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Show Summary
In this episode of the Real Estate Pros podcast, host Michelle Kesil welcomes Cedric Ferrell, a Southern California real estate entrepreneur and founder of a growing brokerage. Cedric shares his journey from a 25-year career in the Fortune 500 sector to establishing his own commercial real estate business. He discusses the various arms of his brokerage, including investment sales, leasing, and property management, emphasizing the importance of understanding investor motivations and the fundamentals of real estate investment. Cedric categorizes investors into three types: Disneyland investors, trophy investors, and intentional investors, each with distinct motivations and approaches to real estate.
Resources and Links from this show:
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- Investor Fuel Real Estate Mastermind
- Investor Machine Real Estate Lead Generation
- Mike on Facebook
- Mike on Instagram
- Mike on LinkedIn
- Cedric Ferrell on LinkedIn
- Cedric Ferrell on X
- Cedric Ferrell on Instagram
- Legendary ICA on Facebook
- Cedric Ferrell’s Phone Number: (949)446-7147
- Cedric Ferrell’s Email: [email protected]
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Cedric Ferrell, Legendary ICA (00:00)
The ones that seem to be the least emotional, and I’ll look at it that way, the least emotional.are what I would call the intentional. And a lot of those intentional ones, which is good for our business, are the larger type investors. The main street or the mom and pop investors tend to be more into the other side of the equation from Disneyland or the trophy type of investor.
Michelle Kesil (01:56)
Hey, everybody. Welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil. Today, I’m joined by someone that I’m looking forward to chatting with, Cedric Ferrell, who is a Southern California real estate entrepreneur known for blending strategic insight with hands-on market experience. He’s the founder of a growing brokerage. So excited to have you here today, Cedric.Cedric Ferrell, Legendary ICA (02:20)
Thank you for having me here. This is a great opportunity to share what we’re doing and also learn about what’s going on in the industry.Michelle Kesil (02:27)
Yeah, absolutely. I think our listeners are really going to take something away from how you’re approaching your real estate company, especially the commercial aspect. So let’s dive in.First off, for those not yet familiar with you and your work, can you share what your main focus is?
Cedric Ferrell, Legendary ICA (02:46)
Our main focus from a macro standpoint, I own the brokerage that has a variety of arms in it. My day in and day out focus is on the commercial side of the business. The commercial, I like calling it a subway, but basically the franchise itself is very commercial. And there’s about 65 of us around the country. The primary focus in the service that we provide here out of this office is investment sales, focusing on the retail side.the industrial side, and we also do leasing for retail and industrial. My brokerage from a overall standpoint, we have a general manager that has several agents that focus on the residential side, and then we also provide property management for both residential and commercial. And then somehow in between there, I figured out how to coach agents through a couple of different coaching agencies around the country.
Michelle Kesil (03:41)
Awesome. So how did you get started in your real estate career and get to where you are now?Cedric Ferrell, Legendary ICA (03:48)
That’s a great question. I spent over almost 25 years or so in the Fortune 500 arena, working with different companies from PepsiCo to Mars to Pillsbury and worked in a variety of places around the country. I eventually moved to working for an entrepreneur and that worked out great. And then I got hired back into the Fortune 500 world. And that was in my early mid forties.by then and it just didn’t work out. And what I realized is it didn’t work out because of the impact or the efforts or the approach that I took. It didn’t work out because that’s a different direction that the company wanted to go. So what I did was took a step back and decided, do I want to work in an industry or do I want to take control of what my future looks like? And I looked at a variety of things, real estate kept working its way to the top. I talked to a lot of
different individuals. I have had a friend that had a brokerage for over 40 years. And I told him, look, I want to get into real estate, but I only want to really want to do it if I can come in under your brokerage and learn under you. And that’s how I got started in into real estate. Did well there. He had more work than he knew what to do with. And I had more energy than than most of the folks in the office. So we did quite a bit of work. And then I eventually moved over to a larger brokerage and ⁓ worked in that arena.
trained some agents, started the commercial group. And now, like I said, about six years ago, I bought a commercial franchise. And now we have that business and we offer a full suite of real estate services. So that’s how we got there. ⁓ All of this kind of transpired over the last almost 15 years or so.
