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Right now, most brokers in the market are extremely busy with transactions due to high demand. Tyler Chesser, Founder and President of The Chesser Companies, is back to share his real estate brokerage knowledge. Tyler tells us why a broker should be able to analyze deals quickly in this particular market cycle. He also shares the importance of building relationships and incentivizing with syndicators and investors. Moreover, Tyler touches on the need to stand out above others and display your creative side in making deals.
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Getting Started In Real Estate Brokerage with Tyler Chesser
Our guest is Tyler Chesser. Thanks for being on the show, Tyler.
Thank you so much for having me, Whitney.
Tyler is on the show WS198. Tyler is a personal coach to many people and he helps many people in their business and lots of self-improvement. He’s really good at that. He’s also the Founder and President of The Chesser Companies, a leading commercial real estate broker, a personal development thought leader and a multifamily investor transacting over $50 million in deals since 2013. His passion is designing the lives of fulfillment through personal growth and real estate investing for his clients, his partners and the people he influences. Tyler, I appreciate you again being on the show. You’re an expert and I look forward to getting into the brokerage, what that means, who you are, your side of the business and that relationship with people that are syndicators who are looking for real estate. Give the audience a little bit about who you are, what your focus is and let’s dive in. Let us know who you are.
Thank you so much for that. One of the beautiful things about being in the real estate business is that you can be very dynamic. One thing that I seek in my life is being dynamic. The topic of our discussion is along the lines of the real estate brokerage. I work with investors all around the country, as well as internationally, acquire and dispose of income-producing assets in Kentucky and Indiana. I’m located in Louisville, Kentucky. We’ve got a great market that we’ve been seeking a tremendous amount of yield that has been compressed over the past several years in terms of such a growing economy. It’s been great for me to be able to build relationships with syndicators, fund managers, active investors and passive investors. We focus mostly on multifamily. That’s a brief introduction of what we do on the brokerage side.
We were talking and a specific question from somebody who’s getting into this business is how to build that relationship with a real estate broker or with somebody that’s in that space when you’re just getting started. Tyler, help us to get started. For the audience who’s pursuing that right now, they’re looking for deals. It’s not like there’s an abundance of great deals at the moment, but we heavily rely on somebody like yourself when we’re looking for those deals. Help us to know how to approach somebody like yourself the first time. We’re just getting into the business or maybe we’ve even had a successful business or a career doing something else, but we’re now pursuing multifamily apartment complexes.
[bctt tweet=”There are lots of different things you can do. It’s just a matter of creativity.” username=””]
If you look at it right now at this point in the market cycle, we’re looking at supply and demand and there’s a low amount of supply and there’s a heavy amount of demand. You’ve got to take that in consideration as an investor. You have to also consider the perspective of brokers that you may or may not be dealing with or brokers that you want to get on their list. You want to be on their radar as someone who is willing and able to close a transaction. The first thing is to have a full perspective of the reality that most of your brokers that are doing a lot of transactions are extremely busy right now in this market. There’s a huge amount of demand. They’re looking for deals, building relationships, putting deals in front of people who they know and proven to be able to transact. You have got to have that perspective of, “I’ve got to be able to act quickly. I’ve got to be able to be knowledgeable. I have to be able to get the deal done at the end of the day.” I’ve got to make life a little bit easier for this broker if I want him or her to send me opportunities or to put me in front of the opportunities that are so rare right now.
That’s one of the first keys if you’re getting into this business is to make it easier. Just being easy to do business with is one of the very first steps that you should take for any type of business, particularly in this market cycle when there’s so much competition. To set yourself apart from other buyers is to say, “I’m going to be able to analyze this deal very quickly. I’m going to be able to get you clear and concise questions so we can follow up and we’re going to get closer. We’re going to move forward. We’re always going to be moving forward towards a transaction, which brokers are paid on transactions.” You’ve got to have that perspective. That’s one of the first steps for a new buyer in this market.
