Commercial Lease Mistakes That Can Cost You $100K | Caleb David

Caleb David (00:00)
Because if I don’t have that, ⁓ and I can tell you, I mean, three years ago the market was rough. Twenty twenty two is my best year ever. Twenty-three came and it was nosedive into towards the end of twenty twenty five. I almost went bankrupt. and so

when you when you’re earning based on what you kill, right? So to speak, you know, it can be very hard and depressing to deal with rejection after rejection after rejection. Fail deal after failed deal after failed deal. And, you know, I almost went bankrupt twice in the last three years. So the thing I could control was me.

Joseph Crooms (02:07)
Hey everyone, welcome to Investor Fuel Real Estate Pros Podcast. ⁓ I’m your host, Joseph Crooms and today I’m joined by someone I’ve been looking forward to chatting with. His name is Caleb. I’m not gonna get into last name, but his is David, so that was very easy to pronounce and put into place.

⁓ he’s been making some serious moves in the commercial industry, but he said something to me that is unique. I’m gonna let him go into that a little more, but Caleb, hey, say hello to everybody.

Caleb David (02:40)
Hey everyone, it’s great to be here. Thanks for having me on the show. I’m super excited for this conversation.

Joseph Crooms (02:45)
Sounds good. I think our listeners are really going to take ⁓ something away from how you’re approaching your business. So ⁓ so let’s dive in. So first of all, for people who may not be familiar with your world, give us the short versions, ⁓ what’s your main focus these days and what that market ⁓ what that market are are you operating in.

Caleb David (03:06)
Yeah, absolutely. So I’ve been in the commercial real estate space for almost 14 years now. ⁓ actually my background is a nonprofit sector for about twenty years before I got into real estate. ⁓ you know, and you get burned out when you do a lot of social justice work. And so I was looking for a change. that something that I could do that I could still care and fund up fund organizations and causes that I care about. And commercial real estate just fell into my lap. And

I just I thought, you know, I was 35 at the time and I was just like, well, if I’m not going to do it now, I’m never going to do it. So I took the leap of faith, went for it, and you know, it’s ⁓ it it’s become something that you know most people think about commercial real estate as sales, as doing this, doing that, hitting the pavement, you know, having ego and all of that. And you know, I wanted to bring my experience from the nonprofit sector that really is taking that that posture of listening, learning, and understanding.

So that I could find connections to meet a need. And so I don’t consider myself a salesperson. I consider myself someone who creates space, someone who creates who builds community. And ⁓ like I said, I’ve been doing this almost 14 years. Started off as a part-time assistant and eventually got my brokerage license ⁓ and just jumped right in. After the first year, my peers in our city voted me as the rookie of the year. And then the phone finally started to ring. We were still coming out of a down market.

which I’m grateful for because I get to experience some famine on the beginning part of my career. ⁓ and so originally just started off doing mostly office, but now we’re doing land. We work with developers, we do medical, we do industrial, we do retail. ⁓ we’ve dabbled a little bit with multifamily as well. So and the reason why, because a lot of people, a lot of brokerages tell you you’re needing you need to pick a path, just office or just industrial. The challenge that I find with that

Is that right now we’re in a down office market. So if I was just specializing in office, I’d be suffering real even worse than I have the last three years. And and I also believe that understanding, you know, the retail market affects the industrial market. You look at COVID, you know, how much retail has changed. It’s gone from these big, huge footprints. I mean, there’s still some of those, but especially for the small local businesses they’ve had or medium sized businesses, they’ve had to reevaluate.

what they do. So now this retailer is shrinking down from three thousand square feet to fifteen hundred and they’re leasing a warehouse. And so I need to understand how these markets speak to each other so that I can best help help clients. So that’s kinda that’s kind of where I’m at right now.

Joseph Crooms (05:40)
Kayla, let me ask you a question. ⁓ you mentioned that you were very involved in the nonprofit sec sector. And you sh and you took advantage of going into commercial, but you develop a very unique philosophy. How has that philosophy helped shape your approach to business?

Caleb David (05:57)
Yeah, I mean it’s it it’s it it it’s very different. It it’s very it’s it’s not normal in this industry. And you know, it’s good to not be normal, it’s good to be different. ⁓ and I think the way that that shows up every single day is in the listening, it’s in the learning. It’s not I I don’t have a prescriptive answer for every client. Every client is different. I need to understand their goals. What you know, are they towards the end of their career? Are they starting out? So what are the resources that I can connect them with?

