How Commercial Real Estate Brokers Turn Commissions Into Property Ownership

Ben Nolte (00:00)
And so at the end of the day,

the seller didn’t do the right thing and apply those debt service payments to the sale price. And so so because of that, you know, my clients walked away from that building and a fair amount of tens of thousands of dollars in debt service payments they’d made. and then we went and bought another building. So sometimes the best deal is the one you don’t do. and sometimes it’s better to walk away

you know, instead of having good money chase after bad, they they say that you’ll do more to keep from losing twenty thousand dollars than you will to earn twenty thousand dollars. And so I think for for these business owners and investors, my clients, the right move was to walk away from from those funds.

Joseph Crooms (02:20)
hey everyone. Welcome to Investor Fuel Real Estate Pros Podcast. Today, my name is Joseph Crooms. I am your host. Today I’m joined by someone I’ve been looking forward to chatting with. His name is Ben Nolte I’m not sure if he’s kin the Nolte, but he’ll talk he’ll talk little bit more about that.

Serious moves in this industry in New Mexico, but I’m gonna let him bring that out at during the interview. Hey, Ben, say hello to everybody.

Ben Nolte (02:47)
Joseph, thank you so much for having me on the show. hey everybody, Ben Nolte, CCIM industrial and land advisor here in Albuquerque, New Mexico. Nick Nolte is a fourth cousin I’ve never met. I I actually I I would say I’m an E list actor. I I’ve done some independent films and and small, you know, small parts. And I was on the same show, Graves, that he filmed here, but he was not filming that day, so I didn’t get chance to meet him. So

Nick, if you’re out there, hit me up.

Joseph Crooms (03:15)
Love it. I think our listeners are really going to take something away from this approach, how you’re approaching business, especially in the New Mexico area. So let’s dive right into it. So, first of all, for people who may not be familiar with your world, give us the short version. What’s your main focus these days and what market you can elaborate up in are you operating?

Ben Nolte (03:37)
Yeah, no, thanks, Joseph. I focus on specialize in land and industrial real estate here in New Mexico. I really enjoy working with blue collar kind of salt of the earth people. I think in from an investment standpoint, industrial’s been kind of the bell of the ball for the last, I don’t know, probably since twenty nineteen. and so I I think it’s really good opportunity for a lot of folks in in that regard. So

Joseph Crooms (04:03)
When you talk about investing in New Mexico, what is it like actually doing industrial or commercial investing in New Mexico? You know, w how do you how do you approach business?

Ben Nolte (04:14)
Yeah, you know, so New Mexico, there’s probably about two million people here and there’s a a few monikers for the state. Land of enchantment, land of mañana. I would say it’s it’s pretty laid back and and kind of slow to adapt. So I think there’s a lot of opportunity for folks maybe that are familiar with other markets, see other trends, to then come into our market and do some investing here.

our rental rates aren’t where they are in other markets per se. And so just make sure that you’re whether it’s this market or any market, working with somebody that is familiar with the market. So I don’t have, you know, California glasses coming here thinking I can get California rents only to find out, hey, we’re we’re in New Mexico. So

Joseph Crooms (05:46)
And and what type of commercial properties have you basically been building or investing in?

Ben Nolte (05:51)
Yeah, so so industrial real estate. and really I I guess if you break it down, there’s different categories or subcategories of that. I would say Flex Warehouse or Small Bay Warehouse. you know, so one of the projects I I bought with two other partners. in fact, they were gentlemen I used to work for. They continue to have their own investment and development company. it was fifty thousand eight hundred feet. There’s sixteen tenants in there. the the

Upside to that was and I don’t know how technical your folks are, or if they’re familiar with the difference between modified gross versus a triple net rent. A modified gross essentially, as a tenant would see it, is they make one payment amount, they know what that amount is. you know, outside of annual increases, it doesn’t go up. A triple net lease takes into account taxes, insurance, property management fees.

if there’s maintenance, landscaping, et cetera. And so you’ve got a base rent number, and then you’ve got these operating expenses or triple net expenses in addition to that. So there’s a little bit of uncertainty from a tenant perspective as to what their payment ultimately is going to be. And so I say all that to say when we purchased this complex, all of the leases were modified gross, meaning the owner or landlord was eating all the expense increases.

