My father is telling me to do so because he has done residential and doesn't feel growth is fast enough. I will be under his guidance most of the way since he has close 2 or 3 in his career. I'm wondering do new agents ever get to work on such high profile transactions? Thanks in advance.

I just finished CCIM 101 and learned quite a bit. Pretty tough course work. I noticed several MBA's struggling to keep up. If you are a newbie and dive into the CCIM programs and sumbit your qualifying portfolio of 5m closed commercial deals than rest assured you will know more about commercial than about 95% of the agents out there. Just a heads up...after Sept 1 portfolio minimum doubles to 10m.

Thank you for the info. Unfortunately I don't know much about 5m closed. Can you elaborate?

Five million total volume in closed commercial deals plus 1 week each of CCIM 101,102,103,104 and pass a comprehensive exam with a total cost of about 5k (plus travel expenses, meals and lodging for four seperate weeks) then you can submit your portfolio for CCIM designation. After Sept 1 2006, CCIM will double the minimum production to 10M closed. I just finished CCIM 101 and am already a candidate so I will be grandfathered to the 5M. Hope this helps...

Actually that is more confusing info but I appreciate your help. I'm going to do a search and see what it is you mean. And I do like the idea of being the 5 percent just like everything in life.

How many properties should a newbie close in 1 year? Also any books recommend would help.

TY

You were given good advice. You must set your own goals as it relates to what it is you would actually like to accomplish. However, you may also may what to learn the basics of financing commercial real estate and how it works.

Commercial properties are vastly superior to residential properties for the following reasons.

The Commercial property itself for the most part qualifies for the loan vs. the fico score of the borrower with residential property.

You are able to obtain NON-recourse financing (not personally liable) for commercial loans.

There are Commercial properties available that are non-distressed with long term (7, 10 and 20 year) professional tenants.

Multi Family Financing Programs

Multi New Construction And Substantial Rehab

Multi Family Refinance

Multi Family Acquisition Loans

Assisted Living/Skilled Nursing

Manufactured/Mobile Housing

Establish The Market

The first step of this loan process is to engage a feasibility study to determine marketability and to establish market rents and operating expenses. Additional items required at this stage include a project description including amenities, preliminary site, building and unit plans; rough, estimated project costs; and environmental reports. At the conclusion of processing the pre-application, we will issue an Invitation Letter, which is a written commitment agreeing that the project is both feasible and setting NOI to be used for underwriting. This agreement sets the maximum mortgage based on debt service coverage, and helps to finalize borrower equity requirements.


Determine the Costs

During the second phase of the loan process, analyzes the borrower, property manager and general contractor, as well as the the final architectural plans, specifications and construction costs. Additional due diligence items during Phase II include zoning acceptability, site control and other typical commercial loan requirements. Processing of this phase also includes a Cost and Architectural/Engineering review to determine acceptability of final design and cost estimates. At the conclusion of this phase, WE issue a Firm Commitment to finance the project, and the interest rate for both the construction and permanent mortgages may be locked.


The Anticlimax

The closing is the final step for both the construction and the 40- Year permanent financing. Because the interest rate is locked for both mortgages, developers do not have to worry about permanent loan interest rate risk. To a certain extent, closings for this program are anti-climactic because our Firm Commitments are, quite literally, firm, final commitments with no conditions.

Unlike typical bank construction financing, when we issue a commitment, we have finalized and approved all relevant items, including final design approval, cost approval, general contractor approval, etc. In fact, our closings are also Construction Draw #1, and all borrower pre-paid items (architectural, survey, engineering, etc.) are drawn down at this stage and either credited to borrower equity requirements, or paid to the borrower.

New Construction/Substantial Rehabilitation Insured Loan Program offers more favorable terms than traditional two-step construction and permanent financing. With this program, there is only one closing, and one interest rate lock, which is always lower than traditional bank financing. This program utilizes an interest only (interest is capitalized into the mortgage) construction loan that automatically converts to a 40-Year Permanent fixed rate mortgage upon completion of construction.

90% Loan-to-Value

40 Year amortization

40 Year Term (no balloon)

No maximum loan amount

Low, fixed interest rate, based on market spreads over the Ten Year Treasury yield.

