Posted: January 4, 2017 by Eli Randel, Director of Business Development
SHORT & SWEET WITH NO FLUFF
No, that is not my order at Starbuck’s or my match.com header, this week’s blog is meant to be short, sweet, and sans any company fluff about why you should visit us at CREXi.com (although you should).
Having grown up and spent my whole career in the commercial real estate industry, I wanted to share some concise thoughts on why I love the industry and asset class:
- Low individual barriers to entry. Real estate investing requires no formal education or licensing requirements and while some areas of the business can be incredibly sophisticated, many concepts are very simplistic and intuitive. The result is a colorful and entrepreneurial culture full of unique personalities and personal stories.
- Diverse skill sets. Within one day you can exercise your finance chops and underwrite a complicated deal, exercise your marketing muscle and promote your newest project, or put your salesman hat on to win a new tenant. There are a broad set of skills which drive the industry;
- Instinct and intuition. While there are many sophisticated nuances, many of the concepts in CRE are intuitive. We all live somewhere. We all shop somewhere. These are not foreign concepts. Recognize that there aren’t enough apartments for rent in your area? Buy or develop an apartment building to capitalize.
- Control. Some of us don’t like the idea that unless we are an activist investor we can’t control the value of our equities investments (stocks). Further, the value is at the mercy of someone else’s control. What if the CEO gets caught in a scandal or retires sooner than thought? Most CRE professionals can still directly (attempt to) add-value to their investment or business.
- Real estate is a hard asset. Some people (myself included) don’t have the wiring to blindly trust an investment that can only be seen as numbers on a computer screen. Real estate is a real tangible asset you can drive by and touch.
- They aren’t making any more of it. I hesitated to include this as I believe this idea can sometimes be a trap. This notion does not mean values always rise and I think it’s underestimated how much untouched land there is. Additionally, technology has blurred the lines of physical and virtual space. However, the fact remains, the population continues to grow while land availability continues to decrease.
- Use of debt. Real estate is financeable whereas financing bonds or equities investments is a tricky business. Debt allows investors to lever returns, do more with less, and creates other industry opportunities (lender, servicer, appraiser).
- Other people’s money. The use of other people’s money (OPM) is an important component of the industry. Friends and family or institutional capital investors are always looking for avenues where they can find returns and are willing to pay fees and promoted interests to those who can access those investments. This allows investors to further lever returns and/or play in a greater arena than they otherwise could.
- It’s fun. For the restless like myself, it’s an industry that often revolves around meetings, looking at properties, driving, or getting a drink with other professionals. It’s a people industry that often puts you on the move as opposed to chained to your desk.
Tell me what I missed or share your thoughts @ email@example.com or 305.331.2881.
Eli Randel is Director of Business Development based in CREXi’s Miami office. Eli spearheads CREXi’s growth and sales throughout the east coast as well as overseeing the national sales team. Prior to joining CREXi, Eli was director of dispositions for Blackstone’s Invitation Homes. Eli has also held management positions and production roles with Cohen Financial, Auction.com, LNR and CBRE where he began his career spending three years in Investment Sales before leaving to obtain his Master in Business Administration from the University of Florida.