But they were below market even at the modified gross rate. And so over time, what we did was we converted those to triple net leases as new tenants came into the project. and then as well, slowly over time, we increased the rents. You know, we didn’t want to save for one person we weren’t too excited to have as a tenant. We didn’t jack their rates up, you know, so we kind of brought those up slowly over time. That also

gave us some time to get familiar with the project, get a handle on it, continue to earn some cash flow. And essentially at the end of the day, all of those leases are now triple net leases. And and so just from a net operating income perspective, we’re making more because we’re not paying all of those expenses out of our own pocket pocket.

Joseph Crooms (08:02)
What is your volume or revenue that you do monthly in on on on your in your commercial on your property building?

Ben Nolte (08:08)
Yeah, so so just the building itself. So I have what twenty four percent. I mean we’re we’re probably netting I don’t know, this is a as a partnership, right? It’s not me solely. We’re we’re probably netting twelve to fifteen K a month for that. And and there’s a lot of fees. There’s a property management fee, an asset management fee. There’s a lot of fees that are are baked into that, but by and large it’s pretty self sustaining.

Joseph Crooms (08:33)
Is that fifty K for one property or how many properties do you have? How long how long have you been in business?

Ben Nolte (08:39)
Yeah, so I I actually got my real estate license back in two thousand five. I started doing commercial real estate kind of tow in the water in twenty gosh, I wanna say it was twenty thirteen and did that for three years. at the end of twenty sixteen I decided I n needed to either not do commercial at all or go into it full time and not do any more like residential

rental investments. and and the reason being, my clients, I probably do three to five deals a year commercialized. And my clients would ask me questions that if I were competent, I would know off the top of my head. And so if I’m going to add value or bring value to somebody, I I really wanted to spend my time doing that and focusing on that. And so then I transitioned to commercial, gosh, full time, I guess I would say the start of 2017 is is when I get started in that.

Joseph Crooms (10:07)
And when you started in twenty seventeen, where were you at? Did you start cold or or you transferring from the the from your your traditional real estate to commercial? How did that set you off? How did that set you up?

Ben Nolte (10:21)
Yeah, so I I think it it maybe this is taking a step back. out of college I worked for a gentleman. I read Rich Dad Poor Dad, Robert Kiyosaki. got a degree in in business administration with an emphasis in management information systems, knew well in advance I didn’t want to do that, so I was gonna go back and get my masters in accounting. I did that for a semester.

But while I was in that first semester, I needed a job. I needed some spending money. And so I went and had these answered one of these things they called a classified ad. They had these things called newspapers back in the day. And it was a a gentleman looking for a real estate investment assistant and he did residential flips, rehabs. they did hang on to some of his rentals and and that business grew for him after some time. so it did that from three to seven. Two thousand seven I went on my own.

And had my own company at that point. I was running a qualifying broker. I was flipping residential properties and borrowing hard money to do it, fixing it up, selling it, putting it back on the market. And then 2009 came and I had not made money in in like eight months and my son was about to be born, so I freaked the heck out, man. I went and got a day job. I nothing was moving. So from five thirty in the morning to two.

I was working at Fidelity Investments and then in the afternoons helping care for my son and also doing some real estate. Fast forward to you know from 2009 to 2012, I got back into real estate full time. I was buying residential redemption rights and deeds to properties, renting those out. and so from there I transitioned into

commercial real estate after about three years. So I wasn’t starting cold because I’d done three to five deals a year. but I certainly had a heck of a lot to learn and continue to learn on a daily basis. I think that’s one of the things I love about this business is that there’s always something new to learn.

Joseph Crooms (12:15)
What is the the the the the basics that you had to learn once you made that that adjustment from traditional to co you know, to commercial and how’d you have how did your mind have to shift?

Ben Nolte (12:26)
Yeah, so I think it it really went from when I was just investing myself, I was kinda trying to stay under the radar, which which is maybe counterintuitive, but I was working from home or or a coffee shop essentially, you know, I didn’t have anybody I work with and I wasn’t trying to make any waves. And as I got into commercial brokerage, it’s it’s really relationship based, you know, and I think a lot of real estate and investing is, right? ‘Cause your reputation is gonna precede you.

but so I had to learn consistency of contacting somebody. the best deals that I’ve ever done, whether it’s as an investor or a broker, did not come from a cold call where they needed something done that day, that week, that month. the best deals have come from a call I made two, three years ago and kept touching base with them. And at this point they have a need.

or something comes up and because I’ve been keeping in touch with them, I’m I’m the gentleman that they call.

Joseph Crooms (13:23)
What’s been the key to keeping your machine running smoothly, Ben?

