A Realtor's Path from Selling Homes to Investment Real Estate

Mark Howe's career began like many Realtors, working a second job to make ends. To add to the challenge, Mark's start as a Realtor in 1982 was compounded by interest rates as high as 20-plus percent. While many may have let a less-than-ideal market discourage their path, success in the form of a commission check encouraged him to continue his real estate career.

Mark voiced feelings that residential real estate was only a starting point for him, so we wanted to explore more about his path into investment/land brokerage and uncover some of his keys to success in this real estate arena.

Nathan Graham: Describe the experience of working on your first land development project.
Mark Howe: My role was mainly on the brokerage side of a large residential development back in the early 2000s in Northern Wake County, North Carolina. The project had 225 lots and gave me the opportunity to experience firsthand the process that goes into such a large development project as a broker.

NG: So how did an opportunity like this come your way?
MH: This one was a result of always being present and engaged regardless of where you are. I was at the gym and I overheard someone talking real estate. So we started talking about what we each do and learned that we had complementary expertise. So when this opportunity came up, we decided to work together on it.

NG: Beyond being in the right place at the right time and paying attention, what else did you do to position yourself to be able to take advantage of this opportunity?
MH: After selling homes for a few years, I decided to grow my knowledge and expand my business from residential real estate. So I left the firm I was at and joined another group that had a commercial division where I could learn this side of real estate and be mentored by successful practitioners. Ten years later and with a vast array of experiences, I made the jump to working only on commercial real estate and land development opportunities.

NG: I see that you earned the ALC designation. How has the Realtors® Land Institute (RLI) enhanced your work with land buyers and developers?
MH: In 2007, I was able to participate in the fast track program offered by RLI as a result of having my CCIM designation. This forced me to take some really great educational courses such as Google Earth for Practitioners and general land development trainings. The education I gained from RLI is of substantial value, as is the RLI network nationwide. Being a land guy with the ALC designation and RLI brand next to my name is influential in my advertising and definitely helps me win more business.

NG: You mentioned being a CCIM. Are there things you learned with this organization that have helped you with land development deals?
MH: CCIM is known for educating agents on how to research properties, and the processes they teach work well in land development scenarios. Over the years, I've incorporated CCIM course content into my own homegrown system for success.

NG: Will you talk a little more about your system for analyzing properties?
MH: Sure, it relies heavily on people to collect information more than anything. I work with civil engineers to pull due diligence reports, get draft designs, etc. I'll also meet with local planning departments to learn what they want, and look at infrastructure needs and other engineering issues. From there, I create a rough estimate of the costs to move the project forward that a client can use with their expected cash flows over their time horizon to gauge next steps. Valuate® Investment Analysis in the RPR application is a really helpful tool for managing the assumptions, and for analyzing the ROI with quick report sharing abilities with clients.

NG: Is it a safe bet that this isn't a cheap or quick aggregation process?
MH: It can be as expensive as $2,500 – $3,500 and typically requires time getting the needed information from the different entities mentioned above. But, if you get a client to commit to this work and cost upfront, it will give them a better understanding of what is truly feasible and make sure that their concept will fit in within the city's regulations and economic planning.

NG: Are there things you do before reaching this step? Maybe a few low cost or free services to help vet these opportunities?
MH: Traditionally, I've gone out and looked at the property as well as gone onto the county's GIS site to understand the design as well as zoning potential and allowances. I've also shared information on comparisons for clients either from a listing database I subscribe to, or I call local appraisers for comparables in unique situations. Recently, I've learned more about RPR Commercial resources and find a great deal of information I've collected from multiple places and or paid subscriptions for in the past that can be aggregated with one login from RPR Commercial.

NG: Last question: what would be one piece of advice you wish someone would have given you back when you first started?
MH: If you decide you want to transition from home sales, make a move to a commercial or land specializing firm with a mentoring program and begin participating with organizations such as CCIM and RLI for training in the areas that interest you. Some of the greatest things I've gained through my Realtor® membership are access to valuable tools, education and people that have helped me explore the many facets of real estate and successfully build my business. As a Realtor®, your career can go in many directions based on your interests, the time you invest learning and the people you meet along the way. Here are some of the tools and resources I've found valuable in supporting my career in land development.

About Mark Howe

Mark maintains his North Carolina Broker's License, NC General Building License, and is a member of the Triangle Commercial Association of Realtors (TCAR). In 2000, Mark attained his Certified Commercial Investment Member (CCIM) Designation and has served on the NCCCIM Board of Directors from 2001-2015, and was the 2014 Past President. In 2007, Mark Received his Accredited Land Consultant (ALC) Designation.

About RPR Commercial

For demographics, psychographics and predictive analyses, to economic data and a full suite of reporting tools, RPR Commercial is your research and analysis tool as well as a powerful property database.

• Valuate® – A quick click from any parcel of land in RPR will take you into Valuate® where you can do different types of financial analyses, including a back of the envelope land development analysis for multifamily and office developments.
• Realtors® Land Institute – Education for real estate professionals who specialize in, or who seek to specialize in, land brokerage of farms, ranches, undeveloped tracts of land and related assets, including a path for obtaining the ALC designation.
• CCIM Institute – The CCIM designation represents proven expertise in financial, market and investment analysis, in addition to coursework around negotiation.

To view the original article, visit the RPR blog.