I've been in commercial real estate since 2013, and in that time I've worn three different hats. I've been a broker, I've been a property manager, and I've been an investor and developer.
Thirteen years is long enough to be wrong about almost everything at least once. I've had a $20,000 HVAC unit die two months after closing. I've pitched 50 lenders on a hotel and had 49 of them tell me no. I wrote a proforma on my first deal that was, and I mean this literally, fiction.
So if you're trying to figure out how to get into commercial real estate investing, this is the stuff I wish somebody had handed me in year one. Five lessons that actually moved the needle, and then the exact playbook I'd run if I woke up tomorrow with no money, no network, and no name.
In This Article
Lesson 2: Buy the Unsexy Asset
Lesson 4: Buy in the Path of Growth
Lesson 5: Build the Base First
The First 13 Years, By the Numbers
4.5 Years
Brokering before I bought my own first building
$575K
What I paid for that building at 25 years old
49 Nos
Lenders who passed on Salt Ranch before one said yes
What I Believed in Year One of Commercial Real Estate (And Why Every Bit of It Was Wrong)
It was 2013. I was sitting at the leasing desk of a boutique development firm here in Nashville, a wee baby broker, and I was 100% convinced that four things were true.
The best deals are on the listing sites. My only real experience with real estate had been on the residential side, like most of you. And if you're coming from the residential world, the MLS is the end all be all. Everything is on the MLS. That is not even remotely the case in commercial. But I figured the trick was just to search harder than everybody else, on the same sites everybody else was searching.
Banks decide when you're ready. My bosses kept me out of the lender conversations, so I assumed a no from a bank meant the deal was dead. Not viable, not fundable, time to move on.
You need big capital to start. Which meant I was going to have to save a mountain of money, and someday I'd have enough to invest. Unfortunately, life has a way of pushing someday further and further out.
The sexy asset wins. You drive past the shopping centers and the malls and the massive apartment complexes and you think, yeah, that's what I want. Nobody drives their friends past a vacant parking lot.
Here's what those four beliefs cost me. I was a broker for four and a half years before I bought anything of my own. And when I finally did, my underwriting was wrong in every direction. Best case assumptions on every single line. It's honestly hard for me to fathom that investors handed me $100,000 on the back of that proforma.
Then reality showed up. A $20,000 HVAC surprise two months after closing, on a unit placed so awkwardly in the building that it took a crane and a full crew to swap out. And I'd projected six months of vacancy because hey, I'm a broker, I'll hit the streets and find somebody. It took nearly twelve.
I got almost everything wrong on my first deal, and it still worked out. Because I bought it right.
$97 a foot, vacant and fully renovated
That's the whole lesson. I bought it at $97 a foot, vacant and fully renovated, and we sold it a couple of years later for around $750,000. The margin covered every mistake I made. That's what buying right actually buys you: room to be wrong.
Lesson 1: Get Paid to Learn
This one matters whether you're starting from scratch, transitioning out of residential, or coming in from another career entirely. Go get paid to learn.
When I started in 2013 as a leasing agent I was making almost nothing. But I was making something, and I had a front row seat to real deals. I was in the conversations. I didn't have the money, but I had a seat at the table. It might have been off to the side or behind everybody else, but I was in the room watching how people actually put these things together.
And it paid off in the most direct way possible. My first commercial property purchase came from my own brokerage client. They found the deal, then couldn't close because they didn't have the cash. We assigned it to a second buyer, and he couldn't get financing either. At that point I'd been working the deal for months and I was staring down a $17,000 commission I badly needed. So I said, just assign it to me. I'll figure it out.
It was listed at $750,000. I bought it for $575,000 at 25 years old with a $460,000 loan, $100,000 from two investors, about $18,000 of my own cash, and a $120,000 line of credit. That line of credit is what covered the HVAC disaster and the extra six months of vacancy. Nobody had to come out of pocket.
I'd never have seen that deal from the outside. I saw it because I was getting paid to stand next to it.