Because you don’t just go sign a lease. I mean, the current mayor of our city started off as a small businessman here, s decided just open up a coffee shop and a meeting place. And they signed a lease not realizing, because their broker didn’t tell them, that they’re required by the regional building department to have a grease trap. And ended up costing them over a hundred thousand dollars more than what they anticipated as a new business. So the way I approach it is I want my clients to walk into situations with eyes wide open.

I also tell them I’m not going to do make ask you to sign a deal that I wouldn’t sign myself. I’ve been an investor in real estate. I’ve been a commercial landlord. I’m in some investor groups as well. So you really what I’m bringing is a very unique ⁓ perspective from a brokerage standpoint. Because, you know, and I think another thing that I do a lot of is I do a lot of consulting for small businesses for free. I work through our local small business development corporation that’s part of the SBA. And so

We work with a team of people to help prepare people to go and and open a business. So ⁓ if I don’t think someone’s ready to sign a lease and I think they’re gonna crash and burn, I’m gonna state that. Not in those words, but I’m gonna let them know here are some other things that I think you need to do before you go and commit to something that you’re personally guaranteeing, you know, you’re putting your house on the line, you’re putting different things on the line. So the other part that I’m really passionate about is

is making sure that businesses have representation to make sure they make not just the smarter decisions, but also to minority communities that are often overlooked in commercial real estate brokerage.

I I strongly believe that the next wave of of great small businesses is in the minority communities. And a lot of brokers, you know, if they’ve hear an accent or something like that, they just don’t want to deal with it. You know, and so for me, I’m just like, hey, there’s Google Translate. There I can reach out to a translator if needed.

How do I show up for people in the way that, you know, again, it’s a golden rule, you know, how would I want to be treated if I was in that position? Because you are committing a lot ⁓ when you’re opening up business and and people don’t know what they don’t know. So if I can educate, if I can open their eyes, you know, I want to set them up for success. So, you know, in a few years when they’re ready for location number two, they have no hesitation to call me.

Joseph Crooms (09:31)
Caleb, on on educating them, and you mentioned something about the trap that the the guy was just unaware of which cost him a substantial amount of money. Yeah. How fluid or how much how many changes are happening in the real estate marketing that you that people may overlook because hey, I’m real say I’m gonna make money. But how do you make them hone in on those those things? And can you name a few of them?

that people may fall into a trap.

Caleb David (09:59)
Yeah, absolutely. I mean, you know, just because you see a property and you think it’s gonna be good for your business doesn’t mean that it is. You know, if if you are going into a place that is zoned for a restaurant and you’re wanting up a open up a car lot, those are completely two different zonings. So if if you go in and you sign a lease and the zoning doesn’t work and the city finds out, they’re coming to shut you down because you can’t operate that way and you’re stuck now in a lease that you are up

not only corporately, but personally obligated to. And so the a I ask people to be be curious. And I tell my clients all the time, if you have a question, you think it’s stupid, please ask it. Because I would rather you ask the question. I think the biggest trap is people have a sense of they they don’t want to come across as uneducated. But listen, we’re all uneducated in some things, right? And so I think the trap that people can get into is like, I just want to get my business open and I’m to do this and it’s a great idea.

And it probably is a great idea. However, you know, do you have the right funding in place? You know, are your financials in a place that a landlord’s gonna look at you if you’re leasing and say, Yes, you’re financially ready to take this on? Do you have a business plan? A lot of people get stuck in this trap of great idea, I think it’s gonna be successful. My friends told me it’s a great idea, and so let’s go. So I think a big mistake people make is rushing into decisions. and you know, you just it

Listen, the the I don’t wanna I I hate I wanna sleep at night. So I will and when it comes to education, I wanna be sure that people are making the most educated decision as possible and and realizing what resources are available. You know, for example, there’s a tool that we worked on for our city called Permit Partner. And so if s if someone a c someone who’s just a a general consumer and they’re like, I wanna open a coffee shop, I saw this building.