You were thinking about the perspective of the broker and that’s good. We need to think about how they’re getting paid. They want to know who their buyers are. That’s how they make their money. That’s how they’re putting bread on the table. Getting on their “buyers list” or at least being in your mind, you get this deal or a seller contacts you and you contact him. You know that this property is for sale, “I want to be the person that you think of. You have my cell phone number and right then you’re like, “I’m going to call and see if he’s interested in this deal.” That’s where I want to be on your list. Help us to get there. It’s important to understand that it’s not going to happen in the first week that we meet probably. I want to be on that track to get there. I want to help the audience to get to that spot where somebody like yourself has their cell phone number and knows them as that buyer or that you’re putting deals in front and becoming knowledgeable. We’re not going to know everything about the industry even many years in, but at least to get started, what shows somebody like yourself that have studied and that understands mostly what I’m talking about?
There are a few things that you can do. Number one, I’d want to be clear and upfront of here’s where I’m sourcing my equity and here’s where I’m sourcing my debt. I’d want to be all upfront and show your cards about your behind-the-scenes business model of how are you going to close transactions. Maybe if you haven’t closed transactions yourself, who on your team has? Put me in contact with them. Let’s talk about who’s going to be signing on this debt. Who’s your sponsor? Who else are you working with? What other service providers are you going to be bringing in on this transaction? Show me that you have some wide perspective of all it’s going to take to get this deal done. Especially in this market, we’ve got to be able to move quickly and we’ve got be able to move through due diligence quickly. If we’re lucky enough to be awarded a deal, I’ve got to know as a broker that you’ve got the pieces in place to be able to get this done 30 to 45 days or 45 to 60 days.
As you know, time goes extremely quickly once you get that deal under contract. I want to know who’s your attorney. I want to know who’s doing your title work and I want to know what kind of due diligence do you require. I want to know what kind of contingencies are a must for you and what are not must. I’d like to get detailed. We want to be timely because we have to go back to the thought that all brokers right now are extremely busy so let’s not take up an hour and a half of the broker’s time in giving these details. It’s great to maybe put that information together and say, “I’m serious so please, when you get this, give me a call. We’re ready to make a move. We’re very knowledgeable and we’re very realistic as well.”
Showing you that we have those team members in place and letting you talk to that person who’s done a few deals that we’re teaming up with most likely or the person that is bringing the debt or signing or how we’re raising the capital and things like that. You understand that you need to know some of that so you know that we’re serious upfront.
The other thing too is your financing. I want to know in somewhat detail that you’ve got aligned to a very attractive piece of financing that’s going to work. I don’t want to go 30 days to 40 days down the line and have a story like, “We’d beat out thirteen other buyers on this deal, but we can’t do it.” That kills my reputation as a broker. If you kill the reputation of a broker by not being able to do the deal because of your own fault whether it’s financing or whatever, then it’s very unlikely that you’re going to get more opportunities in the future. You’ve got to prove your capabilities.
You’re helping them through this process as well. If it doesn’t happen, it puts a blackout on you to them.
The other thing too is that a lot of times buyers can piggyback on the credibilities of brokers. If you have a broker who has very high credibility in the market, you being represented by them then are elevated to a point where you’re going to be awarded opportunities that wouldn’t have been awarded to you otherwise. That’s the other thing that brokers are considering like, “I’ve got this reputation to continue to uphold and you are my lifeline to continue upholding that.” It’s a delicate balance in brokers who are taking this into consideration with each and every deal.
You mentioned about making your life easier. Explain that a little bit. How do I make your life easier? Give me some details on how to do that.
[bctt tweet=”The vaguer you are, the fewer people are going to remember you.” username=””]
The business is extremely detailed. There are many moving parts. You need to be sophisticated. To be able to do transactions on a high level, you need to know what you’re doing. If I’m sending over a financial analysis, I expect you to know the basics and beyond. I need you to be able to hold that within. You need to have some assistance from the broker and maybe there’s some identification of items that may be missing or maybe there is some intangible knowledge that needs to be filled in by that broker. I particularly don’t want to go through line item by line items or rent roll analysis, particularly per deal unless we’re looking at due diligence and such. That’s something that I offer my clients further above and beyond analysis once we’re under contract. I can’t sit here and analyze every single deal for you on your behalf prior to going under contract because there’s simply not enough time in the day. That’s just one example, but having beyond the baseline understanding and sophistication knowledge of what you’re doing is going to make any broker’s life much easier.
