Commercial Real Estate Boot Camp December 2017

Commercial Real Estate, Real Estate, Uncategorized
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Commercial Real Estate Boot Camp

Commercial Real Estate, Real Estate, Uncategorized

Are you a residential REALTOR® looking to expand your business into the commercial market? Or a managing broker with residential agents conducting commercial deals or interested in commercial real estate?

Commercial Boot Camp is a hands-on, four-day program that goes beyond the surface and provides in-depth training to build your confidence and the skills necessary to succeed in commercial real estate.

The four-day program will cover:
Developing the goals and objectives of your commercial business
The ABC’s of getting started
Understanding of opportunities and challenges
Commercial forms and terminology
Negotiation strategies
Useful commercial websites for research, news and marketing
Building a resource network that includes attorneys, inspectors, appraisers, lenders and surveyors
Areas of specialty and commercial mentors
Generating leads, referrals and growing your sphere
Building an online presence and social media marketing
and more!

The live classroom setting allows for rich, interactive sessions and post program support. This workshop is offered in partnership withNewcastleCRE®.

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Mainstreet Organization of Realtors in Downers Grove, IL.  60516  USA
Donna Wilson Registration Coordinator
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Commercial Real Estate Boot Camp Testimonial

Commercial Real Estate, Real Estate, Uncategorized

Commercial Real Estate Boot Camp

January 2017

After attending Paul Martis’s Commercial Real Estate Boot Camp in Oak Brook, Illinois, I realized that Commercial Real Estate is a very complex industry.

Paul is a true mentor, equipped with a great amount of knowledge, resources and experience.

Entering this program without any Commercial Real Estate experience, I was slightly hesitant about my ability to keep up with all the CRE topics presented in the syllabus.

Paul’s mentoring skills truly exceeded my expectations, by supporting me throughout the process.  His ability to articulate and connect with his class is exceptional by taking into consideration the entire group’s backgrounds, experiences and learning styles.

He understands the needs of his students and offers a highly customized training.  His mentoring curriculum offers valuable solutions in various topics such as Commercial Technology, CRE Marketing and Network tools, supporting organizations, as well as a very valuable financial model.

His wealth of knowledge and the amount of endless resources made me feel much more confident and reassured me that the field of commercial real estate even though challenging, offers endless opportunities for Real Estate professionals.

Paul is an excellent mentor and who is willing to offer ongoing support to any student who goes through his CRE training program.  His level of dedication and desire to help new and seasoned real estate professionals demonstrate his strong work ethic by always ensuring the professional growth and success of his students.

Emilia Linardakis

Managing Partner-Language Advisors      Oakbrook Terrace, IL.


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Commercial Real Estate Boot Camp

Commercial Real Estate, Real Estate, Uncategorized

10 Point Commercial Mentoring program from NewcastleCRE and instructed by Paul Martis, provided our group with a wealth of information pertaining to the Commercial side of the industry.  The classes were jammed pack with information, individual, and team exercises.  The various sites and resource links provided by Paul is everything you would need to start off knowledgeable and confident on the Commercial side, nothing was left out and no one was left guessing.  He answered all of our questions thoroughly.

I appreciated the “hands on” approach of the information that was dissimilated to our group.  It is exciting to expand your real estate business to incorporate the Commercial aspect of the industry.  It is also an asset to have a mentor like Paul when starting out on this new venture.

Venetia Johnson-Broker   Coldwell Banker Residential Brokerage/Commercial NRT              1314 East 47th Street, Chicago, IL.  60563

May 04, 2017 completed delivery of this program to a group of 13 Real Estate Brokers with

Coldwell Banker Residential Brokerage in the Hyde Park community of Chicago.


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Commercial Real Estate LOI (letter of intent)

Commercial Real Estate, Real Estate, Uncategorized

The process for leasing or purchasing commercial real estate space usually starts with the interviewing of adequate representation (commercial real estate brokers), followed by drafting a list of requirements for the new space, and finally a search of available spaces. Once one or two properties are selected as possibilities, negotiations begin on a “non-binding” level through the use of a Letter of Intent (LOI). The LOI is a precursor to a lease or sales contract and is usually completed by the chosen commercial real estate broker.

