January 6, 2023

JF3046: Commercial Brokering with a Banking Background ft. Brian Tobler

Brian Tobler is a commercial broker at Malman Commercial Real Estate, which focuses on investment sales opportunities through buyer/seller representation. In this episode, Brian shares why he left the commercial real estate banking industry after 15 years, his thoughts on the future of the multifamily and industrial asset classes, and more.

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Brian Tobler | Real Estate Background

  • Commercial broker at Malman Commercial Real Estate, which focuses on investment sales opportunities through buyer/seller representation.
  • Portfolio:
    • Two speculative for-sale fourplex deals in Denver
    • JV deal for a 200K sq. ft. owner-user industrial deal in the Denver area
  • Based in: Denver, CO
  • Say hi to him at: 
  • Greatest Lesson: Real estate is an incredible asset to own and invest in. The sooner you get in, the better.



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Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel, and I'm with today's guest, Brian Tobler. Brian is joining us from Denver, Colorado. He is a commercial lender at Central Bank and Trust, and he is also a real estate investor, and now a part-time commercial broker. Brian's portfolio consists of two speculative for sale duplexes in Denver, a JV deal for 200,000 square feet... Brian, thank you for joining us, and how are you today?

Brian Tobler: Good, doing great. Glad to be here.

Ash Patel: Brian, it's a pleasure to have you. Before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?

Brian Tobler: Yeah, so interesting, in the intro I've made a little bit of a change. So I've been involved in commercial banking for the last 15 years, primarily in commercial real estate, a lot of construction and development lending in the Denver market, infield deals, and just recently made a move full-time into commercial real estate brokerage, so continuing to stay in the space and play actively in the Denver market when it comes to commercial real estate.

Ash Patel: Brian, Denver is on fire. Why would you leave the commercial real estate banking industry?

Brian Tobler: [laughs] Well, that's a great question. I think it's just personal preference. Banking - as we all know, rates are high, things have changed. The bank I was at, as a matter of fact, it was merging, so it seemed like a great opportunity to make that exit and to try out the brokerage world. It's always been something I wanted to try to do, and I think we're all in this world, in this space, I guess, if you will, to make money and to lift and bless others, so I think that opportunity is very possible in the CRE brokerage world.

Ash Patel: Brian, I would imagine in your 15 years in banking you've got one hell of an education on all different asset classes. What were those asset classes? Did you do multifamily, retail, ground-up development?

Brian Tobler: I pretty much lent money on all types of real estate. So you can go as small as fix and flips, all the way up to single-family, speculative construction loans, to multifamily townhome projects throughout Denver, I've done industrial deals, retail deals... So just really kind of everything. Land deals... It's been a broad spectrum. So it's been nice to see all the different asset types and how they impact the market, and the different investors... And sometimes you're dealing with private capital, other times you're dealing with more institutional capital or more savvy family offices, if you will...

Ash Patel: I feel like my next question is asking a parent who their favorite kid is, but what's your favorite asset class? As a banker -- let me rephrase that. What's your favorite asset class in terms of maybe stability and risk, and then in terms of returns?

Brian Tobler: My favorite asset class is probably a combination of two; probably industrial and multifamily... The reason being is those are kind of what I've invested in and played closer to on a personal basis. But I also see that there's a high demand for both. So when there's high demand and limited supply, I think you have a cushion there as far as your risk goes.

Ash Patel: And the future of multifamily and industrial - what are your thoughts?

Brian Tobler: The future of multifamily and industrial - well, I think we may become a nation with more renters than owners. We'll see what happens with interest rates and prices of homes, but we're still under build. I think the build to rent communities are an interesting concept. Apartments with amenities offer a nice place to live for people, versus a small home that's maybe not great, maybe older, that's affordable for folks... So you've got to think about people that are between college and probably early to mid-30s - they're building their careers, and the price points, largely on the coasts and in Denver in particular are very high and kind of out of reach for a lot of folks, unless they have a pretty high paying income.

Ash Patel: Brian, I know you're not a banker anymore. Last question I'll ask you about banking.

Brian Tobler: No worries.

Ash Patel: Can you give us some things that people that were applying for debt - some things that they did very well, that impressed you, and things that people often did wrong, that maybe caused the deal not to get funded?