Michelle Kesil (06:26)
Amazing. Can you expand on the commercial services that you’re currently offering?Cedric Ferrell, Legendary ICA (06:32)
Sure, absolutely. And thank you for asking that. ⁓ When I say investment sales, a lot of folks don’t understand or have a real clear idea of what that is. And I kind of overlay this with my education and also with the Fortune 500 arena in that anytime that you invest a dollar, and I’ll use the word invest with a capital I, you expect to get some sort of return on that dollar. So.The approach that we take from a commercial real estate standpoint is if you own a shopping center, you’ve invested in that. You’ve ⁓ basically wrote a check for a certain amount of money. And based on that check that you wrote, you expect to get income from that. You’re definitely going to have expenses that go along with it. And then you’re to have some sort of profit. And that’s what our primary focus is on, is what’s the best return that you’re going to get on that check that you have.
I like to use this analogy as if you put together an avatar of what an investor looks like and who the folks that we best serve. I kind of put them in three different buckets. There’s one avatar that I called the Disneyland investor. And from all three of these, the key factor is that there’s a level of motivation that has to trigger being able to provide the services that we do. So whether it’s
any one of these. I’m not saying one is better than the other, but there’s definitely the thing that’s most important is having a motivation. So the Disneyland investor basically invest in a property and they want to be able to get enough income from that that they can go to Disneyland and take their family where they want to go, when they want to go, whatever type of vacation they want to have. I like using Disneyland because if you have kids, Disneyland is kind of the mecca.
for being able to do, whether it’s Disneyland itself, whether it’s Disney World, whether it’s Disney Cruise, you won’t have enough money to be able to do that comfortably whenever you want to, it goes along with it. And so that’s one investor level that I look at. Another investor level that I look at is what I call the trophy investor, if you will. This investor is not as interested or not as concerned about the return that they’re gonna get on their investment because there’s…
a lot less risk that goes along with it. This is the investor that buys the Starbucks. This is the investor that buys the Raising Canes. This is the investor that buys the Triple Net Chick-fil-A, where they know they’re gonna get a fixed return, whether it’s four and a half, five percent on that return that they invest, but they can drive by that property and say, own that Starbucks, or I own that Raising Cane. That Raising Cane over there on Main and 12th, I own that. That’s my building there.
And that’s what I call the trophy investor. They say there’s no good or right or wrong. It’s just a level of motivation that goes along with that. Then the other motivator or the other level of motivation or the other level of investor that I consider is what I call the intentional investor. And if you talk to brokers across the board and some of the people who have been listening to this podcast, a lot of them look at themselves as intentional investors, meaning that
I wrote a check for a hundred bucks. I want to get 108 bucks back at the end of two years, three years, five years or so. And I’m going to do whatever it takes in order to make sure that that dollar works as hard as it can so that I can get my dollar in eight cents back as it goes along with their dollar eight, whatever the return factor is. And some have a higher return in that requirement. Some have a lower return, but the primary focus is getting a return on that dollar. So if you go back to
What we do, you focus on the income, you focus on making sure that the vacancies and whatever other things that are going to mitigate the income are managed. And then you focus on the expenses to provide the highest net operating income that’s possible. And that’s what we talk about. And that’s what we sell along the way, whether that’s a selling of the property, helping someone invest in a property or for leasing a property. It’s the same thought process.
How do you get the best return for your dollar?
Michelle Kesil (11:27)
Yeah, amazing. That makes sense. But there’s those different categories and levels. And are you supporting all of them or is there one particularly that you’re serving?Cedric Ferrell, Legendary ICA (11:38)
Well, we serve all of them in the ideal world. We really focus on the motivation for each of them, because in the arena that we operate, there’s assets that fit into each and every one of those categories. And as I said before, the majority of the folks, if anyone would raise their hand, they would say that they want to be an intentional investor, meaning that I want to get the most I want to buy the lowest cost property.and get the highest return on it. But that’s just hasn’t been our experience. And the hundreds and hundreds of investors that we talked to, I kind of put them in those buckets. And there’s different variations of those buckets that go along with it also, because things have worked out well for them in some extent or haven’t worked out well. So we provide services for all of them. They said there’s none better than others.
