The Power of Relationships: Building A Successful Real Estate Team

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis & Young's Tri State investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now here's your host.

Welcome everyone to show number 152 of the Insider's Edge to Real Estate Investing. This is your host, James Nelson. I'm principal and head of Tri State Investment Sales for Avison Young. Sorry for a bit of a hiatus. I know we've taken the last few weeks off, but we have been working hard for a whole new season of great interviews and getting a lot of help for from Annalise who is now teeing up a lot of these introductions. We're getting a lot of different speakers and remember to email Ann A N N E james nelson.com if you post a review on Spotify, Apple, wherever. You're listening to this right now. If you email her a picture of that review plus your address, we will send you a copy of the book. I've already sent out a couple dozen of these, so it is my pleasure. You're review this show helps others spread the word. While you're at it, if you want to go to Amazon and also review the book if you haven't done that already. We're just trying to get the word out on this because this whole show is to help you gain the insider's edge to real estate investing so you can outperform the market. And so for this next two part series, I'm going to be playing an in depth interview that my friend Jeremiah Seamus did. We did this together on Twitter Spaces and now we're going to share some of these lessons. And the idea was how do you make the teachings of the book relevant to today's market? So for today's episode we're going to be talking about the power of relationships, building a successful real estate team. And we're going to delve into the world of real estate and the importance of having the right team. And we talk about building trusted relationships with specialists, finding capital relationships, cultivating an investor base, valuating properties and finding great opportunities in the real estate market. We're going to talk about the importance of finding a partner to raise, raise capital and create credibility for investors. We're also going to talk about tips on property valuations, how to find great opportunities off market, and then we're going to talk about financing options, specializing in asset classes, understanding the associated risks and trade offs, and emphasizing the need for thorough due diligence and providing tips for closing the deal on time. So a lot of information here in this episode that I know is going to really help you step up your investment game. Or if you're still thinking about diving in and making your first investment, this is really going to tell you exactly how to do this. So we're going to have a brief break from our sponsor and then we're going to get right into my interview with Jeremiah and stay tuned for next week when we're going to release the second edition of this. Thank you.

As always.

A different approach to putting our clients first. Avis and Young's Tri State Investment Sales Group sells multifamily office retail, development and specialty sales throughout the York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first, providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagram amesnelsonnyc to learn more.

All right, we're in business.

Your first Twitter space.

Sorry, I'm a little rusty, Jeremiah. I think my, my, the, the last Twitter space I did was about a, a month or two, but with everything going on the market, it seems like it's been years.

So I know there's, we could, we.

We could be, we could be doing this every day. We could be doing this three times a day and we'd find new stuff to talk about. So.

I think you're absolutely right. This market is wild. I don't know what's happening in New York. Maybe we'll get into it, but I'm sure you're seeing lots of, lots of different things happening in the market. Just, I mean even now the amount of structuring in deals that I'm seeing like you never before, like options agreements and all kinds of different, like reverse reverse mortgage. Oh, what happened? We lost him. There we go. You coming back there, James? He's back.

Somehow I got booted from co host so I, I didn't, I was hoping I didn't offend you that quickly. I was only co host for 35, you know, 3040 seconds and I was booted, so. But I'm glad you had me back. So hopefully this time you'll. You'll keep me on.

There we go. Okay, perfect. Yeah, we got. We'll wait for a few people to join and come in. We've got. A few people are coming in already here. But are you in Manhattan right now?

I am. I'm at the Evison Young New York headquarters here at 530 Fifth Avenue on the corner 45th Street.

Nice.

I can give you a weather report too, if you need one. Are you. Where are you?

I'm in 181 Bay street, downtown Toronto. Dairy. Not.

I'm actually going to Toronto. I'm gonna be there for Uli in probably. What is it? Later this, In a couple weeks. Perfect. So I don't know if you're a ULI guy, but if so, it'd be great.