Brian Tobler: I think the best thing you're doing if you approach a banker or a lender, even if it's not at a traditional bank, is to have your ducks in a row, if you will, the investor or the borrower. And what I mean by that is have your personal financial statement ready, have your tax returns lined up, have the information that's going to be asked for like at every single place you go to borrow money... I think the challenge bankers face is somebody comes to them with a short timeline on a deal, and they say, "Hey, I need to get this closed ASAP", and you're like, "Okay, well, we could probably do that if I have your information within the next business day or two", and almost without fail, it's three, four or five business days later they still haven't sent it. So I think that helps borrowers tremendously. It builds rapport with the banker.

And then just being honest; nobody likes to find out surprises, things that were hidden down the road. I think it's just -- be transparent, the banker will appreciate that, and other people, too. So just have the conversation, and if there's something that needs to be brought up, bring it to light, because there's a high chance that it will come to light, and if it's right before the deal closes, that could kill the deal. And a lot of times there's earnest money on the line, and that can be significant if you're talking a multimillion dollar property.

Ash Patel: Brian, thank you for that. Multifamily people, for the most part, get very competitive rates, and they often treat lenders as commodities. Us commercial real estate or non-residential commercial real estate people - we build relationships with lenders. So your thoughts on how important that is, and really, what's better - building a relationship with one lender, maybe paying a little bit more, or brokering out your lending?

Brian Tobler: Man, that's a really good question. I think I wouldn't just have one lender. I would maybe work with two or three in every market. Now, you might favor one of those, but I would have two or three that you're developing a relationship with, if you're not brokering. Now, if you're going to a loan broker, or a brokerage office, and you're going to have them source the debt and equity for you, that's kind of a different game. That's certainly more commodity-based. That's their job, is to find that deal for you. But at banks, I think it does pay off to have a relationship, and if you can build up a relationship over time...

A lot of my best clients didn't only work with me; I probably did probably a third to a half of their business, and then other banks in town would do something similar. And it's kind of that old phrase of "Pigs get fatter, hogs get slaughtered." So there's plenty of business to go around, but relationships do matter, and when you get down to the wire of a deal, if you have a relationship, that tends to go much more smoothly than if you're just commoditizing the lender and saying, "You're the cheapest, you're the easiest", you get down to the wire, things don't go right, and sometimes that may be retreated the last minute, right? That banker may say "Yeah, I can't honor that anymore." That's where people get really frustrated, but if you shop a lot and you're not loyal to anybody, sometimes that happens.

Ash Patel: Thank you. And to your earlier example, I've brought my lender that I've used for over a dozen years deals where we had to close within three weeks, and they get it done. So the relationship for me has helped a lot. Alright, Brian, let's dive into your mindset when you were a banker and wanted to go into being a broker. What was going on in your head?

Brian Tobler: I think if I'm honest, a little bit of greed, maybe a little bit of ego... But I think in the banking world you're relatively capped; you get a nice salary, you get a bonus based on your production... Whereas a brokerage, you certainly eat what you kill, but the sky's the limit, there's no cap. So if you double your production, you're going to double your income. If you triple your production, you're going to triple your income. Whereas in the banking industry - nothing wrong with it, but you could have a bang up year and you're only marginally increasing your income. So my long-term goal is really to earn more and to invest more, then create that freedom to where hopefully long run I can just passively invest and kind of unwind off the transactional treadmill that a lot of us are on.

Ash Patel: Brian, re you brokering residential, commercial or both?

Brian Tobler: Primarily just commercial. I think family and friends for resi, but the commercial deals is kind of where I'm going to focus my attention.

Ash Patel: And how does somebody break into that market? Listen, there's a lot of competition, there's a lot of established players, especially in Denver. How did you penetrate that market?

Brian Tobler: Great question. It takes a lot of networking, a lot of time, and there's a lot of options. There's the big shops, there's the boutique shops, there's the startups... A lot of different angles somebody could take; you can niche down on a product type... So it really just depends on what you're looking for. So I networked a lot... I have had relationships with a lot of guys already in the market, so I took advantage of that... But a lot of networking, and then I just interviewed guys and talked to folks until I felt comfortable with someone that I felt like was a good fit, and that's where I settled. But I think there's a million options, and you're right, it is very difficult to break into, especially mid-career. I think the large shops, CBRE, JLL, Cushman...

Ash Patel: Churn and burn some of the younger people.

Brian Tobler: Yeah, you got that right on the money. So they're looking for college grads that are just worker bees, right? They just want to grind them, and eventually, some of those guys will stick around and be running a team in 20 years and be killing it, but a lot of them fall out, too.

Ash Patel: Number of hours that you put in right now.