Well, you can go into this permit partner tool, and we’ve created in the city of Colorado Springs incredible tools and resources for people to make the barrier of entry less difficult. So you can go to Permit Partner on the city’s website and type in the address and say, I want to open a coffee shop. It’s going to pop up whether the zoning is going work for you or not. You know, a broker should be doing this for you, but in addition, if if people are doing the research, find out from your local municipality what tools are available. Talk to your small business V D C.

You know, they’re all over the country and they’ve got tons of free resources and training. they’ll help you build a business plan for free. There’s so much that is available that I I think the biggest trap people run into is not asking questions and also working with the wrong broker. Interview your broker, understand their experience. ⁓ even if they’re new, I don’t think that’s a problem. Work with new brokers. They need the experience, but find someone who’s asking you the right questions.

They’re listening to you. And I tell my team all the time, you know, you’re asking questions and you’re listening to what they have to say. Listen to what they’re not saying. And find out how you can then in turn ask a question so that they feel that trust. They feel like, okay, you’ve got my back. So I think, you know, just going with the flashiest or the most popular the, you know, broker or company is is not the right thing. Every personality is different. Every broker is skilled differently. So find the right, right broker.

instead of just in in just of just pulling the trigger. And this is a long answer. You know, if you’ve got a friend that’s in residential real estate and they’re like, I’ll help you with your commercial deal, that is a trap you don’t want to fall into. Unless they have extensive experience or they can show that they have someone above them that has experience that can help you through the process, then that is a really big challenge. It’s the same license in Colorado. So I can I can go into residential if I want to.

But I choose not to because I am not competent in that market, right? So ⁓ that’s a big trap that people fall into is I’ve got this buddy, I’ve got this friend, they’re in residential real estate, so I think that they’re gonna help me with my commercial deal. And more than not, it’s not the case.

Joseph Crooms (13:54)
Before I ask you the question of what’s been keeping your machine running smoothly, that philosophy, have you learned that through trial and error yourself?

What what betting your real estate person tell me a couple of questions that are key that you should ask.

Caleb David (14:44)
Yeah, number one, how long have you been working ⁓ in this industry? do you have Google reviews? ⁓ is your company reputable? Can you send me some references? ⁓ you know, there’s so much that you can learn, you know, from someone’s website. If it’s very corporate, if it’s very cold, you know, not saying there’s not great brokers in those companies, but I you need to ask questions of, you know, you know, how how

How do you approach looking at helping me find this deal? You know, what is your methodology? What is the process? Right. So many people just go into it and they ask a question and then they’re like, okay, then they become reactive. ⁓ well, what’s next? And then they panic, right? This process, it’s not easy, but it should be as smooth as possible. So I would ask them, what is your process? What does this look like timeline-wise, typically? ⁓ we can’t ever say definitely this is what it’s like. ⁓

But I would ask them, what is your process? What information do you need from me? And if they’re not asking you questions, then that’s a red flag.

Joseph Crooms (15:47)
Mm-hmm. Mm-hmm. Thank you for sharing that. So, the question, what’s been keeping the machine running smoothly? Your machine?

Caleb David (15:55)
You know, I would say to be honest with you, this is a it this is an industry that has a lot of ego in it. And it can be a very brutal industry. So a huge part of what’s making it run it smoothly at times, right? Because we can’t control everything, we can’t control the market, we can’t t control the Fed. ⁓ so what do what can we control? We can control ourselves. So for me it is about that consistent work of

you know, education, of looking for opportunity, of meeting with my therapist, with getting the help and the support that I need from my family and my friends and my community.

Because if I don’t have that, ⁓ and I can tell you, I mean, three years ago the market was rough. Twenty twenty two is my best year ever. Twenty-three came and it was nosedive into towards the end of twenty twenty five. I almost went bankrupt. and so

when you when you’re earning based on what you kill, right? So to speak, you know, it can be very hard and depressing to deal with rejection after rejection after rejection. Fail deal after failed deal after failed deal. And, you know, I almost went bankrupt twice in the last three years. So the thing I could control was me. There were days that I wouldn’t get out of bed till three thirty in the afternoon. Right? Like that’s the reality. So but I had the people on the friends and the therapy

And the support around me to help me say, take the next step, do the next right thing. And that’s what got me to where, and now things are flowing better. The market’s picked up a little bit, you know, and because we are so different, we’re starting to get a lot more inquiries, a lot more listings. This is all happening. So I think the thing for me is the biggest thing is identifying what is your mission, what is our why, and