Yeah, I'm actually speaking at uli, so I'll be there. So we'll definitely link up.

Yeah.

Okay, well, I guess we'll. We'll jump into it since we're recording this and while people are still joining, I always find these, like, the noon time is a little bit hit or miss for people to join anyways. Like, the best time is actually 7:38pm at night. But we'll get some more people and we'll host it up here. We'll have, we'll have a recording afterwards for your podcast. So. So welcome again, everyone. My name is Jeremiah. I run the private capital group at Colliers. I sell buildings and land. And today we have James Nelson, who's actually been a great mentor of mine. He runs the Tri State investment sales team for Avison Young in New York City or the Tri State area, I guess I should say. And you have a pretty impressive career, James. You've done, I call it 5 billion in sales and financing. You've raised 350 million for some funds and now you've written a book. And that's what we're sitting down to do today, which is awesome. So welcome, James. Thanks for coming on.

Jeremiah. Really great to be here with you. It's been awesome collaborating over the years and seeing you grow your platform and all the exciting things that you're doing up in Toronto. So my pleasure.

And so I guess, you know, as always, we will probably have a lot of Canadian listeners here until we rebroadcast it. So I'd love for you to just take us back to the beginning, how you got into commercial real estate, what you did over your career, and give us a breakdown of how you ended up here today. And now you're an author, you've written this awesome book which is just was fantastic to read, I gotta say. Like the little nuggets in this book is just great. Like I've already had a few people go out and, and buy it and really enjoyed it. So. But take us back to the beginning, tell us where it started. JAMES.

Well, I appreciate that and what I will say if we have a big contingency on from Toronto is that look, we're all seeing very similar things in the market and I think we can also learn a ton from each other figuring out, you know, topics, what to do with a lot of this empty office space. And I know residential conversions are certainly not just a hot topic in New York, but around the world. And I've even heard that, at least I've heard up in Vancouver that some of the cities in Canada are a lot further along with those discussions and government proposals to make those happen. So again, we can learn a tremendous amount from each other. So I'll give you a very quick background just so you all can get a sense of what we're doing here in New York. I've been in the business now for 25 years. Graduated from Colgate, didn't even know real estate was a thing. I'm glad I'm not looking for a job now because I see these resumes that come in and college students who already have these incredible internships and ARGUS certified for me. I was very lucky to get the opportunity started at a small firm, Massey Nackel. We sold investment properties here in New York. Really kind of small to mid size buildings, could be apartment buildings, retail, some development. We weren't really touching the big office buildings, but was just so lucky to get into the business at a great time with incredible mentors and that's a big part of my book and encouraging those who want to get into the business or step up the game is very early on, you know, find a great mentor, find people you can learn from. And Bob Nackle, Paul Massey were brilliant. They were incredible mentors. They remain mentors to me today. And they had this incredible model where they said, okay, we are going to strategically go after the city and we're going to set up a territory system. We're going to put 50 investment sale brokers throughout the city. They're going to become experts, they're going to represent owners in the sale of their properties. And when I started we had 20 people in New York. Fast forward 17 years later when we sold the company to Cushman and Wakefield for $100 million. We were doing four times the amount of sales as the next brokerage firm. Now by numbers. So Jeremiah, if you were doing four times the amount of sales is the next brokerage firm in Toronto, maybe you wouldn't be on the, you know, on this spaces right now. Maybe you would have bought an island down in the Caribbean. But I mean you can imagine. And look, I think yes, it was an incredible business model, but what it really suggests is if you have the right business plan, if you can find inefficiencies in the market, clearly no one was going after the $50 million in under space. And even today it always amazes me where 95% of the institutional capital wants $50 million plus deals and yet 95% of the transactions that sell are below 50 million. So I would imagine a lot of the people who are listening now, you know, they say, look, we're looking to play in this space. We see a lot of inefficiencies in this space and that's where the opportunities are. And that's also why a big part of the title of the book, the insider's edge is yes, you can gain the inside edge to real estate investing. Really capitalizing on inefficiencies in the market, getting great expertise, having a great business plan. So I know we're going to get into that discussion, Jeremiah, but that's, that's my story on the brokerage front as far as we can get into my investment career. Fortunately very early on was able to invest in several projects as a limited partner. Then I was a co GP in two real estate funds. We put out investments for a portfolio worth $350 million of total capitalized value. So had that experience in a lot of different investments. We invested in a couple dozen different types of properties. So have that experience as well. That was able to really bring together in this book which is really designed for all of you. You all are listening right now because I imagine you have maybe you're already invested in real estate. If not, you're thinking about getting into it and so really bringing those lessons learned to you so you can be most successful.