Ben Nolte (13:26)
you know, to keep it running smoothly, I I think it fundamentals and it’s doing small things consistently that aren’t sexy, that don’t get an immediate payback. but the blocking and tackling, if you will. you asked what one of the changes or transitions and mindset it was when I came over to commercial, the speed at which deals get done, the timeline for

For a transaction. So in residential, you can get a knockdown in 30 days for for the sales side, not talking about rehab, et cetera. For a commercial deal, a 30-day close does happen. I would say it is definitely the exception. Typically you’re looking at 45, 60, 90 days for a building. And if it’s land or development, you could be looking at six months, a year, you know, three or

or four years for those deals to get done because I’ve got to get entitlements, permits, utilities sometimes, and so they can take quite a while to get done.

Joseph Crooms (15:02)
who’s on your team now? You know, do you have some property managers or do you team up with them or are or just they’re just general relationships? How do you how you describe

Ben Nolte (15:11)
Yeah, so as far as a team goes, I I moved over to NAI Sun Vista in in August of last year. So I’ve been there all of one year, here in a few days. and so a big part of that is there is a marketing team, there’s an accounting team, I have a transaction coordinator, there is also then a separate property management group, and so they can handle that. There’s also a construction arm of that, and so

If I have questions on anything really, I can go pop in there and and get their feedback. and and I really value the amount that Debbie and Erwin Harms with Sun Vista invest into their employees and their brokers. They’re they’re doing training every week for somebody. And so if you’re new to the business, it’s a it’s a great place to be. You can team up with somebody that’s been in the business for a while as well as get training and and support.

if you’re new to real estate or commercial real estate, you could be a transaction coordinator where you’re earning money a paycheck, but you’re learning how these transactions occur. You’re learning the paperwork, the processes and procedures. And so that’s been hugely beneficial. So I don’t have anyone on my team per se, but at the same time I’ve got a lot of back end support.

Joseph Crooms (16:27)
Let’s talk about the sign behind you. podcast, you know. Are you branding yourself to pr eventually launch out on your own?

Ben Nolte (16:37)
You know, I I don’t want to say that I’m doing that to launch on my own, but it would behoove any broker, investor, whomever to build their own personal brand, right? Because you never know what the future’s gonna hold. and so this is my podcast, Business & Brews with Ben. I based it on what would I do if I were meeting somebody and getting to know them. I’d probably grab a coffee, I might grab

Steel Bending Skullbucket IPA. This is one of our sponsors there. and and so depending on the time of day and and who the the guest is, we’ll have coffee and or beer while we’re on the show. And and so I interview them live here in the studio. and really I I did this and and I hate to keep mentioning names if that’s an issue, but my my friend Aviva Sonenreich, she’s up in Denver, she has a Warehouse Hotline.

I’ve done this as a presence piece because at a my my my thought and my mindset is I’ll interview these business owners, even if we never do a deal or transact together. I’m not trying to pump out there, hey, I’m the best commercial real estate broker in Albuquerque, which I may be. But their audience is gonna watch the show to watch that. And so at a minimum, let’s say, you know.

six months down the road, I call that business prospecting, or maybe I wanna look at their building to buy it, sell it, I got a tenant for it, what have you, they’re familiar at least with who I am. So it makes it a much warmer phone call. and I think also the credibility that it can build with you or for you, I should say, can be exponential as well. It’s led to being on other podcasts, it’s led to speaking engagements. And so it really builds a familiarity

four folks with me and whether you do business with me or not, I’ll still get you a beer. So

Joseph Crooms (18:23)
Good. Now every operator I know has a moment when things just got railed. Maybe a deal that goes sideways or they had to pivot fast. Do you mind sharing one of those moments with us?

Ben Nolte (18:36)
Wow, had I been prepped for that question, I would have one off the top of my head, but I think I’ve got it. so we did a transaction recently and I was representing a buyer of thirty eight thousand square foot industrial building. and in order there was many things that needed to be done on this building, so a lot of moving parts. The electrical had been coppered and stolen, there’s no plumbing.

need a new roof. It there was probably nine hundred thousand dollars worth of work that needed to be done. and and I was working with a a longtime client as as a purchaser. He’s got three buildings he wanted to consolidate under one roof. and so what ended up happening was we’d had an agreement that he would pay the debt service

while we had it under contract so that the person selling it wouldn’t have to slow down on on the rehab of the building. Well we get closer to trying to get closed, the seller was supposed to have some done some improvements, electrical, some plumbing, some sprinkler system, and they just completely stopped doing them thinking that we would keep making the payments and close.

