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Show Summary
In this episode, Pedro Pereira interviews Cory Carlson, the owner of Constant Commercial Real Estate, who discusses his unique hybrid brokerage model that serves both residential and commercial clients. Cory emphasizes the importance of relationships and communication in navigating the volatile real estate market, particularly for smaller investors. He shares insights on overcoming challenges in real estate transactions, including 1031 exchanges, and outlines his future goals for scaling the business while maintaining a focus on client trust and quality service.
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Investor Fuel Show Transcript:
Cory Carlson (00:00)
we do a lot of 1031 exchanges. So that, I guess I got two deals I could mention. I’ll start with the short one. ⁓ I’ve had an out of state California client in the middle of their…Pedro Pereira (00:08)
Mm-hmm.Cory Carlson (00:12)
towards the tail end of their exchange as you know you have 45 days to identify your replacement property. I had a woman reach out to me with about one and a half million in her exchange and she called me with two weeks left in her identification period saying all right we’re gonna pivot we’ve decided we want to move our money to Oregon.Pedro Pereira (00:34)
Okay.Cory Carlson (00:34)
Two weeks isn’t a whole lot of time becausea lot of time you underwrite deals, you make your illustrations, you get under contract, you do your walkthroughs, let alone due diligence, reviewing financials, inspections. I mean, that generally takes more than two weeks. So luckily, just being in touch with the, so in touch and in tune with the property size that she was looking to identify anything from five to 10 units, they’re very moderate leverage investors.
overly dead adverse but I had already had a handful of deals underwritten that I’d used to serve as illustration so very quickly tied up three properties by the end of the week did all three walkthroughs did two inspections and then picked their favorite so that just kind of came with that was tough right I mean it’s like okay all hands on deck here when you have two weeks we everyone in the team’s got to get to work
Pedro Pereira (01:18)
huh.back everyone to a real estate pros podcast. I am your host Pedro Pereira and today I’m joined by someone who we’ve been very forward to chat with we have with us here Cory Carlson and he’s been making some serious moves in the principal real estate broker space. Welcome Cory. Glad to have you here man. think our listeners are really going to be able to take away something from ⁓
Cory Carlson (03:14)
Thanks for having me.Pedro Pereira (03:20)
how you’re approaching really this volatile market and scaling as well when it comes to being able to grow your business and such. So let’s just dive right in. First off, for people who may not be familiar with your world, give us a short version, the elevator pitch. What are your main focuses these days?Cory Carlson (03:37)
Yeah.Sounds good, yeah. So I own a real estate brokerage called Constant Commercial Real Estate. based out of Oregon. Really the common denominator of client profile that we work with are investors. So while the firm and the branding may be commercial, I guess what’s unique about Constant Commercial is we’re hybrid agency, so we do both residential and commercial sales and leasing. And I really like to kind of break down the into kind of three pillars that the firm is built on. There’s of course the
brokerage side, like I just mentioned, residential, commercial and leasing. We also have a commercial mortgage brokerage. do commercial and apartment mortgage brokerage as well. And then the last is like the, is the consulting. So, you know, really being able to dive into the numbers, take an analytical approach, model.
portfolio performance and be able to give clients guidance that can be quantified. All three of those things intertwine to one another with our general client type.
Pedro Pereira (05:22)
Alright, love to hear it. And could you expand a little bit further when you said that everything kind of ties in together? it like, I guess would say a one-stop shop or do you guys have particular focuses?Cory Carlson (05:32)
Yeah, I’ve found that private real estate investors, especially those that have smaller portfolios comprised of residential assets or Plex assets, don’t have access to good guidance or consulting that.Pedro Pereira (05:47)
Mm-hmm.Cory Carlson (05:49)
that helps them understand the fundamentals of what they’re trying to achieve anyways. for example, a client who owns a couple or a few duplexes or triplexes, while we know that is residential in style, investment.forward, who do you employ to help understand how your properties are currently performing? Have you utilized all the upside? What type of returns are you actually seeing with realistic inputs and the analyses to see your return on equity? Is there opportunity to improve what you got? Refine scale, exchange into larger higher yielding. And that’s our job is to help clients
Pedro Pereira (06:24)
Mm-hmm.Cory Carlson (06:30)
understand what they have and scale into larger asset types and then that’s where the financing comes in where you go, oh I own two duplexes and a few houses all I’ve ever done is residential financing. I don’t really know how to get a loan for a 15 unit apartment building. Well we can help and arrange financing for you as well.Pedro Pereira (06:50)
Awesome, that’s great. Yeah, what really caught my attention is how you mentioned, you know, sometimes that smaller investors just don’t get access to all of that information or that advice. So it’s really good to be looking out for the little guy here. Appreciate the effort that you guys are putting in for that. It’s very unique, you know, sometimes people say, let’s focus on the most, let’s scale, let’s get big. But really it starts with those core relationships, I believe, to build that clientele, to build those experiences.Cory Carlson (06:52)
Yeah.Yeah,
mean think about, especially in the most recent real estate market, when I say recent, in the last…
five, six years where a lot of these assets are highly appreciated. They’ve had low interest rate environment and so significant principle reduction. It’s almost like the fundamentals didn’t really matter because the market kind of saved you. Well, now we got to get back to the fundamentals. so that’s what we really try to bring to our clients is the more objective approach to the real estate as opposed to buying, holding and hosting.