Yeah, that's awesome. And I couldn't agree more with the private capital space, the non institution. I mean it's why I founded the private private capital group here at Colliers. You see like all the transactions done are private. So hey, how do you, how do you find that space? So that's a great story. So you, so you effectively came out of university, you joined Massey nacal. You ended up being a partner at the firm. You sold it to Cushman. You started early on doing cogp, raising money. And what was that like when you were starting to act as a principal on that side and actually going out and buying deals? Because I'm sure that lots of that formed the learning that went into this book of actually executing on it. Because as a broker, you actually, you're very good at due diligence, finding deals on that side of this things and underwriting, but the actual execution, the operating, that probably was a huge part of what you were doing as a co GP for sure.

And I would say, first and foremost, I think a lot of the wisdom in this book is really what I've learned from observing some of my most successful clients. And these are also the lessons I've learned Through now, over 150 interviews on my podcast, which has the same name of the book. And I would really encourage you all if you're interested in hearing how some of these legends in the business got started. Because I'm always interested. I mean, you hear, you know, you see these legends like Rick Clark, who is former CEO of Brookfield, largest property owner of the world. I had Rick on my show, and sure, we're talking about all the incredible things that Brookfield was doing at the time, but I was more interested in saying, okay, Rick, how did you start out? Tell me about your first job. Tell me how you grew the business. Tell us about how this works. Because I think a lot of us can identify that. Unless if you've got hundreds of millions of dollars that you've already accumulated and you're looking to deploy, most of us are looking at, hey, how do we break into this? How do we grow a business? So I've learned so much from my clients. These interviews. I just, you know, when I finish them, I feel like I always learn a ton. So a lot of the examples in the book are from some of these legendary investors. And then as far as my own personal investments, having invested up and down the capital stack as an lp, as a co gp, even doing some lending, also bring that personal experience to the table. Wow.

Yeah. That's incredible. I could only imagine sitting down with some of the incredible people and interviewing them. I've been fortunate enough to do some real estate deals with on the private side with some of the founders of some of the largest institutions, too. And they said the same thing I always ask, like, how did you get started? What did you do? So the stories are incredible. And James's podcast is actually pretty great. I've been listening for years. It's on, I think it's on Apple pods and where else can you listen to it?

Everywhere.

Everywhere.

Spotify at this point. You know, it's amazing. The syndication platforms, I mean there's new podcast platforms popping up every day, but you can pretty much find it anywhere.

Okay, perfect. Nice. All right, well give us a little bit of the creds. Like you've done a lot of deals. You, you run a team of 30 or 40 now. Is that how it works?

Yeah, we were at three dozen at our largest and post Covid look the reality, and I'm sure you all saw it at your companies. Yes, we did scale back, but in many cases a lot of people said look, this is, you know, I got to go figure out and do something else. I mean brokerage as you know, Jeremiah is full commission and it's, you know, you got to be able to take the long view on this. And so it, we've been building back since then. We were finally really ramped up I earlier first half of last year we were back to, you know, almost three dozen strong and we were having on pace to just shatter all of our, our sales records. And then obviously last June rates start going up and then all of a sudden things really started slowing down. So that being said, we still ended up closing 50 transactions last year for just over $600 million. So. And we are now starting to see some traction again mostly with the small to mid size stuff, really even like 20 million and below. Because that is where we're seeing a lot of the private clients step up, a lot of the foreign investors, a lot of the, you know, here in the US the $1031. And so because look, if you're an institution or a big asset manager suggesting right now to your investment committee that you should go deploy, you know, hundreds of millions of dollars, say into office, for example, you know, I'm not sure anyone's going to make that recommendation if they want to have job security.