The reasons for using a LOI are multiple, with the most important being that it serves as a guideline for the attorney to draft and finalize necessary leases or contracts. Unlike residential contracts for homes, commercial leases and contracts vary each transaction. There is no set template to follow. Therefore it is necessary for these documents to be orchestrated by a knowledgeable attorney, as it is out of the realm of a broker’s duty and is essentially illegal. However, a broker’s role is crucial in that they outline the negotiated points the attorney will draft the contract on. This action saves legal fees as the attorney has less to negotiate through the contract.
Items that brokers include in an LOI are:

1. Names of the parties in the transaction including the buyer/tenant and seller/landlord.
2. The address of the sought after space.
3. Size of the sought after space in both rentable and usable square feet (if necessary).
4. Offer terms.
5. Signature and date lines.

You may be thinking to yourself, what are the offer terms. Great question…as this is the most fluctuating part of LOIs and contracts alike. Our next blog will cover a variety of items that can be negotiated through an LOI.

Authored by O’Donnell Commercial Real Estate

Re-Published by Paul Martis-Commercial Broker/Realtor





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Glossary Of Commercial Real Estate Terms

Commercial Real Estate, Real Estate, Uncategorized

Glossary of Commercial Real Estate Terms 

CAP RATE Capitalization Rate is simply the net operating income (NOI) of the investment property divided by the selling price. For example, a multi-family property has a NOI of $100,000 per year. If an investor wants to pay no more than 7.0% cap rate he would pay $1,428,571 ($100,000/.07).

If you are a stock market investor, you may be familiar with the P/E ratio of a stock. This is the price/earnings ratio or capitalization rate…the same principle. A stock selling for $20.00/share and it has earnings per share (EPS) of $2.00/share, then it has a P/E ratio of 10 or a capitalization rate of 10.0%.

CAM Common Area Maintenance is what a lessor will charge a lessee on a triple net lease.  Common area maintenance typically consists of  landscaping, snow removal, common area utilities, cleaning, scavenger. It may also include a maintenance & repair amount to fund such things as parking lot sealing/striping, roof repair/replacement, etc.  Usually, but not  always, property taxes, insurance and management fees are separate.


This is a term (just like CAP rate) that is widely used by real estate investors. This is the amount of cash (either pre-tax or after-tax) that is generated by an investment property divided by the amount of cash you have invested in the property. Most investors will ask you what the cash-on-cash return is or what the cap rate is.  For example, the net cash you have invested in a property is $80,000 ($100,000 down payment less $20,000 of seller credits at closing) and the cash generated by this property, after-tax, is $15,000. Your after-tax cash-on-cash return is 18.75% ($15,000/$80,000).


Cash Flow is the net operating income of an investment less depreciation, interest, mortgage principle and income taxes.  Cash flow is what most investors are interested in because this is what goes in their pocket.

Some sophisticated investors are only interested in cash flow…not earnings.

DEPRECIATION This is an expense that the IRS allows an investor to deduct over the useful life of an asset. It lowers your taxable income. For example, the IRS will allow you to depreciate a multi-family property over 27.5 years. A commercial property (i.e. a strip center) is depreciated over 39 years and is an important figure in determining the after-tax cash flow which is needed to calculate after-tax cash-on-cash return.

DSR This is the Debt Service Ratio. This is what the lenders (underwriters) will look closely at when determining if they want to lend on a particular property. This is the principle and interest (P&I) of all mortgages divided into the NOI. For example, the P&I is $325,000 and the NOI is $400,000.   The DSR would be $400,000/$325,000 or 1.23. Lenders generally want to see a 1.15 – 1.3 DSR.   Ask the lender, who will make the final decision as to what ratio is acceptable as it maybe over 1.3 DSR (130%).

EBT This is Earnings Before income Taxes. Earnings before taxes is NOI less interest expense and depreciation expense.

EAT This is Earnings After income Taxes.

EGI This is the Effective Gross Income of an investment property. This is a total of all the rents for a property less an appropriate vacancy factor.

LTV This is Loan To Value. This is the percentage of the purchase price that a lender will give a mortgage on. For example, most lenders will do a 80% LTV on multi-family properties. However, on strictly commercial (mixed- used, strip centers, etc.) they will only lend 75% LTV.