The ones that seem to be the least emotional, and I’ll look at it that way, the least emotional.
are what I would call the intentional. And a lot of those intentional ones, which is good for our business, are the larger type investors. The main street or the mom and pop investors ⁓ tend to be more into the other side of the equation from Disneyland or the trophy type of investor.
Michelle Kesil (12:59)
Yeah, absolutely. And are you supporting these investors and helping them find the commercial properties that are best for them? Or what does the process look like when they come to you?Cedric Ferrell, Legendary ICA (13:13)
Okay, the approach that we start with, I won’t say 90 % of time, but a very high percentage of the time is to help them sell their properties and then acquire additional properties to go along with that. the approach that we start with really starts with the valuation idea as to what do you have to sell? And so if you start with that, what do you have to sell? You have an asset, you have five tenants in it, the tenants are paying X amount of rent.the leases are due in this timeframe or this date. And then this tenant here is a national tenant. This tenant here has been there for 15 years and they got a kid going to USC so they aren’t gonna be going anywhere anytime soon. They actually are gonna buckle down and operate their business. And then you have a different type of business there. So as you take all of those, that pot of…
of opportunity that you have there. What we do is we help them come up with what a value is for that because it may be time to sell. Whether let’s just use the intentional investor. It may be a time where now they’re not getting the same benefits that they started with from a depreciation standpoint. The return on equity is lower because the rents are lower and it’s time for them to get a higher return on equity.
It’s a little more difficult now that interest rates are higher. So the math doesn’t math as much. But once we have that asset that’s listed, then we go out and as you say, work to find other investors that fit into that category. That goes along with it. So it’s a matter of, ⁓ for lack of a better word, a matchmaker within the marketplace itself so that we have a pool or what I like to say is a grid of properties that fit into that. And one of the key things that’s important
from our standpoint is to understand and know what the market is and know who the players are in the market itself.
Michelle Kesil (15:14)
Absolutely. And when you say knowing who the players are in the market, what does that mean?Cedric Ferrell, Legendary ICA (15:22)
What that means is that there’s a pool of individuals and let’s just use a real world example.A real world example of an industrial property that I sold. And we realized that there were, within this industrial park, there were several properties that were owned by the same individual. So we know that that property there would probably be attractive to them if it became available. So one of the first phone calls that we make.
And it’s, hey, did you know that the property at 1313 Lockingbird Lane around the corner now is available so they can add to their portfolio. They’re already in the area. They understand the risk factors that go along with the area. They understand the client base and the customers and the other tenants that are in that property. we ⁓ would consider them a player within that industry or within that marketplace itself.
And so, we were able to do that going back to the real world example, we got an offer in two days. Like, ⁓ that’s available? I’d love to have that. Can I make an offer today? Yeah, one of those things.
Michelle Kesil (17:14)
Amazing. And so what are you most focusing on solving or scaling to next in your business?Cedric Ferrell, Legendary ICA (17:23)
I’d start with scaling and my main focus on the scaling front is to add more agents within our brokerage itself. And it’s a lot less friction, if you will, to add residential agents and then be able to leverage that. And so the linchpin for that was I brought a general manager on board. He has a long history of working with other agents, teaching other agents and coaching other agents. So that’s a big part of it.And now it’s just a matter of adding other agents under him from a matter of scaling itself. We’ve worked within this industry for quite a while. And I kind of gave you the example of who the investor prototypes or avatars are that are out there. We’re looking to work with larger opportunities going forward. And so we’ve kind of.
grown our way into talking to the owners that own the $10 million, the $15 million, the $20 million opportunities versus the ones that are smaller than that. The older we get, and we knew this when we were eight years old, but it’s still, there’s 24 hours in a day. And if you’re going to spend your 24 hours in a day and you have a house and you want to go on vacation and you have a car, I don’t know if you know how much cars cost nowadays.
you have a car, you want to go out to dinner once or twice, you need real income here in Southern California to be able to do that. And so if I want to maximize my 24 hours in a day, I’ll just work on those opportunities that are able to provide a larger opportunity that goes along with that. And so that was a long answer to your question, but bigger opportunities and more people.