Yeah, yeah, that's exactly right. We're, we're seeing the same thing. There's a lot of movement here. There was just three new GPS formed to some major asset managers. People are jumping ship and going out and starting new, new teams. Okay, that's good question. So I actually want to dive into your book, James, and talk about a few points and get some insight from you. And when you wrote these, just because there's some really good nuggets here. And again for those Listening, go out and buy the book. It's, it's pretty awesome. And I already had some comments from friends saying, you know, I already like the way James actually breaks down just even watching real estate start doing it. So let's start off with step number one, which you're talking about find the right property. So you always talked about, like, trying to get ahead of future work trends and trying to get ahead of trends before they happen. Like, is there a good example of this and where you started to see a trend on a real estate asset class that helped you form a position and a thesis for getting in? Because, like, right now it's kind of getting old. But everyone's saying sheds and beds, right? They want industrial, they want multifamily. I think that's going to change personally. But I'd be curious to hear over all your experience, how you started to think and kind of create that framework for what do you actually want to look for and what do you want to buy?

Great question. And it is kind of where to start off is to, to take assessment of what, first of all, what kind of time do you have to devote to this? Is this something where you are going to devote full time, where you're going to actively manage and be a part of this, or do you want to take a more passive role? And of course, you know, if you're going to look at multifamily, you can be a general partner, you can be the operator, you can also be a passive lp. But I do talk about first, really considering what kind of time you do have to devote to this and then talking about the pros and cons of each asset class. And yes, multifamily, which is, you know, most familiar to everybody because yes, everybody needs a place to live and that's why it's continued to be such an incredibly attractive asset class is the way that a lot of investors start off. And many of my friends, clients, they said, look, my first investment was starting with my own place to live and maybe they bought a 3, 4 family and lived in one of the units. I did that early on. And you're able to benefit from more favorable financing, defer some of your living costs, and then from there expanding on to more units. And the benefit, of course, of multifamily is if you have 20 units, 100 units, if you lose a tenant, it's. There's always going to be someone else who's willing to take that space. Depending on what's going on in the market, the rent might be lower, but there's always demand, you know, whereas we know with, with retail where look you could get much higher returns but you have some instances where hey, if your tenant vacates there might not be a replacement tenant for it or if so it would be at a very steep decline. So I think you know, really understanding, you know, what is your risk tolerance, how much time you have to devote to this and then really taking stock in an area that you're focusing in area of specialization. So some of you listening right now, you might be a retail broker, you know, you, you might work for a fashion brand. Understanding how retail works and what retailers look for for is very important to be a successful retail investor. Okay now I do say in the book, and this was even before we published the book in January, meaning that it went to the, the publisher, you know, I think just as rates started to skyrocket and even then I was saying be cautious of office not just because of post Covid. I mean I think we all understand the hybrid world that we work in today but I talked about how capital intensive office is, right? And we're seeing that today in some of these buildings that are trading in New York. And I'm sure it's a small same thing in Toronto. You see themselves these incredibly large discounts, cheap price per foot. But then you look at these and say well that's only half of the equation because most of these office buildings, especially if they're obsolete, there's massive amounts of money that needs to be spent for base building work. And we haven't even got to the tenant concessions right where you need tenant ti downtime commission. So what I say, especially for those looking to get into the business, unless if you're just a complete contrarian who again is sitting on tons of money and can take that long view. I think office is a difficult thing to jump into now, but I'm sure, well we might have some contrarians in the audience who might suggest otherwise. And then lastly I talk about development which is also an asset class which I advise for first time investors to really be cautious of because of all the challenges that can arise during the development project approvals, environmental issues, certainly. How are you going to go out and finance it, right? Can you be successful? So look Jeremiah, and you mentioned industrial last and yes, I mean that is herd mentality. So you know, everybody, if everybody else is looking to buy multi family, everyone else is looking to buy industrial, there's going to be more competition that's going to compress cap rates, it's going to make it More expensive to buy. So I think the, it's a long way of saying and answering your question that, you know, I recommend, you know, kind of more of a mixed use strategy. I like the idea of buying an apartment building that has retail at the base with apartments above where you have that stability, the residential, but you can still get some pop from the retail. And I do believe that retail is having a huge resurgence. I don't know if you're seeing it in your market. I'm sure you are. People are out there. They might not be going to the office every day, but they're certainly hanging out at the coffee shop. And so that is an area where I think there's still real room for growth, massively.