FIT This is Federal Income Taxes. When calculating an investor’s tax rate in a financial model you should use his/her’s incremental tax rate. ..not the average. For example, if the investor were to purchase a multi-family property that was going to add an additional $100,000/year to his/her income, the tax bracket that they may be at for new income could be 35% although their overall average taxes are at 25%.

SIT This is State Income Taxes.

NOI This is Net Operating Income. This is the  Effective Gross Income less all expenses required to operate the property, i.e. real estate taxes, janitor, property management company fee, utilities, waste disposal, pest control, insurance, maintenance & repairs, supplies, advertising, legal fees, etc.

ROI Return On Investment. This is the current, or future projected, equity of  your investment property divided by the amount of original equity (cash) that you invested to purchase this property. For example, you paid $100,000 cash to purchase a $1,000,000 property. Five years later, the  property has increased in value to $1,300,000 and your $900,000 mortgage has been paid down to $850,000. You now have $450,000 of equity in the property, less your original equity of $100,00 is $350,000 divided by your original investment of $100,000 equals 350.0% or 70.0%  per year ROI.

IRR This is the Internal Rate of Return, which is often used in capital budgeting. It is the interest rate that makes net present value of all cash flows equal zero.

NPV This is the Net Present Value.  It is the difference between the present value of cash inflows and the present value of cash outflows. Net present value is also used in capital budgeting to analyze the profitabilities of an investment or project. Net present value is sensitive to the reliability of future cash inflows that an investment or project will yield.

VACANCY RATE This is the percentage that you will apply to the gross revenues of a multi-family property to allow for a certain number of units being vacant for partial periods during the year. A rule of thumb is: 10 – 12 units and less,  use a 10.0% vacancy factor…over 12 units use 6.0% – 7.0%.  Ask the lender what % vacancy factor they would use if the buyer is not paying cash.

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Commercial Real Estate Mentoring Testimonial

Commercial Real Estate, Real Estate, Uncategorized

Commercial Mentoring Program in Wisconsin

In 2016 I was invited by my managing broker to be part of Paul Martis’ commercial real estate mentoring program.
Paul has an extensive background in commercial real estate and his class was thorough in every aspect.
There was a sizable amount of information to go through but Paul made it manageable and communicated it in real life examples.
It is invaluable to have someone with his experience and expertise at your fingertips.
Paul provided us with the necessary formulas and discussed every variable and how they can affect the bottom line.
I would not hesitate for a minute to recommend NewcastleCRE® 10 Point Commercial Mentoring Program in your training for commercial real estate.
Top notch!
Katie Hobbins-Broker
Coldwell Banker Residential Brokerage
Mequon, Wisconsin

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Leads and Referrals

Commercial Real Estate, Real Estate

In real estate, Residential and Commercial Realtors look to build their business in different ways.

We will explore a few of the opportunities, Leads and Referrals.

One can buy potential leads, a list of names that meet your business criteria and then you attempt to qualify those names as a new opportunity.

Some real estate systems are setup to call or text an agent in response to an advertisement on a real estate sign.  Are you paying for each of those leads or is the system setup as a value added service?

Again, you need to qualify those potential buyer or tenant opportunities.

Are you calling for leads..check your Do Not Call list…Expired and Cancelled listings can be found on your local MLS?

A lead can come directly from a call to you our office from a customer that is searching the internet for properties in your area.

Are you promoting yourself and your services across all media as leads can come from random searches on Google and the emphasis is usually to those brokerages and agents who are displayed on the first page of Google.


Now lets move on to Referrals.

Your sphere of influence is very important as one source of referrals, while testimonials, social media and reaching out to other agents within and outside your company can also add referral opportunities.

Do you have a unique approach to real estate, i.e., Commercial Services, legal or appraisal background, designer, staging or professional photography.

Develop a system and a approach which will grow new business as there is not one best practice which works for everyone.

Know your strengths and showcase your accomplishments!

Paul Martis-Commercial Realtor

Commercial Real Estate Mentor








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“Mentoring and the Protege…..Getting into a CRE state of mind”

Commercial Real Estate, Real Estate, Uncategorized

“Getting into a CRE state of mind”

Starting a career in real estate creates many expectations and commitments for the agent as

they build best practices for success.