Brian Tobler: [laughs] It's like the old saying, when you work for somebody, you think you work a lot of hours, until you get out and you're on your own, then you really know what that's -- I'm probably working 50 hours right now.

Ash Patel: And which route did you choose? Working for a startup, a boutique, a big shop, on your own?

Brian Tobler: Yep. Good question. Startup. It's actually a guy, he's got a fair amount of experience, he worked for a larger shop in the Denver area, and he spun off and started his own, and he's building out a team... So I joined him, and so far so good. It's kind of really what I was looking for, is that - speed to success I think is finding somebody that can kind of coach you through some of the things... I know a lot about real estate and banking, but brokerage is a different angle, so I try to fill in those gaps.

Ash Patel: Is this somebody following the traditional brokerage model? Or is it somebody trying to flip it on its head? Is it somebody trying to disrupt the industry?

Brian Tobler: I don't think it's a disrupter, I think it's more traditional, but what I like about the brokerage is we can pick and choose what we want. I'm not niched down where I join and say, "Hey, you're going to only do office, you're only going to do retail. You can only do investment sales, you can't do leasing." So I have this whole broad -- I can represent landlords, tenants, buyers, sellers, work with investors, I can really choose any product type I want... So it's really my job to develop a business plan that I want to pursue, and then he's the support behind it, to kind of run with questions, or just specifics to brokerage, if you will.

Break: [00:13:00.19]

Ash Patel: The all-important pocket deals - explain that to me, the pocket deals. How does it work? Why not market it? And how do investors get pocket deals from brokers?

Brian Tobler: So pocket deals, kind of the quasi off market deals - I think there's always that argument of what's an off market deal, what's a pocket deal... The off market deals, I think something that you find is it's somebody you cold call or you find that's totally willing to sell; you bring something to them, a buyer, and it's all off market, right? Whereas the pocket listing is something that I think is a little more available, but you kind of have that in your pocket, if you will; you can send it to your buyer list, and kind of vet that deal, and try to ultimately work both sides of it, if you want. So it gives you that upward advantage. And then there's obviously the on market deals, where everybody sees that through Costar, Crexi, or LoopNet... Different levels.

Ash Patel: Now, on those pocket listings, do you see where a lot of brokers will not market them? They'll keep them as pocket listings specifically to get the buy and sell side of the commissions?

Brian Tobler: I think so. If I'm honest, I think that's exactly why they do it, is to try to get both sides of the listing.

Ash Patel: Because I can't think of any other benefit to the seller, especially. The broker - sure; whoever's buying it feels great that they got a pocket listing from their favorite broker. They can get more, the broker builds a great relationship where it's kind of like just keep feeding this one investor, this group of investors' deals. But from a seller's perspective, if I'm selling a strip mall, I don't want that to be a pocket listing. I want you to scream it from the top of the mountains, "This is for sale. Here's the numbers." Do sellers often know? Do they follow up and find out if their deal is in fact on the market, or if it's a pocket listing?

Brian Tobler: That's a great question, and I think that's something that sellers can interview their broker or ask them, saying, "How are you going to treat this?" Because what can happen is you get the listing agreement in place, and it's easy enough to tell the seller, "Hey, I'll have this active by next Wednesday", let's say. Let's say that's in a week, and we get the marketing stuff and all that done, and in the meantime, they're out, pitching it as a pocket listing, and trying to find a buyer so they can bring both sides to the table.

So I think there is some time where you're going to market it and you have that opportunity to do that anyway, because it's not ready to go live and active... But you're right, I think to broadcast that, whether that's through Catalyst or through Crexi, Costar, and just get it out there to the general public - that's certainly more beneficial to the sellers, the owners, because they're getting a broader audience... And I think what they want is the most competitive price; they don't want a broker jerry-rigging the deal in the middle so he can get a bigger commission.

And I think that's where you've got to know what kind of broker you're working with. If the seller is okay with that, then there's nothing wrong with it. But if the seller is like, "No, I don't want this to be a pocket listing where you're trying to find a buyer off market first. I want you just to get this out, fair game for everybody, so that I get the highest and best, and we can move on."

Ash Patel: Yeah. And I guess there's definitely circumstances where pocket listings make sense, where if the sale is very discreet, you don't want your tenants to know...

Brian Tobler: Yep.

Ash Patel: Yeah. Awesome. Brian, when you're on the buy side, representing buyers for commercial real estate, do you help them get all their ducks in a row when they approach the banker?