Yeah, we're seeing a pretty big emergence in kind of the service based retail. The strip, the strip mall, basically, to quote one of the big Twitter guys, strip mall guy. But we really have what I would consider a pretty big change in how retail is moving, so. Oh, he got booted out again. He's coming back.

I'm back, I'm back. Sorry. I don't know why I keep losing action. I'm here, I'm listening. You got me.

Who knows? But yeah, the only thing I would say, James, is that Toronto has this incredible upside down supply demand ratio of housing. And so the development side in Toronto has become a very popular asset class. It's what I started specializing in almost 10 years ago. Even though I do all asset classes now. Like it's, it's something that's been one of the largest asset classes like we had in the highlight days, 8 billion in land sales over 2021, 2022, which is, yeah, double retail, triple apartments. Like it's not, it's not the same as New York, I guess, in the sense where apartments kind of reign supreme. So. And you see a lot of people actually doing a lot of what you would call the assemblage work because it's just, you know, they're so segregated here in Toronto. But that's a whole nother topic that we could get into. So. Okay, I appreciated that because I'm sure.

You could write a book just on investing in multifamily in Toronto. And that's something that I also talk about in the book is just the need to specialize. Right. And to really understand the asset class. It's, it's complicated. Right. I don't know what type of affordable housing requirements you all have, but in New York, you know, rent regulation, there's rent stabilization, there's rent control there's section eight and then, you know, there's everything in between. And there's a lot of pitfalls here. If you buy an apartment building, even if you are under the impression that you are getting a fair market unit, which you can charge a market rent for, look, if the previous owner, the seller, did not file the paperwork properly, it could revert back to its rent regulated rent, you know, and there could be penalties due as well. And you, for those of you listening who are investing in markets like Texas where there is no, you know, rent regulation, you might say that's insane. Well, look, the point is, you need to understand, yes, there are risks and there's going to be trade offs for those risks. I will tell you that a cap rate in New York, okay, is actually higher than you can get in the Southeast. And we saw that. And by the way, 2019, we actually strengthened our rent regulation requirements. It used to be that you could take a stabilized unit and you could decontrol it and charge whatever you like once the tenant vacates, right. If you did the proper amount of work. 2019, they removed it, right? So now, once rent stabilized, always rent stabilized, okay? And the point being what that did was it sent a lot of investors saying, look, I'm done with New York. If I'm taking the risk, I want to be able to charge a fair market rent. And so we saw a lot of these investors flock to the Southeast and all of a sudden you see cap rates and in Nashville and Charlotte and Miami and Austin, you know, dropped to 3%, three and a half caps, and New York shot up to a five, five and a half cap, which was pretty unbelievable to see. So I think the point though is that, you know, really for you to make a commitment to an asset class, you really need to study, know the ins and outs, understand the risk reward premium. And last. And Jeremiah, this might be. I don't want to steal your next question, but I know the next topic is having the right team of specialists. So. But, but if you have something else on your list to tackle next, let's do it.