Yeah.
Pedro Pereira (07:50)
Yeah, andthat’s not easy, especially in this climate. What has been the key to keep that machine running so smoothly, to sort of stay afloat even though you’re focusing on the little guy here to make sure that they’re doing okay?
Cory Carlson (08:03)
Well, I think you said it best is just relationships.I really try to be in one of the many important roles is we’re at the round table with your CPA and your attorney or if you have a financial advisor or lender is being able to kind of work together as a team to help you achieve your goals. I’ve also found that if you help a client exchange out of smaller buildings into a bigger one, it makes more money, gets them closer to their goals that it’s not too big of an ask for them to come.
back and do it again.
Pedro Pereira (08:34)
I guess that’s good. That relationship is really important. It establishes not only, as you said, returning clients, but short relationships for the future too. Diving into a couple of bit more of the nitty gritty here, I would say every operator has had a moment when things got real. Challenges always do come up in the business world, as we’d say. And maybe a deal went sideways or you had a time you had to pivot fast, change your mindset. Do you mind sharing one of those moments for you with us?Cory Carlson (09:01)
Yeah,we do a lot of 1031 exchanges. So that, I guess I got two deals I could mention. I’ll start with the short one. ⁓ I’ve had an out of state California client in the middle of their…
Pedro Pereira (09:44)
Mm-hmm.Cory Carlson (09:49)
towards the tail end of their exchange as you know you have 45 days to identify your replacement property. I had a woman reach out to me with about one and a half million in her exchange and she called me with two weeks left in her identification period saying all right we’re gonna pivot we’ve decided we want to move our money to Oregon.Pedro Pereira (10:10)
Okay.Cory Carlson (10:11)
Two weeks isn’t a whole lot of time becausea lot of time you underwrite deals, you make your illustrations, you get under contract, you do your walkthroughs, let alone due diligence, reviewing financials, inspections. I mean, that generally takes more than two weeks. So luckily, just being in touch with the, so in touch and in tune with the property size that she was looking to identify anything from five to 10 units, they’re very moderate leverage investors.
overly dead adverse but I had already had a handful of deals underwritten that I’d used to serve as illustration so very quickly tied up three properties by the end of the week did all three walkthroughs did two inspections and then picked their favorite so that just kind of came with that was tough right I mean it’s like okay all hands on deck here when you have two weeks we everyone in the team’s got to get to work
Pedro Pereira (10:55)
huh.Cory Carlson (11:00)
And I like to say those who are in their exchanges are usually on the top of my to-do list. And I guess another one would be also related to an exchange is I had a client who was exchanging out of a single family home, a four-plex, a six-plex, in a nine-unit building. And within exchange, all of these buildings need to close relatively within as close to possible. And one of those, six-unit building was kind of an issue in…Pedro Pereira (11:22)
Mm-hmm.Cory Carlson (11:26)
It had sale failed a couple times and as you know in an exchange you need to go up in value.or equal to or up in value. so the problem with having, I’m analyzing deals and we’re getting properties under contract is, well, when one falls out, that’s a million dollars, that’s a fork in the road of, now we’re going down in value. So that’s probably one of the more troublesome ones in that we were, how we solved this issue was we really took the what if fork
Pedro Pereira (11:47)
Mm-hmmCory Carlson (11:59)
fork in the road is if this building sells, here are the properties that fit your criteria that are on the market that I know have the return expectations that we’ve discussed. And if it doesn’t, we’re doing a refi on that building and we’re taking money out and closing on these ones. And so I guess the pivot factor there is really just around preparation and having clients or havinga very open dialogue and being overly communicative with clients because exchanges can be stressful if you don’t plan.
Pedro Pereira (12:35)
Of course,and you said it best, know, the communicating, the over communicating almost is what keeps these things afloat. I think that’s what really differentiates the people who just dabble in the industry versus the ones who, you know, are in it for the long run. Big game long-term thinkers. So let me ask you this, you know, thinking about the long-term, the future here, what are you guys most focused on solving or scaling next? What’s the next real goal for your business? ⁓
Cory Carlson (13:03)
Yeah,so right now we’re a small outfit. So I have two associate brokers. One focuses on the investment sales and leasing, and then the other does more on the sales side and more on the residential and plex side. So forward looking, I’d like to bring on more professionals that…
brokers who are professionals in their respective niche. So like it’d be great to have someone who has hung their hat focusing on industrial sales. I don’t do a ton of industrial. I pretty much do every other commercial property type, but industrial just doesn’t come across my desk very often. So my forward thinking would be bringing on
brokers with talent who know their way around certain property types, but then can also employ the kind of consulting advisory mentality that we have here at Constant Commercial.