Michelle Kesil (19:09)
Yeah, amazing. Why are maybe some advice that you would give to investors that are earlier on in their journey and just starting out?Cedric Ferrell, Legendary ICA (19:21)
Great question. And the advice that I lead with and start with actually used to, for several years, host investor seminars. And that is to really focus on the fundamentals versus what I’d say the emotional side of the equation. And once you have the fundamentals, and what I mean by that again is understanding what the income levels are or required to go along with it. How do you get a loan that goes along with the property?How are you gonna attract customers to be able to pay the loan? Because the first thing that you have to be able to do is ⁓ have, especially unless you’re paying cash, is to be able to convince the bank to give you a loan. And the only reason the bank is gonna give you a loan is because they feel that they’re gonna give your money back. And a lot of investors take basically the point of view, this is what I wanna do, so I’m just gonna go do it because they feel that it looks a lot easier on television.
and what it does in real life. And so we’ll take an investor, we’ll sit down, we’ll look at the fundamentals. If they say, well, I like, you know, this gelato concept. Well, what do you like about the gelato concept? And then focus on the business aspect of that versus I like the way that it tastes or I really like the pistachio gelato or I’m good at making pistachio gelato. ⁓ One of the things that I used to sell franchises in between
the corporate roles, there’s a book by Michael Gerber and it’s called the E-Myth Revisited. And what I do with investors, what I do with agents, is I have all of them read that book, the E-Myth Revisited. And really, and this is the attraction thing that we use for our agency also, and that is to really focus on the systems and the models that you want to be able to do. So if you want to…
have a business, it’s gonna be a catering business. What are the systems and the models that go along with that versus I like cooking and I like setting nice tablecloths up and things like that and talking to people. It’s really focusing on the systems and the models that’ll get you to where you wanna go. I’ll give you a quick story on that. When I sold franchises, I had a guy who was an engineer from Ohio State University came into the office and said, I wanna make the most amount of money with the least amount of work.
whatever franchise you have that fits that, that’s what I want to be able to do. And he had an open mind to his credit. And what we came up with, believe it not, was a check cashing opportunity. It was a check cashing business. And he looked at it. He looked at what went well, what went wrong. He said, I’ll take it. And then within two years, he was one of the top producers. He bought another location and went off to the races. 20 years later, he’s still in business because you look at the model.
of the business of what he really wanted. He really wanted something where he didn’t have to do that much, but he could get a high return on it. And that’s the same with whether it’s, you know, business like that, or whether it’s buying a property that goes along with that. You really got to find out what that model is and whether or not it’s scalable. If you want to be the next big real estate mogul, you really got to figure out, you know, how do you get there and look at, you know, how it scales.
And if you want to just own that one because it’s next door to where mom lived when you grew up, you still want to be able to get the loan and pay the loan and be able to provide a property or shelter for whoever is going to live in it.
Michelle Kesil (22:56)
Yeah, definitely. That’s important.So before we wrap up here, if someone wants to reach out, connect, learn more. Where can people find you and connect with you?
Cedric Ferrell, Legendary ICA (23:06)
You know, I always tell people I’m one of the easiest people that you can find. I think my name is here on there. I’m on LinkedIn is probably the most efficient way to get me because I respond to LinkedIn quite a bit. And that’s just my name at Cedric Ferrell on LinkedIn. And you’ll find me there. I’m on Instagram at Cedric L. Ferrell. You can find me there. And my email address is [email protected]. You can find me there or you can give me a call.⁓ and the phone number, ⁓ direct line is 949-446-7147. That’s 949-446-7147. Easy to find. And I do return calls. I do return texts. I do return voicemails and emails and all of those things. I may or may not be able to help you, but I’m easy to find.
Michelle Kesil (23:59)
Perfect.Cedric Ferrell, Legendary ICA (23:59)
And also, you know, I mentioned that I own the franchise and there’s 65 of us around the country. We have an office in Poland. We have an office in Australia. I can help people all over the country with the other offices that we have. I’m working on an opportunity right now in Arizona, even though I’m sitting here in California.Michelle Kesil (24:18)
Amazing. Well, I appreciate your time and your story. Thank you for being here.Cedric Ferrell, Legendary ICA (24:23)
Thank you for the opportunity to share the story.Michelle Kesil (24:25)
Of course. And for the listeners that are tuning in, you got value, make sure that you have subscribed. We’ve got more conversations with operators like Cedric who are building real businesses and we’ll see you on our next episode. -