No, I mean, listen, you're putting a segue right into it. This is something that I speak a lot about because I, I think generally there are a lot of people out there who have loads of cash and yet they don't have the right team and they're going about it with an approach of a little more ad hoc. So I'd love to hear your thoughts on this, but I know from my standpoint, I specifically have an entire list we send to clients of preferred consultants. And get your good tax attorney, your transaction lawyer, your accountant, and your cost consultant, your construction budget. You know, you kind of get the whole team set up before you get into it, and then you can get a really good insight into what you actually want to buy instead of spending time and money putting something under contract and then going through it. So I'd love to hear what you were thinking when you actually wrote this section, because it's very straightforward, but I'm sure there's some good stories behind that from your own position.

Well, I appreciate your pointing that out. And Jeremiah, this is why you're so successful at what you're doing, because you understand that real estate investing is a team sport. Right? And the people that you bring to the table are going to determine your success. Right. So going back to my podcast interview with Rick Clark, and I'll even go a little further back than that. The first podcast interview I ever did was with Bruce Ratner. For those of you who are not in New York, and you might not know that name, but prolific developer, did over 50 projects. He developed the Spiral by Gary 60, 70 story apartment building downtown. And we also built Barclays arena and is, I believe, still a part owner of the Brooklyn Nets today. And so, you know, obviously someone who's built up this massive portfolio, tremendous success. And when I asked him, bruce, how did you do it? He said, james, it wasn't me. It was the people. It was the people I brought to the table. And Bruce did a lot of complicated private public partnerships, and he'd actually bring people from the public sector to the table. Right. Marianne Gilmartin was one of his first hires. She went on to become CEO of the company. She now has her own firm. I had a great interview with her as well. And look, it's about the people on your team. And so those relationships, those specialists, we just talked about all the pitfalls of multifamily. Well, how do you protect yourself from that? Have the right attorney, not just a generalist, but a commercial real estate attorney who does multifamily. Right. So you want to ask, you know, is this an asset class that, you know, the attorney who drafts a retail lease for you may not. Is not going to be the same attorney who's going to do a lease review for your. For the residential rent. So you might be hearing this and saying, james, this just sounds like really expensive in a lot of people, but believe me, this is time well spent because a great team, right? Attorney, mortgage broker, lender, architect, contractor, and of course, an investment sale broker. They're going to save you a tremendous amount of time and money. And by the way, they will also help unlock great opportunities. So. But Jeremiah, you already said it. A big part of this is once you have found a trusted professional, someone who you can rely on, that investment sale broker, that attorney, that banker, they're going to help you make introductions to other professionals who can make you successful.

Yeah, that's, that's a great breakdown. And that must have been an epic interview. I mean, Bruce Ratner, that guy's an absolute legend. He's done some incredible deals.

Look, he's, he's a brilliant guy, but he started his business the way I'm sure a lot of you started your business. His first deal was raising, going door to door, trying to raise $25,000, you know, to put a deal together. Now granted, that was in the 19, you know, 60s and 70s and things was a lot cheaper back there. But look, he was still putting his name on the line and raising those first dollars for anybody. I mean, you know, I've met very few people who say, James, I like going to raise money, right? But those who figured out how to do it, and we can certainly get to that next because I think, you know, one of the big things is that I believe holds investors back, people back from becoming investors is lack of capital, fear that they have money to.

Bring to the table 100%. And I mean, we could skip over to that section. But I, the, the biggest thing that I hear, number one, is people trying to do deals on their own. They're like, oh, I'm never going to be able to do a 30 million dollar deal. I've got, you know, 1 million bucks saved up, or I've got half a million bucks saved up or even a hundred thousand. And they're saying, but I, I, James, I know through your experience you've seen some pretty wild deals done with very little capital and good information in good operation. But like, personally, I know a deal I, I'm actually invested in, the guy tied up a deal which is arguably probably worth $300 million with no money down. And he using his, his savings for deposits and eventually bringing in a partner. But he had such good operations and experience and vision that he was able to capitalize on that deal and find the right partner for a vision that really no one else saw. And you did that with basically about $1 million of savings.