Tell me about the first conversation. I’m calling you. I look at Louisville, Kentucky real estate looking for apartments or whatever and all of a sudden, Tyler pops up. I see your number and I see you’ve done some deals, “I should connect with Tyler.” What are you looking for in that first conversation? Help me to stand out. What’s a way that I can stand out in your mind on the first conversation or maybe the first time we meet for a coffee?
The first thing that I want to hear from somebody is, “I’m so and so. I have this experience. I’m easy to do business with. I’m looking for X, Y and Z.” It’s very specific because the vague that you are, the less I’m going to remember you. We talked about that on our last show. We’ve got our CRMs and we’ve got our notetaking systems where we’re taking down the proper information. However, if you’re saying, “I’m looking for 100 to 300 units in Louisville. Send me everything you got.” That’s not going to stick out to me when 125-unit B class deal in X, Y and Z submarket came up because you are 100 to 300 units. That’s not specific enough. I want you to be specific and I want you to be realistic as well.
I want you to show me your market knowledge. Don’t call me saying you’re looking for an eleven cap A class deal. That obviously doesn’t exist in the market. Show me your knowledge and show me that you’re quick. Show me that you’re someone who’s not going to take 45 minutes on the phone with me every single time we talk unless we truly are going through an intense negotiation and such. Showing respect, showing knowledge and showing that you’re easy to do business with, those are the things that I want to see from that initial discussion.
I appreciate you laying that out. Be respectful of your time, for one. I noticed you said to show your market knowledge. I hadn’t thought about talking about that, but that’s smart. Show you as a broker that I have done some research about Louisville, Kentucky or even telling you, “Tyler, I’m looking in this part of the city and this is why.” That’s going to show you that I’ve done some homework. That’s standing out. What about incentivizing a broker or partnering with a broker? What if I said, “Tyler, I’m looking for this type of property in this part of the town. If you’re willing, I would love to even have you partner with us or partner with our company.” I’ve heard of people getting started in the business that way. What’s your take on that and what would that look like?
That would help you stand out because for the most part, a very high percentage of brokers are either investing or are interested in investing in real estate as well. If they believe in their product, that’s the end result. I think that’s a great way to stand out, “I’m interested in purchasing an asset. I’m easy to do business with. I’m knowledgeable and realistic. Also, I want to add an added benefit to you for equity or some partnership position,” which is an amazing way to add additional value to that broker. That’s going to give the broker an opportunity to say, “This person does stand out.” It’s also unique. Creative thinking is along the lines of what you’re saying here is great because there are so many buyers or so much competition out there. It’s key to be creative in your thought process of how can I entice this broker to do business with me rather than the with hundreds of other people that they may have on their list.
It depends on the operator but the equity on that deal is going to pay you a lot more than your commission long-term. If you’re a broker that can think long-term and you’re not living for the next deal, I would think you would be happy. Many would be happy to do that. I’m sure there are many that would not. What about the accuracy of what’s being said? I hear all the time, “You can’t trust anything the broker sends you.” I don’t know if the audience heard people say that but I would love your take on that as a broker. You being on that side, you are creating all this information about these properties. You’re sending it to us. Everybody says, “You better go through that with a fine-tooth comb.” Even though the broker put that on there or the expenses are and all those things. Help me to understand the accuracy of the information how you all maybe are getting the information and how we should filter through that.
First of all, let me say that due diligence is one of the most important things. You can be very detailed on in your real estate investments because there’s going to be a lot of inaccurate information. I don’t know if that’s necessary and I’m not going to speak on behalf of the entire brokerage community, but there are times where there’s perhaps less integrity than there could be. I also think that at times, there are limitations. You deal with sellers who may be in a sticky situation. They need to sell a property for whatever reason and they have limited information. Perhaps their management group is not as sophisticated as they should be or could be so there are limitations there. It’s the job of the buyer to dig down and identify that proper information.