Developing their professional CORE early is a critical part of the education process while

maintaining relevance with their professional development goals.

The Elements of one’s real estate CORE are Competencies, Organization, Resources and

Evaluation and require an understanding on how to focus and maximize each.

When an agent gets into a CRE (Commercial Real Estate) state of mind, the differences

between residential activities and commercial should become evident, different forms,

property types, service professionals, terminologies and evaluation tools to name just a few.

Herein lies the confusion and pitfalls as some try on Commercial assignments without being

In Illinois, a real estate broker doesn’t need a separate license to conduct commercial real

estate transactions and many brokerages are not prepared to clarify or address these crossover

Many residential agents who are looking to ease into the commercial arena find the support for

learning this new discipline difficult without a seasoned Commercial Real Estate Practitioner.

We find that a limited opportunity exists as formal directories of Commercial Real Estate

Practitioners willing to help are in short supply or nonexistent.

This hopefully will lead an agent to explore the term Mentoring and Protégé and what this

professional relationship is all about.

Mentoring requires patience and commitment from the Mentor (Educator) and Protégé

(Student) and is normally a one to one or small group setting.

The Mentor should provide advice and direction while constantly reviewing all expectations.

These programs should be structured and have defined objectives with a schedule which meets

the needs of the Protégé and Mentor.

A formal Mentoring program could take 3-6 months to complete 30 hours of education in  1-2hr sessions.

The learning & support provided to the Protégé should not end with the completion of an

assignment or structured mentoring program as the process needs to remain dynamic, evolving

for both the student and the educator.

The reasons to choose a Mentor:

1. Focuses on Protégé’s abilities and interests

2. Qualifies resources available

3. Transaction support-deal making

4. Recognition by industry expert-Certificate or future Certification

5. Platform for Professional Development-Networking

7. Market Penetration-New Business Development, Co-List, Leads

We as real estate professionals need to move away from using or embracing such terms as

Resimmercial agent which suggests a realtor® agent doing a small percentage of their business

as commercial and instead, focus on enhancing the education process for all those who would

become Commercial Real Estate Practitioner’s.

Paul Martis-Commercial Realtor®/Educator/Mentor

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Why Use a CRE Mentor?

Commercial Real Estate, Real Estate

Mentoring Testimonial


Real estate is a complex business and it becomes even more complex once you add the variables of a commercial income property.  The rules are similar but applied differently than residential. The motivations of buyers, sellers, landlords and tenants are also different.

A tenant might ask for a location based on demographics, traffic counts, signage, foot traffic, required parking ratios and so on. For a retail center or an office building, a landlord will want to maximize their income with the right tenant mix and market rents. Multifamily residential landlords may want to maximize their income with tenants at market rates, reduce operating expenses that they pay to increase NOI and create a minimal vacancy loss factor. Multifamily landlords can’t choose where to put their tenants for the best mix per the requirements of fair housing. All these distinctions of the different product types in commercial real estate make it critical to have a mentor in your corner.

Find a mentor who can guide you in the product types you want wish to focus on.  They will help you grow in your focus from counting mailboxes on a multifamily building to get an idea of the number of units to understanding desirable parking ratios for a tenant going into a retail center. There is always something to learn in this business. Building your knowledge from an industry veteran’s experience is one of the fastest ways to get up to speed.

In the Chicago market, I would recommend the mentoring of Paul Martis of Newcastle Team, Coldwell Banker Residential/Commercial in Oak Brook, IL. He can mentor for an office as well as individuals. Paul is a 20 year industry veteran who is experienced and respected as a commercial broker, an instructor, a mentor and as someone who gets involved in the real estate community at large. Many Realtor brokerages do a mix of residential and commercial but their resources for commercial are limited to what the association provides.  Paul Martis provides knowledge through his programs that helps brokers understand how to get deals done.

Best of luck to all who venture into this industry and I hope to see you at a closing table someday.

John Guill


Sperry Van Ness

25 N Third St.

Geneva, IL 60134

630-699-4914 Direct

630-938-4950 Office

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