Wow. Well, look, I mean, the terms of getting into a deal, a contract, tying something up that is very market Specific. So I'm not saying that that's impossible in New York, but challenging and we sell properties here. It's okay, where's your 10% hard deposit and are you prepared to close within 30 days? Now maybe today we're going to have to be a little more flexible, but we're not giving long periods of due diligence. We're not letting buyers, you know, put up a small good faith deposit. Now that's market dependent. Right. So it sounds like if you're Talking about a $300 million deal, that was probably a pretty spectacular location. So I'm sure there was a story behind how he was able to tie that up. But look, can you go into secondary and tertiary markets and tie up a piece of property for $25,000 with 90 days due diligence? Or maybe it's a piece of land where you can get it contingent on a certain entitlement, you know. Sure. But what you do have to be aware of is that you are obviously buying and then selling in the same market. So that same it might be great because you don't have to put capital at risk to type a piece of property for $25,000 in 90 days due diligence. Just remember, you're gonna have to reciprocate that on the, on the back end when you go to sell it. So New York can be a very tough market to break into, as I'm sure Toronto is. But after you're in, it becomes a pretty liquid market when you need to sell.

Yeah, that is for sure. New York's like no other place. I mean, we have deals like that in downtown Toronto, but yeah, it's. Most people expect the 60, 90 days in order to do their work. But as a good broker representing the seller, you always have to do your work to make sure the guy can, can actually close as you know. Okay, so just quickly moving on to like spotting the gems. This is probably the biggest question that I get all the time, you know, especially on the sell side. Well, I want to sell something, but there's nothing else for, for buying. And, and you know, my simple answer is, listen, especially in Toronto and Montreal, I don't know what it's like the numbers are like in New York, but every year there's over $10 billion of sales. So there's lots of transactions happening. You have to go out and find them. And you talk about a few different things in your book about follow up, which is very key. You talk about reaching out and ensuring that you're watching the deals in the market, you talk about getting creative, like looking at tenancy, seeing if there's a tenancy that can move, reaching out to the tenant. Basically you give a whole number of examples of how to go out and find deals. But again, I would love to hear when you talk about your follow up and your cold calling. As a buyer who's not a broker and maybe doesn't have access to all the information that we do have, what's the best way that you've seen to go out and find the gems and dig in and find a property that might work for you, whether it be tertiary, tertiary or in, in a core area?

It's a great question because I think the most important thing that you all bring to the table is the deal. Okay, so that is, and it might sound obvious, right? But you know, finding an incredible opportunity, it all starts with that. So I don't know if there's any residential brokers in the audience, but when I speak to companies or audiences where there are residential brokers, I ask them, I say what percentage of your listings are or sales out there are FSBOs, meaning for sale by owner. Okay. And the answer I usually get back is about 2 or 3%. So in other words, what that means is all these deals, home sales, apartment sales, are openly marketed on the multiple listing service. Everybody knows about it, brokers have the information, Right. So it's what I would call in a very efficient market. Okay. Whereas commercial. It still blows my mind that I've been doing this for 25 years. And yes, we have become a lot more efficient with technology and everything that we're doing. And yet a lot of these opportunities still do not make it to the open market. Right. So the fact that, you know, Jeremiah, when we list properties, I know you do the same. You put it out there for the world to see. You've got a job to do to really expose the property of the market and get top price. But you know, I know you've probably come across a lot of owners who say, you know, Jeremiah, that's great, but I don't need your help. I'm going to just sell this on my own. Or, you know, just bring me a buyer, right? And I would say that's probably about a. How about a third of the sales happen, right? And that's where there can be some incredible opportunities. So I'm not suggesting to you all, and everybody likes off market because there's a story. So I'm not saying that every single off market deal is a bargain. However, I would suggest to you all that it's a numbers game, right? So if you are going to invest in a property that is broadly marketed, that the whole world knows about, you're gonna have a lot more competition as opposed to something quiet. So a lot of what I talk about in the book is how to source out those off market opportunities. And guess what, it doesn't mean that a broker's not involved. And Jeremiah, I don't know how much off market you do, but oftentimes you know of something that's out there. Right. And so how do you cultivate the relationships with brokers? So when you call someone and say, you know, hey James, I got $20 million to place, I've looked on your listing, your website, I'm not seeing exactly what I'm looking for. What else do you have? Right. And how do you ensure that you're going to get a look at, you know, that broker's pipeline and really also when it's time for them to, they find a great opportunity that you end up getting that first phone call.