“Developer’s Fee” of 10% of cost allowed to be used towards equity requirement

No personal liability (non-recourse)

Negotiable pre-payment terms

1:10 Minimum Debt Service Coverage

This loan is always assumable

Third-party expenses and loan costs are finance-able.

Acquisition Multifamily

85% Loan-to-Value

35 Year Amortization

35 Year Term (no balloon)

7.5% Seller promissory note allowed for down payment requirements

No maximum loan amount

Low, fixed interest rate, based on market spreads over the Ten-Year Treasury Yield

No personal liability (non-recourse)

Negotiable pre-payment terms

1:18 Minimum Debt Service Coverage

Third-party expenses and loan costs are finance-able.

Rates and Terms determined by LTV, credit, property type and other conditions.

http://tinyurl.com/p2amk

Refinance Multifamily

Multifamily - Refinance

85% Loan-to-Value (80% with cash out)

35 Year Amortization

35 Year Term (no balloon)

No maximum loan amount

Low, fixed interest rate, based on market spreads
over the Ten-Year Treasury Yield.

No personal liability (non-recourse)

Negotiable pre-payment terms

1:18 Minimum Debt Service Coverage

This loan is always ASSUMABLE

Refinance

Assisted Living/Skilled Nursing

85% Loan-to-value, no cash out

35 Year amortization

35 Year Term (no balloon)

No maximum loan amount

Low, fixed interest rate, based on market spreads over the Ten-Year Treasury Yield.

No personal liability (non-recourse)

Negotiable pre-payment terms

1:18 Minimum Debt Service Coverage

This loan is always ASSUMABLE

Rates and Terms determined by LTV, credit, property type and other conditions. This is limited information and meant for general reference purposes.

[color=darkred]Acquisition

Manufactured/Mobile Housing

80% Loan-to-Value

30 Year amortization

10-30 Year Term

No maximum loan amount

Low, fixed interest rate, based on market spreads over the Ten-Year Treasury Yield

No personal liability option (non-recourse)

1:20 Minimum Debt Service Coverage

I'm rereading this. Thanks again.

Sometimes it's all about meeting the right people,right now I am working with a developer assembling properties for a TAD to redevelop property.

If it goes through I stand to make a few hundred k in commissions which would be life changing for me.

In commercial alot has to do with connections.

I think Donald Trump once said that the commercial market (offices, warehouses, ...) is more difficult to get into as an agent/broker. I assume he knows something about real estate

Great info! Thanks for the post.

Commercial is tough, but like anything else, it can be done. The only thing I don't like about large transactions is the amount of fraud that occurs. Sellers are quick to try and cut a broker out of money.

Jennifer,

I have yet to see a large amount of fraud in Commercial transactions regardless of size. There are just too many safeguards built into the transaction as both parties are represented by their attorneys.

Commercial sellers are also far less likey to try to cut the broker out of their money because they are aware of the work involved in commercial transactions and the time spent by their agent to bring the transaction to the table. The real estate commission was factored in from the beginning and is simply a cost of doing business something most commercial buyers and sellers are comfortable with!

residential is deffinetely different than commercial,some of the commercial deals take years to get to closing,I squeeze the residential ones in for cash flow between the long closings.

Commercial is much more difficult. You have got to understand how money works, the different leases offered, and know how to develop cap rates. Take CI 101, it will open your eyes.
If you want to work on a designation, CCIM & MAI both have "FastTrac" co-op agreements.

Ok, my curiosity has officially been peaked. I believe I asked this question a short while back, but, I will ask it again, with a few others thrown in for good measure. What is the official starting point for a real estate practitioner to begin a career in commercial real estate? Are there any good online educational resources that I can use to start building my foundation of knowledge? What would be the cornerstone of this metaphorical skyscraper of knowledge?

Is it possible to go to work for a commercial firm to learn the ropes on some type of apprenticeship program? Would a firm consider hiring a residential broker?

I would suggest you take the CCIM Into class which will give you the basics of commercial investment properties and should count for 6 elective hours of CE for your state license. I would also suggest that you get the Top Dogs training program as it is specifically designed for the commercial market.

Thanks Paul! What is Top Dogs, by the way? I'll search here to see what pops up.

Donald Trump knows a few things about commercial real estate...lol Maybe!