How do we take what we value and what we say we value and filter every decision through that, even if we lose money, right? Even if you lose a deal, you know, keeping your values, your integrity, ⁓ is the most important. And so I tell people all the time, all we’ve got is our time, our reputation, and our experience. So those three things have to be in in line. And I think another huge part for me that helped keep my business running during the hard times is having the right business coach, having the right mentors.

you know, people that I could talk to. And so I recently made made the change from running my own firm to joining Keller Williams after a lot of research and a lot of asking questions. So one of the things that’s helped me right now to keep things running smoothly is tech. Commercial real estate agents don’t leverage tech and AI to the way that they should be. Because again, going back to all we have is our time, you know, we can use some tools like AI to

find answers out. I I’m conflicted when it comes to AI overall, right? But there are some things that have helped in that to help me streamline my systems, my processes. And you know, I had a meeting with my my Keller Williams coach just yesterday, identifying what do I need to do to make things run more smoothly. So part of it was changing how I ran my my administration, farming that out to someone else who’s doing it for much less than I it would take for me per hour to do it when I should be out there serving clients.

So I think systems are important. ⁓ I think also having the right team and the right leadership around you ⁓ helps make things run smoothly. And then just asking questions, what are what things are working for other people? ⁓ and and with a Keller Williams network, I mean now all of a sudden I can do deals or refer deals all over the country and all over the world. So it’s getting that access, getting that education, what’s not working, identifying those things, and then figuring out what are the solutions. And I think

A lot of that is is is getting the right coaching.

Joseph Crooms (19:37)
You know, Caleb, you thank you for being so transparent, s ⁓ and and talking about these things. Now every operator I know has a moment. You just sort of discussed that, just talking about, you know, your your two bankruptcy. Yeah. What things got real. Maybe a deal that went sideways or a time they had to pivot. Can you just pick out one of those incidents that you saw it coming h and and and describe what you saw coming and and how you handled it.

Caleb David (20:45)
Yeah, so one of the one the one that comes to mind first is it was this is right before COVID. I had a a client, we had three buildings under contract, over five million dollars. Then the the the trickle started coming in. These were industrial buildings. And I I told my client, I said, My gut is telling me where this is going is that you need to go ahead and complete the purchase, right? And this is

in the middle of we have no idea what’s about to hit us, right? And it it changed our world and it changed my world personally and and professionally. And so he had these buildings and I told him like, I feel like I you’re gonna make a lot of money off of this. And you know, I was also thinking this deal is going to help help float me because I don’t know what’s coming next, right? When are we going to get back, go back to the office? When can we do showings? How do we sell real estate? and he ended up choosing to cancel it.

and literally three years later, if he would have purchased that property, he would have more than doubled the value of it. And, you know, so that was definitely a big loss. But I think one of the things we have to realize in in real estate is that we can’t become too emotionally tied to an outcome. And, you know, we have to to trust that God, the universe, whoever you believe in, is going to provide for you if you are doing the right thing. And

That that was my client’s choice to let go. So in my mind, I had to say, okay, I know he’s wrong. However, it’s not my job to judge. That is his decision. I need to let go. And you know, the more you do this, the more it happens. And you know, over the last three years, you know, other examples were, you know, I’d spend six months to a year helping a client. We finally find the right property. We make an offer. I write it up, send it to them, and they said, We’re not moving forward. I I kid you not, that happened at least.

at least twelve times in twenty twenty three. You know, so you know, understanding that working harder doesn’t necessarily make you safer. It can actually run you down. So finding that work work life flow to where you can find those places to get re-energized, find those places to get filled back up so that you can come back and serve. I mean I those three years I was operating out of desperation, sheer desperation. And guess what?

That energy comes across, right? and so I think having to get myself to the place where I was like, Okay, if this is not right for them, then I have to let it go. It’s their decision, it’s their life. And so now what can I do to pivot ⁓ to to find another deal and another person to help?

Joseph Crooms (23:17)
⁓ I think that’s a tremendous answer and I and thank you for sharing that. And I hope our listeners let that sink in. So ⁓ that’s the kind of stuff that people don’t talk about, really, Caleb, because you know sometimes they hide they they want to be bigger than they are in sighting them, but but it’s that ego that can suppress that greatness in them. You know, whether you agree or not, that’s just what I think.