Pedro Pereira (14:36)
That’s great. That’s great. So scaling that that’s big Mm-hmmCory Carlson (14:38)
Same thing goes for the mortgage side. Rightnow, if we were doing loans, which is a minority of volume in our firm, it’d be great to bring on someone who just solely focuses on the mortgage, creating new relationships with lenders, and where I can focus on working on the client and be able to hand off and work as a team their loan to another broker would be helpful.
Pedro Pereira (15:04)
Yeah,of course. And if we could expand a bit, the mentality here, as you mentioned, is we talked about helping the little guy out, creating those connections with your clients. How do you see that translating over into the scaling that you’re looking into? Are you guys looking to change the mindset to get more quantity? Or are you going to keep the mindset of quality for these smaller clients and we’re going to grow on a more, I guess I would say gradual level rather than a big boom?
Cory Carlson (15:30)
Yeah, I guess kind of both. Bit of a cop out of an answer there, I mean, like, we definitely can take in more.Pedro Pereira (15:34)
Mm-hmm.Cory Carlson (15:39)
I’ve gained efficiencies in being able to help clients with smaller assets exchange and buy bigger ones. That just seems to be where I’m focusing. So whether I’m underwriting deals that are on the market or come across my desk, generally that’s actually fitting the profile of more than one client. Rarely do I have more than one client who actually want that building. ⁓ So we’re ready to bring on more clients with residential buildings who want to go into larger buildings.Pedro Pereira (15:57)
Mm-hmm.Cory Carlson (16:03)
That doesn’t mean we can’t help clients who have larger assets already. It’s just having a team, we have a very, very dynamic and flexible and fluid team here, even though we’re small, which I think we’re well equipped and have access to all the data and resources that even the larger outfits have. So yeah, mean, we’re kind of ready for both.Bring on the little guy, bring on the big one. We can help you out.
Pedro Pereira (16:28)
Hey, that’sgreat to hear. That’s very big, especially when you’ve got such a, you know, already a history of, you know, building this relationship with your clients. You know, this next move can either, you know, compound things or really just create some chaos or as we’re hoping, organize chaos, depending on how you play it. Now, I know that a lot of people here listening are either very early in their journey or looking to level up. And I think they benefit from hearing this when…
Cory Carlson (16:43)
Yeah.Pedro Pereira (16:55)
When it comes to building relationships and growing your network, what has made the biggest difference for you?Cory Carlson (17:01)
being honest and real, also competent. don’t know, I like to, it was a fairly analytical type, let the numbers speak, right? know, rather than, oh, I feel good about this market or this investment is like, well, let’s…Let’s make sure that the client understands the fundamentals and how or why we’re underwriting deals this way. So I mean, I guess that’s really it. is like…
Starting out as a consultant and an advisor and then being a broker next I mean you’ll I’d feel like my clients appreciate that is we’re as we’re looking for an opportunities whether that’s fix and flips or it just being real like
Pedro Pereira (17:38)
Mm-hmm.Cory Carlson (17:47)
Like, yeah, realize, you know, these wholesaler deals that come through and the competition, how they get bid up and then being, this is great. And you go, but are we accurately underwriting these properties with realistic expenses and realistic timelines and realistic, you know, holding costs? And I think just being honest, analytical and consultative, it comes full circle when people decide to finally make the move.whether that means they already own assets or they’re getting into their first.
Pedro Pereira (18:17)
and thank you for that. And really, you can’t fake it. Relationships are everything in this space. The way that you set it down, you know, the way you described it is absolutely just on point. So before we wrap, I wanted to allow the listeners, you know, if they wanted a chance to reach out with you, connect with you, maybe collaborate or just learn more about what you’re doing, what’s the best way for them to reach you?Cory Carlson (18:38)
Yeah, well my website is just constantcommercial.com/. If you go there, there will be several input forms that you can reach out to me they come to me direct and the team. That are the office line. I give me a call. I love to talk on the phone. So…Beware you call you carve out some time because I’m very giving of my time on the phone I So you can call the office line, which is also on the website there
Pedro Pereira (19:04)
That’s awesome, thank you for that. That’s what we’re all about here at the podcast as well, connecting people to more information, having players like you in this game that do that as well is what makes this all the great experience that it is. Well, listen, we really appreciate your time, Cory, your story, your perspective, and we definitely need more people in this space that are doing things the right way, so thank you for being here.For those of you tuning in, if you got value from this, make sure that you are subscribed. We’ve got more conversations coming up with operators just like Cory, who are out there building real businesses. Thank you very much for your time today, We’ll see you guys on the next episode.
Cory Carlson (19:25)
Thanks for havingappreciate you. Thanks.