There are also a lot of assumptions that you can make in the market. There’s research that you can take and put together to make appropriate decisions while also having maybe some incomplete information. It’s good to go into a deal and assume that there’s some information that’s still yet to be had and assume that there’s still some incomplete information that we’re going to have to fill in. You have to make those proper assumptions to make an appropriate decision. Having a knowledge of what’s an industry standard for this expense or what’s the market rent for this location or this condition is very important. That’s where it goes back to sophisticated and deep knowledge. It’s having all those tools, but also have the understanding that you’ve got a bulletproof contract that your attorney has helped you draft and that you’ve got contingencies in place to protect you. For some reason, your assumptions have been proven to be way out of whack and your acquisition cap rate is 3% versus the 7.5% or whatever it may be. Those are very important.
You’re having to come up with the brochure, operating memoranda and this information pretty quickly. You can put this out to sellers unless it’s off-market or whatever. You’re coming up with this stuff pretty fast. I do feel that it’s our job to dig in and make certain that this is something we’re going to pursue. Tell me the process of maybe even making that first offer. I’m just getting into the business. We’ve had these conversations now. You feel that I’m going to be a buyer. I’ve shown you my team, but I haven’t done a deal yet personally and I’m ready to submit that first LOI. What’s going to help me to be selective or be awarded this opportunity over somebody else even though I haven’t done a deal yet? We’ve done these things and we’ve talked about the team. Help me through that process for the audience that’s in that spot. They’re looking at deals and they’re on the teeter-totter of, “Do I start submitting LOIs or not?”
[bctt tweet=”You’ve got to prove your capabilities to have more opportunities in the future.” username=””]
There are creative things that buyers do. I’ve seen people submit a video of themselves in addition to their LOI and say, “Here’s who we are,” and all these different things so they can communicate directly with the seller. That’s more on the fringe. That’s not something that happens very frequently. A traditional way to stand out above the rest is to be someone who is taking a tour of the property. You have touched and felt and you’ve dug in and you showed a great understanding of what that asset is. There’s never anything worse than going into a contractual situation and spending a great deal of time and recognizing the fact that this buyer didn’t understand the deal going into it in the beginning, which is why they had to utilize our contingencies to exit the deal on the back end.
Show a commitment and show your time where you’re able to spend time at the asset. Maybe you aren’t local, but you need to travel to that site. Meet the listing broker, the seller and the property manager if you can and show them that, “Beyond this digital world, I’m also a real person who is interested in acquiring your asset.” One of the best traditional ways is moving beyond digital and to more personal because this is a relationship business. You’ve got to show somebody that you’re living and breathing beyond an email. That is a great way to set yourself apart.
Would you recommend a video? I’ve heard of people doing that. I’ve not done that, but it crossed my mind when I heard some other people doing it.
It depends. If you’re going into this hugely contested deal where you expect twenty offers and you just want to lay it all out on the line and you want to do everything possible that you can, that’s perhaps not the worst idea. What can you lose in that situation? If perhaps that seller connects with that concept and your offer is strong and all these different things, that’s great. Another thing that we do see in hotly contested deals are hard money day one. You also see limited contingencies, perhaps even no financing contingency on very hotly contested deals. Those are other things. If you’re willing to take those leaps of faith or if you feel like your assumptions are very strong and they’re very correct going in, that’s your items to consider there. There are a lot of different things you can do. It’s a matter of creativity. That’s one of the best things too about the business. The best and the worst is that you have no limits to your creativity, but you just don’t want to get paralyzed to it. You don’t want to slow yourself down. You want to take action but there are a lot of ways to set yourself apart.
Tyler, is there anything else you want to tell the audience about this relationship between the syndicator and the broker and some things they should be thinking about or doing?
It’s all about that relationship and it’s all about the knowledge and showing someone that you’re going to be easy to do business with. I tell people all the time to be easy to do business with and it’s amazing that things will happen. We’re going to run into challenges every single deal. I talk about this with a lot of my clients. I expect this to have ten to possibly fifteen real roadblocks in every transaction. Are you easy to do business with? Are you reasonable? Are you realistic? Do you have a full perspective? If you have all of those things, you’re going to be somebody who’s going to be very successful in the business, but you also have to be patient yet be persistent and all those things. I think that’s key.