And so at the end of the day,

the seller didn’t do the right thing and apply those debt service payments to the sale price. And so so because of that, you know, my clients walked away from that building and a fair amount of tens of thousands of dollars in debt service payments they’d made. and then we went and bought another building. So sometimes the best deal is the one you don’t do. and sometimes it’s better to walk away

you know, instead of having good money chase after bad, they they say that you’ll do more to keep from losing twenty thousand dollars than you will to earn twenty thousand dollars. And so I think for for these business owners and investors, my clients, the right move was to walk away from from those funds.

Joseph Crooms (20:36)
That’s the kind of stuff that people don’t talk enough about, Ben. And honestly is what separates the folks who dabble from the ones who stay in long term. So you’re long term with this company, but are you

Yeah, do you feel like you’re still independent?

Ben Nolte (20:53)
Yeah, absolutely. And so I was worried that that it would be greatly what’s the right word, corporate, right? Like, hey, watch what you say. they do have an HR department, you know, that sort of thing. And I’m I’m not like off the wall, right? I don’t say but but nonetheless, I’d come from an area where HR was one of the partners and you could say pretty much or do what pretty much whatever you wanted to within ethics, right?

And and so I was very worried that it would be too stuffy and just a little bit tough for me to transition to. And the first day I walk in there and one of my office mates, I think she’s a kindred spirit, she she’s on the phone talking to somebody and she says, The F was he thinking? And and at that moment I knew I was gonna be okay.

Joseph Crooms (21:41)
You’re in the right place.

Ben Nolte (21:43)
Yeah,

yeah. So I d I have some autonomy, but I’ve got some support.

Joseph Crooms (21:45)
Okay. let me ask you this. What do you focus on solving or scaling next, Ben? What’s your next real goal?

Ben Nolte (21:51)
Yeah, so my next real goal is to scale my brokerage income and also scale my my podcast. and so I’m a member associate of Society of Industrial and Office Realtors, SIOR. What that means is that I have not yet achieved the full income threshold to become a member, and that’s based off brokerage income and deal volume that you do. You have to do a certain amount three out of five years depending on your market.

And so I’m I’m really scaling up my prospecting phone calls, I’m pros scaling up my mailing, I’m scaling up the social media that I’m doing, and also door knocking, you know. And so that’s what I’m scaling up so that I can for the the three out of five years achieve that full-fledged income threshold and become an SIOR.

I think you’re on mute, Joseph.

Joseph Crooms (22:43)
I didn’t want to make that background. The guy was doing some some fertilization, so it was a little while. So what what is your volume now and how does that translate into to to revenue for you to reach your goal?

Ben Nolte (22:48)
Sounds good. No worries.

Yeah, so right now I you know it transitioning there’s a little bit of a lag time, I think. And so my volume last year I think I did twelve transactions, which depending on the size, right? You can chase after deals where you make a thousand dollars or you can chase after deals where you make ten thousand dollars. So those isn’t necessarily based on transaction volume.

from a brokerage standpoint, what I’ve seen though from other folks that have achieved that in our market, they’re doing anywhere between thirty and fifty transactions a year. And those can be leaf transactions, those can be sales transactions, buyer rep, tenant rep. and and where I have really faltered is in doing like a consistent mailing campaign. And also I really focused on seller leads.

and and landlord leads. And so rounding that out with buyers and tenants as well as implementing that mailing campaign, I think is really gonna push me over that edge.

Joseph Crooms (23:57)
So do you get like so you sell the building and then you get the tenants as well?

Ben Nolte (24:02)
it it it it’s all situationally dependent. But in an ideal world you would find some dirt, you would sell that dirt to someone that would build a building, you would then lease that building on their behalf, and then at the end of that timeline you’d sell that building for So that’s kind of like the the triple crown, if you will. but but what’s more frequent I think is is helping somebody buy a building.

And then lease it out to tenants. And so and and you know, the the best thing that I’ve ever done is be able to roll my commission into some of these deals as a broker. So you don’t necessarily have to have huge amounts of money to get started. if you you have a competency, consistence, and and can build those networks, you can just roll your commission in and then at a certain point, you know, if it if it goes in the right direction, then then those returns could be infinite.

Joseph Crooms (24:56)
Gotcha. So so we’re focused on scaling and so I actually that already. So and I’m I’m just curious, I’m saying like you’re you’re you are a independent broker, but you work for a company. I I I’m that’s what I’m trying to wrap around my head. Yeah.