Lesson 2: Buy the Unsexy Asset
Yes, the shopping centers and the multifamily complexes look great. They're also unbelievably expensive and you're competing with everybody. Meanwhile the boring stuff quietly prints money, and nobody brags about it, which is exactly why you've never heard about it.
Think about the industrial real estate guys 10 or 15 years ago. That was the neglected corner of the business. Those guys made a fortune.
I've got a buddy in Texas whose parking lot clears $30,000 a month at 60 to 70% margins. A parking lot. Gravel and fencing, leased to truck drivers, almost nothing to maintain.
Or dirt. I bought a parcel here in Nashville for $618,000 with a partner, rezoned it, and flipped it for $1,575,000 within three years. Run that math. That's boring land and a phenomenal exit, and we rolled it into a self storage facility through a 1031 exchange and crushed it on that one too.
Then there are abandoned car washes. How many vacant buildings do you drive past every week that nobody wants today? You can pick those up at a steep discount, fix them up, and build the equity in yourself.
Boring isn't a compromise in this business. Boring is a feature.
Lesson 3: Go Collect All the Nos
I learned this one at 18 in my first sales job. Every no puts you one closer to a yes.
Take Salt Ranch Hotel, the boutique hotel we just opened in East Nashville. I pitched 50 lenders on that deal. My CFO says the real number was closer to 75, but I'll stick with 50.
Same pitch every time. Forty-nine of them said no. Almost every one said the same thing: we'd do this if you flagged it. Meaning brand it, put a Hilton or a Marriott sign on it, because bankers assume a flag makes the deal safer. It doesn't necessarily, and it certainly doesn't guarantee it makes more money.
One lender said yes. That's all it takes. The hotel is open, we're selling out on weekends, we've got a pool club, and the whole vision came to life. Forty-nine people said no to that vision.
The deal was never bad. It just wasn't a fit for those particular lenders. Not every deal fits every lender, not every deal fits every investor, and not every deal fits every tenant. That's not rejection, that's just the business. Go call the next one.
Lesson 4: Buy in the Path of Growth
This is the lesson that's made me more money than any of the others.
Every city has a corridor you look at and think, it doesn't really make sense that this hasn't taken off yet. Good traffic counts. Good accessibility. Straight shot downtown. And almost no investment on it, while every comparable corridor is already priced out of reach.
In February of 2020 I called it on this blog. I wrote that Dickerson Pike was the most underrated and most overlooked corridor in Nashville. I pitched investor after investor and developer after developer on why they should buy there, and almost all of them said the same three words: it's too early.
If it's not too early, it's now too late.
The rule I'd tattoo on every new investor
When I wrote that post, land on Dickerson Pike was trading between $1 million and $1.25 million an acre. Four years later, after Oracle and the new Titans stadium were announced and apartments started going up everywhere, it's running $2 to $2.5 million an acre. If you had bought land in 2020 and done literally nothing, you could have sold it for double.
That's where we built the hotel, and it's a big part of why that project survived. We got delayed roughly two years on permits with Metro, which is a nightmare and a whole separate story. But the land kept appreciating the entire time we sat on it.
We ran the same play up in Rivergate, around the Madison and Goodlettsville area. It's 15 minutes from downtown, closer than Green Hills, better connectivity, faster to the airport, and dramatically more affordable. So we started buying. We picked up a 330,000 square foot shopping center for $18 million back in 2021. Equidistant from downtown on the other side of the river, that same center probably costs $60 million. I'm not exaggerating.
Now the old mall up there is coming down, developers are putting in hundreds of apartment units and new retail, and they just dropped an In-N-Out in the middle of it. All of that lifts the value of what we already own, and we didn't have to do a thing.
Compare that to an established corridor. Nothing is going to come along on Broadway that makes people say this is unlike anything it's ever been. Values there will keep climbing because it's Broadway, but the step change is gone. Step changes only happen in emerging corridors.
