homes that you want to build? Is it multifamily that you want to build? Is it, you know, a neighborhood that you want to focus on and grow in that neighborhood because you feel like there's, there's a chance that the neighborhood would improve? So think about a strategy first and then implement it with different investors, lenders. And you could start out small, too, as a limited partner and. But that's kind of it. You got to do a lot of homework and you got to bang on a lot of doors for any one deal that we acquire. We haven't acquired in five years. But I'm gonna do whatever it takes moving forward. You know, opportunities are certainly gonna come around, but. And then surround yourself with people that are already doing it and by osmosis and by questioning and speaking to people, you'll, you'll get, you know, you'll get inspired. And that knowledge is the gateway.

Chris, this has been awesome. And I know you jumped into the business right after a crisis brokerage side, and then you started investing right after another financial collapse. So trying to find the opportunities in very challenging times. I have no doubt that in this next cycle, you're going to do whatever it takes to succeed. So thank you for joining us today.

Thank you.

And this is your host, James Nelson of Real Estate Investing Live from New York. We're going to have a quick break from our sponsors and we'll be right back. Welcome back. This is James Nelson, your host of Real Estate Investing Live from New York. And back with us today from Rhodes Real Estate Associates, excuse me, Rhode Associates, is Lisa Flicker, senior principal, Anita Levy, who is partner. They are organizational consultants and an executive search firm focused on exclusively real estate. So welcome back. Thank you so much for joining.

Thank you for having us back.

Thank you.

Great.

Yeah.

So we had a really great discussion last week about really for those getting into the real estate business, either in college or maybe changing from another career without the experience. So now what I'd love to do is to talk about kind of midway or a couple years into someone's career. And a lot of our listeners are aspiring investors. They're looking how to get into the investment arena. So really appreciate your all coming back. I guess the question is, and let's assume that the entry point is that someone already has some real estate experience. Maybe it's a real estate broker, maybe it's someone who has two years experience, maybe they're an architect, they've had some exposure to real estate, but they want to make a move and they want to get into the principal route. So what would you all say to someone who does not have experience per se working with a principal but has some background? How would you advise them to find an opportunity?

Lisa, you want to take that one?

Absolutely. Well, you know, it's interesting because I'm working on something very similar right now with somebody and one of the things that we've kind of gone through on the last podcast was the NETWORKING and the LinkedIn. And I think those are the absolute foundations of this, that the person needs to make sure they're reaching out to their network, reaching out to their alumni associations, digging in deep. Because a lot of those types of opportunities don't come necessarily through an executive search firm, but will come through their own connections. I think some of the things that people can do to help themselves would be to take a look at a job posting and you know, we can help you with this, or this could be something that you could probably maybe pull off of a job board and get a feel for what is it that somebody is doing at that principal shop. So if you're applying to a principal shop and one of the things that they're doing is acquisitions, let's say they're reviewing financial models and they're meeting with brokers and they're doing certain things to originate sales. I think that speaking to on your resume, what you've done, that could add value to that process both from two points of view. Number one, speaking to that because people want to hear that and that will help you to get a foot in the door. But I think also to the extent that your resume is on any of these job boards or on LinkedIn, people will pick up those keywords. And so I've helped some people mid career who are kind of looking to shift from one part of real estate to another. And I said, well, nobody is ever going to find your resume if it just has a few keywords in it and none of them are relevant to the job that you want. So I think looking forward in your career and thinking about what skills you have and highlighting those on your resume and on your LinkedIn profile will be very valuable.

The other thing I can add to that, if you're actually changing sectors or industries or disciplines, sorry, not industries like you know, if you're going from architecture, obviously you have the design and some insight into development. Or if you're in brokerage, you, you probably have the numbers because you're doing underwriting depending on what role you're pursuing. On the principal side, you know, together with the transferable skills and the experience that of what you've already acquired, you can add to that by additional education where the gaps are. Right. So there are a number of institutions across the country that provide either a master's or a certificate or even one off courses that who would be helpful. And I know that there's also some online options. So the bottom line is even at a mid level, the skills that are required that are critical to a position, they have to number one, be transferable and also either be there or be able to be acquired to add and to be qualified to be considered for that.

Perfect.

And I remember when I sat in on one of the sessions that you did for a mentorship program, you talked about the do's and don'ts of resumes. So I wish we had more time to get into that because some fascinating stuff there. But I would imagine the resume is also not the end all be all. I mean we get dozens and dozens of resumes every month and I guess we try to give some type of form response. But is it fair to say that following up with whether it's a personal phone call or trying to link in with someone or connect is probably really the only way to get an in. And I'll get your answer to that. And then I'm going to share a tip that I've heard from one of my friends, Ryan Serhant, on how he handles resumes. So go ahead and answer that and I'll tell you how Ryan does it.

It can.

