I always wondered what it would be like to live in California, ever since my first visit in 1995. I was in awe of seeing mountains with snow on them from the backyard of a friend’s home in Pasadena, while it was over 90 degrees where I stood. The most scenic place in the country made an impression on me but hey, I was only 16-17 years old. After law school, the opportunity to relocate presented itself in the form of self-employment and no longer owning a property. I short sold my properties while I was in law school full-time and still working my business on a part-time basis. I also researched and found out some of the largest commercial real estate developers in retail and residential were based in California and stumbled upon the USC program I was accepted in, which sealed the deal.
Now prior to 2013, I had done a few commercial deals in Detroit, which included selling a bar, an auto repair shop and a few vacant buildings here and there. These transactions intrigued me because unlike residential real estate, the decisions were made mostly based on numbers and a little less emotion. I was hooked! I applied to several commercial brokerages to no avail. Even though the mortgage crisis affected housing, it also eventually hit the commercial real estate world in the form of retailers and businesses closing and downsizing, so that meant less opportunities for a newbie when the veterans were holding on for dear life.
The picture above is one of the first photos I took when I arrived in California. I landed in Orange County without a place to live or steady income. This picture was taken at Newport Beach by my sister who came along for the cross-country ride. I had 2 months before my son would join me in California and the beginning of the new school year. So I had to hit the ground running. I was still of the mindset that I would leverage my law degree to land a position with a commercial real estate company and learn their model. I kept doing real estate in Michigan with the assistance of my wonderful agents but business was definitely slow. The grace and favor of God was on me, I found a townhouse in Anaheim Hills with awesome schools and was offered a job with an Asset Management company (after several interviews) in 14 days. The position was not in commercial real estate but in Foreclosure! Yikes! After almost going through a foreclosure myself and defending foreclosures for low-income individuals…I felt like a traitor. But I had to do what I had to do. I was not only living in a beautiful new State but an expensive State!!!
In the interim, studied and became a licensed real estate salesperson and notary in California within 4 months and began to set my sights on the bar exam. I took the position in stride and it exposed me to how financial institutions work, bulk REO sales (foreclosures) and a whole other specialty in real estate that I never gave any thought to, Non-performing Loan investments (NPL). NPL or Note investing is a way to invest in real estate without actually owning the property. Note investing can be done with commercial and residential paper (mortgages). You essentially buy the debt that is attached to the mortgage and you become the bank! This is what my employer did on a grand scale in addition to servicing loans for other lending institutions. I started researching this process and learned that the everyday person could do it as well. I tried to introduce it to some of the investors I was already dealing with and one of my clients even paid for me to attend a Note Conference in Las Vegas to learn more. This is an area that a lot of people are not familiar with and therefore don’t touch because they think it’s too complicated. Once you set up a system, in my opinion, it is actually less arduous than being a landlord and dealing with property, but we know how fragile the lending world is, nothing beats owning the land long-term.
Now that my mind was blown by this unfamiliar form of real estate investing, I was even more eager to get into commercial real estate. I did not complete my enrollment in the USC program because the schedule conflicted with work. I was too new on the job to ask for multiple days off every week for 10+ weeks, so I had to get more education another way. I began researching minorities in commercial real estate in my area in order to reach out to them for insight and found the Real Estate Associate Program in Los Angeles. “REAP (Real Estate Associate Program) is the commercial real estate industry’s leading diversity program bringing the country’s most talented minority professionals into the world of commercial real estate.” Hallelujah, Hallelujah!! This program is offered all over the country. I will do a separate blog about the upcoming Atlanta class.
This 10-week program was held in Santa Monica…an hour drive on a good day from Orange County. Sigh! Once again, I had to figure out how I would make it to this class twice per week and ensure that my son is fed and cared for. We worked it out though and special shoutout to my classmate, Cornel Benford II, who I carpooled with and he never let me drive. No problem. LOL. My son even came with me on some days.
This experience opened my eyes to the heavy financial aspect of real estate. I learned that it’s almost more about the financials than the property itself. The class afforded us opportunities to be taught and do case studies by one of the most successful black residential developers in LA, Charles Quarles of the Bedford Group and he even hosted a party for us at his beautiful home. We also learned from the real estate executives of the country’s leading mall developers such as Simon, Macerich, Caruso Affiliated, and Westfield. We toured some of their facilities as well…I will never look at a mall the same way again.
One of the most interesting presenters were the McDonald’s and Wal-Mart executives. McDonald’s had a team of women and the company at one point owned the most real estate in the world. Wal-Mart even had positions set aside for the graduates of the program, that’s if you wanted to move to Arkansas. There were also several instructors who specialized in Multi-Family, Office, Industrial and Land. Participation in this class, provided us with memberships in the industry’s trade organizations and believe me these memberships cost thousands of dollars. I was a member of ICSC: International Council of Shopping Centers, Urban Land Institute, Building Owners and Managers Association, and NAIOP|Commercial Real Estate Development Association . The whole experience culminated with the mother of real estate conferences, ReCon, which is a GLOBAL conference hosted by the ICSC in Las Vegas.
There weren’t many people that looked like me at this conference. I also noticed from my own unscientific poll that most of the minorities worked in property management. No knock to that genre but I want to be on the deal making and development side.
REAP provided great networking and insight into the different opportunities within the commercial real estate industry. My west coast experience further motivated me to want to get in the game of Commercial Real Estate.