Caleb David (23:33)
Yeah.

Yes.

I

agree.

Joseph Crooms (23:46)
Yeah, and so honesty it’s what separate folks who just dabble from the ones who stay in the game for the long term. You’re a long term play player. So let me ask you this. What are you focused on solving or scaling next? What’s your next real goal for

Caleb David (24:03)
you yeah for me my my goal is to continu to to recover from the last three years and create

a commercial real estate team that is respected, that is known for its integrity, known for its expertise. And I I just brought on a new broker ⁓ about three weeks ago, and I’ve got two more that I’m working on. And so I’m focused on how do I onboard them correctly. That’s one other thing I love about Keller Williams is the the ability of the training ⁓ and and the personality testing and all of the things.

That because I I I’m not a corporate guy. You can probably tell that from me. Right, right. So it so it took finding the right team, the right market center. ⁓ and so I’m focused on what are the resources that I have at my fingertips to develop other people. ⁓ I think I’m a natural-born learner and a natural-born teacher, and I love sharing my knowledge. And so right now it’s really focusing on how can I develop other people, you know, because I’m not gonna be doing this forever. I’m in the mid part of my career.

You know, so how do I raise up the next generation? And also focusing on bringing representation into commercial real estate. In our market in Colorado Springs, there’s very, very few women. There’s very, very few people of color. I’m probably the the most person of color in the industry right now. And so because I I I want to develop that and focus that so that some of the things that I care about, like the nonprofits that I support, the boards that I’m on, ⁓

You know, I used to run my own nonprofit, so I’ve been all over the world, but it’s been a long time since I’ve got to travel, you know. So I’m focusing on how do I get to do those things that that make me come alive so that I can come back passionate, I can come back ready. and and how how do I build my business in a way that I can support community ⁓ and support the causes that I care about. And one of those is Crazy Love Africa. They’re based here in Denver. They work with women with HIV in Uganda and educating their children.

⁓ with the cuts with USAID that have happened earlier. I mean it’s completely destroyed access to these meds, you know, and and and educating people even in what is HIV, what is Africa, what is how do we take, you know, the knowledge that we have, you know, there’s such a stigma around things like that. So, you know, we support and ⁓ become sponsors of the gala whenever we can, we donate where we can. So

All the things that I’m doing right now are are geared towards how do I move myself into the life that I want to live. Because I I’ve worked my butt off my entire life since 15 years old. You know, I’ve pretty much worked full time. And, you know, so I want to get to as my kids get older, I want more time with them. And as I they they have grandkids, I want time with them. ⁓ and so so that those are things I’m working on to to move towards the goals that I have. And ⁓ you know, it takes hard work.

And it takes help and it takes humility on my part to ask questions and get insight for other people who’ve done it before and make those hard decisions and take some risks.

Joseph Crooms (27:00)
know, ⁓ you got a few things in place already. ⁓ first, a good spirit. I I I love the energy, the spirit and the sincerity ⁓ in place. ⁓ that next move can either compound things or create chaos for your dreams. ⁓ and and how you play it. Yeah. Now I’m so I know a lot of people listen or ⁓ either early in their journey or looking up to level up.

And I think that they’re benefit from hearing this. When it comes to building relationships and growing your next network, what’s made the biggest difference for you?

Caleb David (27:36)
I think not having an agenda. You know? ⁓ I think because you go to these networking things, and I stopped going to them years ago. Everyone’s just handing out business cards, you know, like there’s no authenticity. We all know we’re here to make money, right? And so I think, you know, when you go into relationship building, when you go into these networking things, find places that are not like forcing results. You know, the there’s

networking groups out there where they’re like, you have to come back with three referrals. You got to do this. Listen, like, I’m not a salesperson, you know, and I think you and I talked about this before we got on, is, you know, I never saw myself in sales, but I am. But I’m not a salesperson. I’m a person who listens and I’m a person who says, if I’ve got something that I can bring of value, then I will share it. If I’ve got a connection that will help this person it doesn’t benefit me, why not connect them? Right.