I'm gonna. Can I add one thing quickly? I think that for somebody who's done that, getting more important than linking in, more important than, you know, following up is a personal recommendation. So if you have worked for somebody, let's say you're a broker and you've worked for somebody who's well respected in your organization and has a connection with that principal side and that's where you want to move to. I think that having somebody make that phone call for you carries the most weight that anything. So I think to the extent, and that's why I always say, you know what, be respectful of everyone because you don't know where your next referral is going to come from. And I really think that the key is if you could somehow connect with the hiring manager vis a vis somebody in the industry that's respected, that will open so many doors.

That's a really fantastic point. So nada. You want to talk about how, let's say even you've had your interview, you've met with the person. How about the follow up? Is it a thank you? Is it finding someone who knows that person who can also put in a good word, what's the best way to cement your chances?

There's a couple of things obviously. So there's two categories. It's number one, to secure the interview, which Lisa spoke about. So once you're in the interview, you have to be prepared. You have to have done your research on the company, on the role, what are their needs and you know, inside and out and have gone to your network to get insight into the organization so that when you're at the interview you are knocking it out of the ballpark. And by that I mean obviously your resume was in a shape where it got you into the door, right? So now it's that interpersonal connection as well as being able to position yourself through the answers and the questions that you're asking to communicate your number one qualifications, your thoughtfulness, your analytical skills, all of those things are just wrapped up in the answers that are given as well as the questions that are asked. And they have to be thoughtful and meaningful. So preparation is key and critical. And now so you finish the interview, obviously you thank them and yes, absolutely, send a thank you note. If you don't have their email, send it on LinkedIn. Ask whoever your connection is. Can you share me the email of the person I just interviewed with? Even if it's a LinkedIn message or an email? Lisa and I often say people don't send handwritten thank you notes anymore. Do that. I mean, you stand out, right? And I think beyond that, obviously there's going to be references and reference checks. And last week we talked about how your reputation follows you in the industry. So because real estate ends up being a very close knit community, your track record and what you've done and your relationships in prior organizations, people know each other, they're like, ask around, like, hey, what do you know about Netta Levy? What do you know about Lisa Flicker? They're not going to say, oh, so and so interviewed, because they're not going to exchange confidences, but just be aware of that in the performance of your day to day work and the broader work. And again, this is not to say that it's the end all, be all, but those relationships really do come in handy from work performance, leadership qualities and skills. And that will essentially make you stand out.

Perfect. So, Lisa, we only have a minute or two left, but let's talk about those references. And what if maybe one of those references might not be so good? I mean, I would assume if you're going to provide a reference that someone is going to have something good to say about you. But let's say your last employer, maybe you don't want them reaching out or maybe you're currently employed and you certainly don't want it to get back to your employer. So what would you say for that?

I would say that you would like to provide references that you think are going to say something great. I mean, if somebody provides me with a reference and then they say something, anything other than wonderful things, it makes me question what the people they wouldn't provide me with are going to say. So I definitely think that you want to be thoughtful about who you're providing as a reference. And look, it happens, right? Not everybody likes everyone. I think you want to try your best to steer away from providing those references. And to the extent that you can provide people who can kind of overshadow that, that would be a much better place to start. And I think that at the end of the day, when you're interviewing with people, if you want to put out the names of people, you should be very careful about putting out names of people that you think are going to say something positive. And I absolutely think it's appropriate to say, I don't feel comfortable with you calling my current employer because I'm employed, but I believe if you spoke with them, they would say X. And you know, X being kind of the positive side of what you've done.

And by the way, to that end, you know, it's depending on, you want to provide references that can speak in a very intelligent way about your capabilities and your skill level as it relates to that position. Right. So the folks who you're working, you've worked in those kinds of capacities, those are the folks who would be relevant. Right. Like Aunt Jenny is not, is not a relevant reference if you're applying for a development role to put a 40 story tower in the ground.

Right, well said. Well, this has been fantastic. I mean, such incredible advice. And oh yes, I did forget. So Ryan Sirhan and I had to, you know, so he is a friend. But I did have to sign up for his coaching to get this little tidbit. But I'll share it with you as long as it just stays with us and our 30,000 plus fans who listen into this show. Whenever he gets a resume, he does not respond. When that person calls him to follow up or emails him, he does not respond. He does that intentionally. Of course. They're tracking everything. They want to see tenacity and persistence. So I'm sure you all would agree that don't get down if you don't get an initial response. Stick with it. That's really the key to success as well. This has been fantastic. This is your host, James Nelson from Real Estate Investing Live from New York. Please, if you have not already, please add your comments and your ratings to itunes or Spotify. Wherever you get your podcast, tell your friends. And if you if you've not connected with me yet on social media, please do so. Amesnelson, NYC and until next week, thank you again. Thank you for tuning in this week to Real Estate Investing Live from New York. Please join your host, James Nelson for another program next Tuesday at 7pm in New York, 4pm Pacific Time on the Voice America Business Channel. Also, all shows are rebroadcast Wednesday mornings at 7:00am Eastern Time, 4:00pm Pacific Time, as well as always on demand. We'll talk again next week.