Ben Nolte (25:10)
Yeah, yeah,

yeah. So I’m a 1099 contractor, right? and and so I I do work for a company. Outside of that, I’m also building my own brand, bennoltecre.com And so again, I think if if our company closed tomorrow being NAI Sun Vista, and I went out there and said, Hey, I’m Ben Nolte with bennoltecre.com

I’ve I’ve got some personal branding there. And so on my website I I also add success stories. I also add market insights. I’ve got another page that links through to my podcast and so episodes pop up on there. And so I I guess kind of walking two paths at the same time. And I quite frankly, Joseph was a little unsure of how to navigate being

At NAI Sun Vista or any company for that matter, and then creating my own personal brand. I think residential brokers do this all the time. You know, they’re light years ahead of commercial brokers with marketing. It’s you know, maybe it’s Keller Williams, but it’s the Joseph Crooms team with, you know, it etcetera. So you have your own brand even though you’re still a ten ninety nine contractor with that company.

Joseph Crooms (26:22)
Makes sense. So the next move can either compound things or create chaos depending on how you play it. Now I know a lot of people listening are either early in their journey or looking at the level, I think they’re benefiting. When it comes to building relationships, Ben, and growing your network, what’s made the biggest difference for you?

Ben Nolte (26:41)
Yeah, I I I I think that networking is a skill. Some people are are more it’s like anything. Some people have natural talent toward it, but you still have to hone it. I was in one sense lucky that we moved around a lot when I was a kid. and so I think I went to like five or lived in five different towns by the time I graduated high school and what that forced me to do

was always go out and meet people, talk to people. and so in building that network, I I think being strategic about it is is smart. you don’t necessarily go for the superstar right away. Maybe you go for somebody that they work with and get familiar with them. certainly ask, right? You can you can shoot and try and you know connect with Michael Jordan or

whomever is is the superstar. But you might have an easier time getting a hold of like BJ Armstrong or I mean even Bill Cartwright was pretty darn good for the Bulls. But my point being like they’re probably not getting as much attention. And so reaching out to those folks and also you never know where conversations are going to go. And I think you don’t have them with the expectation you’re going to get something from it.

But have it with the expectation they that you’re gonna give value or add value of some some sort, and and then things will continue to flourish from there.

Joseph Crooms (28:07)
That’s great information. All right. So yeah, you can’t fake that. Relationships are everything, especially in your business. It’s it’ it in any business actually. You gotta you know, come out of your comfort zone. All right, before we wrap it up, if someone wanted to reach out to you, Ben, maybe collaborate or learn more about what you’re doing, what’s the best way to reach you?

Ben Nolte (28:27)
Yeah, so my website Ben Nolte.

Joseph Crooms (28:29)
Plug them all in twice.

Ben Nolte (28:31)
Okay, I appreciate it. Thank you. yeah, so BenNolteCRE.com. came out with that here a few months ago. that’s a great way to get hold of me, [email protected] That’s my email. you can always hit me on my cell phone. I’m I’m easy to find. My information’s easy to find. Also, this September I’m gonna be speaking at the CREI Summit in one of the breakout sessions. it is Commercial Real Estate Influencers and

It it it really is what motivated me to start a podcast. It’s what got me really digging into social media. And when I say motivated, it pulled all of the concerns and issues, questions, whatever was holding me back out of the way because everybody is so giving and sharing with their information. You know, they say and and this was a saying I think competition happens at the bottom, cooperation happens at the top.

And and and it’s a really great place for folks to cooperate. So again, that’s CREI Summit. It’ll be in Savannah, Georgia this September. yeah, Ben Nolte CRE, my YouTube channel, also Apple Podcasts and Spotify as well. and and Joseph, I really appreciate you having me on. I give long-winded answers to short questions, and this may have run over time. If it did, I apologize.

Joseph Crooms (29:47)
No, no, no. I really appreciate you. say hello to Savannah, Georgia. That’s where my hometown was, where I was born at. So yes, yes. So just s give me a little salute when you get there.

Ben Nolte (29:58)
Absolutely. I even kiss the ground for you if you

Joseph Crooms (30:01)
Like listen, this has been great. perfect. So I really appreciate your time, Ben. your perspective, your philosophy that you’ve dealt in, and especially your transparency on how important relationships. We need more people in spaces who are doing it the right way. Thanks again for being here. And for your those of you tuning in, I know you got some value from this. Make sure you subscribe. We got more conversations coming from operators.

Just like Ben Nolte, who’s out there building real business, but more importantly, helping real people. So we’ll see you on the next episode of Investor Fuel Real Estate Pros Podcast. Hey Ben, give him a thumbs up and tell me you’ll see him later.

Ben Nolte (30:41)
We’ll see you all soon. Peace. Take care.