100%. And that's. I, I remember one of your podcasts, I, I actually am forgetting the fellow who you interviewed, but he said every single month or even week, I think he was calling 50 brokers and just asking them, hey, what's up? What's in the market? And so he would specifically spend Monday and Tuesday calling brokers. And he was able, through the course of that kind of structure and habit, to buy something like a billion dollars worth of acquisitions in like it was a very short time period. I don't know if it was 10 years or so. And he was a young fellow. And so I always tell all the buyers, I say, you know, make it as easy as possible, ask for information and you shall receive. And some of the best deal makers I know, they always just call to chat, you know, and they know how I laugh about it because I, I start talking and you probably have this too, James, but it's like, hey, what's up? What's new? Like it's just open ended questions and it's the follow up. And you know, some of the best deal makers, they're very specific with that.

Jeremiah, I hope everybody, you know, in the audience just heard what you said because you know, this is so key and it might sound like something so small. Right. But you know, I, I wouldn't be surprised, Jeremiah, if you said the same thing where as our job is sales brokers. Yes. Our job is to reach out to buyers when we have something for sale. That being Said I would say 90% of my calls are outgoing, right? How many of those inbounds do you get? How many of those really successful investors call you every month to say what's going on? Because inevitably that's where the relationships are made. You know, certainly the in persons, the coffees, you know, really, you know, and by the way, as a buyer and investor, also helping out the broker, hey, I looked at this deal, it's not for me but it's off market. Maybe you can go sell it, right? Like really try to make it a two way street. Because again the most successful investors I've seen out there have cultivated an incredible relationship with the brokerage community, right? And if you listen to our friend or read our friend Bo Barry's book Multifamily Investors who Dominate, he tracks his market in Gainesville, Florida like crazy. He believes that brokers one way or another involved in like 93% of the sales. Now again those aren't all on market but if a broker is going to be a part of the transaction then you should get to know them and don't just sit and wait for that phone call to come to you.

100 those are the best deal makers I know. They're always just calling. Open ended questions. Hey, what's going on? Okay, so I want to talk about your chapter on know what to look for. Like this is one where you actually have some really good little tidbits here because you, you talk about effectively like what to look out for. And I think that's a good step in starting on, you know what you need to do is by knowing what you need to look out for and not do. And but one thing that stood out to me is that when you're talking about apartment buildings for example, which is a very highly competitive market, you talk about knowing the competition in the market and knowing exactly how many available apartments are out there. Like what is the lease, what is the, the changes on the lease. And this is something that stood out to me because when I talk to young guys coming up in the business, I say the single most important piece to being successful in this market is creating your own data set and being competitive and hyper competitive specific in the type of data that you build out.

Thank you for listening to the insider's edge to real estate investing. We appreciate your subscribing and sharing with your friends. If you haven't already, please connect with James AmesnelsonNYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show Notes and other episodes, along with an exclusive video series and other helpful resources so you can gain the insider's edge to real estate investing. Until next week.