RISMedia's Real Estate Magazine

OCT 2018

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

Issue link: http://remag.rismedia.com/i/1032371

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Page 110 of 134

106 October 2018 RISMedia's REAL ESTATE Actually, it's very hard. "You can't just go in cold," says Herbert Chou, an associate broker with Warburg Realty in New York City, who started in commercial and now operates in both markets. "You need a knowledge base before go- ing into commercial real estate." Despite all the temptations and all the theoretical upside of crossing over into commercial—higher com - missions, diversification of the list- ing portfolio and not having to deal with emotional residential clients, to name a few—the risks of dabbling in commercial real estate far outweigh the rewards if the broker doesn't know what he or she is doing. "If you jump from one to the oth- er, it actually hurts you financially," says Omar Lopez, a Las Vegas- based broker with Berkshire Hatha- way HomeServices Nevada Proper- ties. "A typical residential agent spending $1,500 or more on their base costs, in commercial would be spending at least $25,000 on the basic systems to represent the cli- ent to the best of their abilities." Additionally, Lopez warns, com- mercial has a much longer lead time than residential, and that long and expensive wait from the initial offering to the closing can be brutal for even the best brokers. "You'll be in a market that's strongly different. If everything goes right, it most likely will take 6 – 8 months to get paid. Between zon- ing, permits and partners, so much can go wrong," says Lopez. Lopez had a successful career as a residential broker, but transitioned by Andrew King Branching Into Commercial Real Estate: RISK VS. REWARD {Trending} W hether it's an attorney for a retail chain looking for a corner location with lots of foot traffic, or a CPA for a developer of creative space who needs tenants, chances are, an experienced residential broker's database is loaded with potential commercial opportunities. How hard could it be to make some calls and bring a buyer and seller together just like they do every day for residential clients?

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