Expect ten to fifteen roadblocks in every transaction. Here’s a man that would know. Tyler, you’ve been a great guest. I appreciate the expertise, helping the audience understand this relationship and to really standout. How available is a broker say, “Tyler, let’s go play around golf on Wednesday?” I think that’s going to come a little later. I learned a little more about what you’d like to do and maybe we have some common things there. Is that something you suggest?
It depends on the broker’s house because there are some national firms and you’re talking about possibly more of your boutique firms. It just depends on the infrastructure that they have, whether or not they’re going to be able to spend an afternoon on the golf course. Broker’s business is all about building those relationships. If that’s something that they enjoy, if you’ve learned that that’s something they enjoy and they want to be out there with you, then offer that. Otherwise, what’s unique to them? Maybe they like basketball. Take them to a basketball game. Maybe they like football or whatever. Enjoy a great glass of bourbon as we do here in Kentucky or whatever it is that you feel like is most appropriate, extracurricular activities are always good. Everyone likes to have fun, even brokers.
Tyler, you’ve been a great guest. Tell the audience how they can learn more about you and get in touch with you.
I invite everyone to visit my website at TylerChesser.com and you can also subscribe there. We do a great newsletter and you can also reach out to me on Instagram or Twitter, @TheTylerChesser and also on Facebook, The Chesser Companies. We invite you to engage with us there and we love to work with your audience, whether it’s on real estate brokerage or coaching as well as real estate investments. It’s been great to be on your show, Whitney. I appreciate you having me on again.
It’s my pleasure. I’m honored to have you back, Tyler. I appreciate the audience being with us. I hope you will reach out to Tyler and I hope that you’ll go to Life Bridge Capital as well and connect with me. I hope you’re on the Facebook group, The Real Estate Syndication Show. I hope you’re sharing the show as well with your network and everybody learning about this business. We will talk to each of you next time.
Important Links:
- Tyler Chesser
- WS198 – previous episode
- The Chesser Companies
- TylerChesser.com
- Instagram – Tyler Chesser
- @TheTylerChesser – Twitter
- The Chesser Companies – Facebook
- The Real Estate Syndication Show – Facebook
About Tyler Chesser
Tyler Chesser, Founder and President of The Chesser Companies, works with individuals, partnerships and other entities on the marketing, sale, and acquisition of income-producing real estate including multifamily, retail, office, raw land and light industrial. Mr. Chesser is also an investment real estate professional, building successful partnerships in the multifamily real estate space.
Real estate acquisition and disposition can be a complicated endeavor. We focus specifically on our clients’ unique needs and goals through consultation, negotiation, and detailed transactional management. Additionally, we believe in the power of personal development and are passionate about helping our clients and partners succeed through a consistent life-changing regimen. Our goal is to create thriving clients and partners for life through outstanding results.
Tyler is an innovative & dynamic commercial real estate sales professional, a personal development thought leader, and a multifamily real estate investor with experience in international marketing, market research, & direct sales for global fortune 500 corporations. Recently recognized as a “Rising Star” 30 & under internationally in commercial real estate by CCIM Commercial Investment Real Estate (CIRE) magazine & one of the “20 people to know in real estate” by Louisville Business First, Tyler Chesser has become a nationwide leader in the income-producing real estate investment world. His uncanny grasp of market complexities, a deep passion & skill as a leader, & a mastery of investment analysis formed a perfect match in investment real estate. His unique approach of pragmatism along with a systematic personal development regimen set him apart from the crowd. Known to be an avid continuous learner, Tyler consistently reads a book a week and applies intelligent knowledge immediately in his business and his life.
A strong & principled negotiator, Mr. Chesser has a reputation for delivering expansive results for his clients & partners in each & every transaction. As a CCIM designee, his expertise equips his clients & partners to ensure their long-term success. Being a real estate professional with a background in marketing, property owners feel comfortable that Tyler will effectively garner substantial demand for their property through innovative marketing strategies. His commercial real estate brokerage expertise includes various asset classes such as multi-family, office, industrial, retail & raw land. Tyler is an award-winning pro, recently named the KCREA 2017 Multi-Family Broker of the year, and the KREE 2018 Exchangor of the Year.
To summarize, Tyler is results driven and exceeds expectations with purpose, persistence, and most importantly, integrity. Helping people design a life they are not only fulfilled by but excited for, is his number one passion.
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