⁓ so I think it’s about a little bit about being selfless and and and not having a poverty mentality. And so I think as you go into these things, you’re going in to listen. You’re not going in to get a new contact or a new client. You’re looking to build a new relationship to find out what are their pain points? Are there resources that you have that you can share with them? Point them in the right direction for nothing. I mean, I I tell you know, lenders all the time, I tell

⁓ you know, different people in the industry around me. And I think commercial real estate, it’s really important to understand who are all the players that play into a deal. Build relationships with those people, again, not with the intention of getting something out of it. But you know, I get I get referrals from lenders all the time that said, This person needs your help. I need you to jump into this deal. Because previously I’ve helped clients of theirs evaluate their lease, find out what is the next best step for them. Should they consider purchasing?

You know, do they need an attorney? What are the different things that I can just provide for free and bring value to someone without expecting anything in return? So I think, you know, it it’s a longer game, right? but you know, and and people that are pushing in sales, they get sales. They they succeed, right? They they go to all the rah rah conferences and things like that, learn how to manipulate people or whatever. But I think you you you go back to what you even talked about is is your ego.

Like what what am I in this for? Why am I doing this work? If it’s just to get a paycheck, then you’re probably gonna burn out pretty quick.

Joseph Crooms (29:54)
Caleb, ⁓ this has been office. I I’m a man of faith and a lot of people do not believe this, but if you do the right thing, it it’s gonna come back for you. For me and I’m so glad that you endured ⁓ through that that that COVID period and you have come out on top. I I I can feel it, I can see it, and I I I just enjoy your realness that you brought to our compass to our podcast. Thank you.

So ⁓ so you can’t fake these relationships in in every in any space. Sooner or later somebody’s gonna say, This guy he he faked me out or he he wasn’t the genuine person. So ⁓ all right, so before we wrap up, if someone wanted to reach out to you, yeah, connect with you, maybe collaborate or learn more ⁓ what you’re doing, what’s the best way to reach you? I’m gonna ask you to say it two times.

Caleb David (30:51)
Absolutely. So a few ways that you can do that. And there’s a few reasons you should. If you’re whether you’re in the state of Colorado or not and you just need some direction in commercial real estate, whether you’re a business owner, I’m happy to have a conversation with you. No charge. You know, ⁓ if you’re in Colorado and you’re looking for help for listing or whatever, great.

If you are just curious about getting into brokerage, what does that look like? You know, we need good brokers in our in our all across this country, right? We need people that are wanting to make a difference and not just make a paycheck. So they can reach me several different ways. You can find me on Instagram at instagram.com slash calebdavid. Again, that’s instagram.com slash calebdavid. You can reach me by phone at our office at 719-345-5525.

And that again is 719-345-5525. You can email me directly if you would like. And it’s just Caleb C A L E B at David Commercial.com. And it’s just [email protected]. You can go to our website, which is also davidcommercial.com ⁓ Facebook as well, facebook.com/calebdavid Same for LinkedIn /calebdavid ⁓ so pretty straightforward. Put in whatever platform /calebdavid, you’re probably gonna find me.

you can also reach out to us through our website, but these other ways are probably a lot quicker for for you to reach out to us. And you can also check out my podcast, which is called Commercial Real Estate Unfiltered. ⁓ and then I also encourage people, because I’m an advocate for Crazy Love Africa, go check out the incredible work that they’re doing, their fair trade market. ⁓ find a way if you want to sponsor a kid, sponsor a woman, if you’re a business, you can do a microgrant.

that will get a woman on her way to being fully sustainable ⁓ and supporting her family. And that’s at CrazyLovafrica.com. Again, it’s crazylovafrica.com.

Joseph Crooms (32:40)
Perfect. Well, listen, I appreciate your time. Your story. It says perspective here, but I like to say your your passion. It it it comes through. We need more people in in in the space who are doing the right thing. Thank you again for being here, Caleb. So ⁓ as for those of you tuning in, if you got some value from this particular podcast, as I believe you have.

Make sure you do subscribe. ⁓ we got more conversations coming from other operators just like Caleb, David, right? ⁓ and who are out there building real business and have the same passion and the sincerity just for this episode. ⁓ just for what we’re doing here at Investor Fuel Real Estate Pros Podcast. So thank you so much, Caleb. Say bye to everybody.