Lesson 5: Build the Base Before You Build the Portfolio
I talk to too many investors who are fixated on doing their first deal at all costs. That's a genuinely risky way to walk into this business.
It's more prudent to spend a year or two learning the market and meeting people before you dive in on everything. When we expanded into Chattanooga a few years back, I spent two full years studying that market and meeting the people in it before we bought anything.
Same discipline with investors. I curated that list over years, and they know exactly how we operate before I ever call them: typically a 70/30 to 80/20 split with a preferred return, usually around 8%, and no complicated waterfalls. I've got professional athletes who invest with us. They take a lot of hits and none of us want to get lost in the math. A clean structure makes it dramatically easier to raise capital every single time.
We also manage our own buildings, and property management taught me what a proforma never shows you. How you run a property substantially changes what you make. Skip preventative maintenance, or stop re-bidding your landscaping contract every couple of years, and it shows up immediately. Every dollar that falls to the bottom line increases your NOI, and on a cap rate basis that increases the value of the whole building.
And here's the part I want you to sit with. The last five deals we've done all came from relationships. Not from listings. Not from platforms. From people who knew the kind of work we do and knew we had a reputation for closing.
Go back and read those five lessons again. Not one of them is about how to pick buildings. They're all about your approach and your reputation.
How I'd Get Into Commercial Real Estate If I Started Over at Zero
No money, no network, no name, but knowing those five lessons. Here's the exact playbook.
Get near deal flow. You don't have to be a broker. Get into lending, get into property management, get into anything that puts you in the room. Find a way to get paid to watch deals get done, and if you can't get paid, get there anyway.
Buy the boring deal first. Small, unsexy, cash flowing from day one, with a simple structure. Not eight investors and a waterfall. I've got a project right now with eight or nine phases in it, and it did not start that way. It started as one vacant building I put two tenants into and didn't even have to renovate.
Pick a corridor and stand in it. Know one street or one neighborhood better than anybody else alive. Every deal you do there makes your next deal there easier. You build a center of gravity, and eventually investment starts moving toward you instead of you chasing it.
Buy in the right path. I can't promise land doubles every time, because it doesn't. But you have to learn how to read a corridor. Dickerson Pike is not the only place in America where land doubled in four years. Maybe yours only goes up 50%. Imagine sitting on dirt for a few years, doing nothing, and getting 50%.
Build it in public the whole way. This doesn't mean become an influencer and post your breakfast. It means be vocal about the wins and the losses. You all know every bad thing I've been through because I don't hide it, and that's precisely what built the reputation.
I have bought deals because of Instagram posts. We've bought deals because I said out loud that I was heading to Chattanooga and asked people to send me things. Building in public is how I've landed partnerships, banking relationships, and consulting work, and it's why the CRE Accelerator exists with more than 160 members in it.
If people don't know what you're doing, how are they going to know to bring you deals? How are they going to know to invest with you? That's the entire game, and it's free.
One last thing. You can absolutely find deals by cold calling all day, and it works. Same with mailers. But that stops paying you the second you stop doing it. Relationships and off-market deal sourcing pay you for the long run.
Key Takeaways
Buy right and you buy room to be wrong. My first proforma was fiction and the deal still worked, because the basis was right at $97 a foot.
Get paid to learn. Brokerage, lending, or management all put you in the room. My first purchase came straight out of my own client file.
Boring is a feature. Parking lots, dirt, and abandoned buildings have less competition and better margins than anything you'd brag about.
A no is a fit problem, not a deal problem. Forty-nine lenders passed on Salt Ranch. It's open and selling out weekends.
If it's not too early, it's too late. Dickerson Pike land went from $1M an acre to $2.5M an acre in four years while everyone told me to wait.
Reputation compounds faster than capital. Our last five deals came from relationships, not listings. None of these lessons is about picking buildings.
This article is adapted from an Office Hours livestream on the Tyler Cauble YouTube channel. We go live every Tuesday at 8:30am Central.
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