Brian Tobler: Well, I just made the transition, so I'm actually working with a potential buyer now, and that's exactly what I'm doing with him. He's a small business owner, he's like, "I don't know if I'm gonna qualify." My job is to provide value, so I said, "Hey, let's have a meeting. Let's sit down. I've got 15 years of banking experience; bring your financials to the meeting, I'll look through it, I'll tell you exactly how the bankers are going to look at it... And if you do to qualify, if you don't qualify, if you don't, what you need to do..." I kind of give him that guidance, and then if he doesn't qualify, then let's figure out a lease and get some more time under the belt where you then may qualify. And there's different options. Typically, if somebody's worried about qualifying, SBA may be the best route for them, just because lower downpayment, they're more willing to take air balls on deals, whereas a conventional loan - they're not going to take an airball; they want collateral to fill the whole bucket.

Ash Patel: That's a great value-add, having used a broker with tremendous amount of banking experience. Another question that came to mind - why not double dip and be the broker on the commercial side, but also a lending broker?

Brian Tobler: That's something I've considered. I'm not doing that yet or right now, but I've certainly thrown that around... So as I get down the road a little further, it may be something I explore.

Ash Patel: From a buyer's perspective, I'd love to have somebody that's a one-person shop, where you could find me the deals, walk me through it, be the broker, and also get the loan done... It's less people I have to talk to, less moving parts... So I think it's a great idea.

Brian Tobler: Yeah, well, that is a great idea. [laughs]

Ash Patel: Get it done, and then come back, and we'll talk about it.

Brian Tobler: Yeah.

Ash Patel: Right. What is your best real estate investing advice ever?

Brian Tobler: I think the best real estate investing advice I would give is take the strategic risk, but don't stretch for deals. There's plenty of deals, so if you feel like you're stretching, probably not the right deal. Just take the risk, but not too much risk. You can get burned pretty badly in this game. I know the last seven, eight years, 10 years I guess even now, has all been up. Everybody looks like a hero, right? The appreciation in the markets. Everything has just gone the right way. So we're going to see the real players and the real operators stand out now, as things are becoming a little more challenged in the marketplace.

Ash Patel: Brian, how should people qualify brokers? ...whether they're looking to buy something or sell something.

Brian Tobler: You've got to just interview them, ask them what they're going to do for them, how they're going to market the property, how they're going to find them a property, depending on whether they're looking at the buy or sell side, and then just gauge, does that fit what they're looking for? And are they comfortable with this person? I think you've got to have a personality match to some extent, know who you're working with.

Ash Patel: When you're working with a buyer, do they go exclusive with one broker, one buyer's rep, or do they have a number of them?

Brian Tobler: I personally don't like to lock up the buyer on an exclusive agreement, because I feel like if I bring them the deal, it's kind of the unwritten rule of "Use me." Now, if somebody else brings you the deal, then by all means, use them; you keep your options open. So I think that makes me work harder, because I want to win the deal. But at the same time, I think it's hard for a buyer to commit to just one broker when there's hundreds of brokers out there looking at deals all day long, and it's to their best interests maybe not to go exclusive.

Ash Patel: Great answer, and I love your mindset. Brian, are you ready for the Best Ever lightning round?

Brian Tobler: I am.

Ash Patel: Alright, Brian, what's the Best Ever book you've recently read?

Brian Tobler: Tons of good books out there, I have to qualify that... But "The power of one more" by Ed Mylett is just a powerful book. It's a fast read, it's a good read, and highly recommended.

Ash Patel: What was the big takeaway from that book?

Brian Tobler: It's the title, right? Do one more, go to the next level, don't give up, don't stop, you've got to push in life to get what you really want... And through the chapters in the book, he gives so many examples of how you can do that. But again, highly recommended. I think it's a fairly popular book right now, but yeah, that'd be one I'd offer.

Ash Patel: Brian, what's the Best Ever way you like to give back?

Brian Tobler: Well, I like to coach and mentor others with less experience. I think that's a great way that really fills my bucket. But in addition to that, just general service; I'm involved heavily in my church, and then financial donations. I know that's an easy way to give, but kind of a combination of the three.

Ash Patel: Brian, how can the Best Ever listeners reach out to you?

Brian Tobler: The best way to get a hold of me is to just sync with me on LinkedIn. You can find me under my name, Brian Tobler. I'm in Denver, Colorado, so if you're interested in connecting and want to chat more, feel free to reach out and let's do it.

Ash Patel: Brian, thank you so much for your time today, giving us a perspective from 15 years of banking, teaching us some of the nuances of becoming a broker... Thank you very much for sharing all of that today.

Brian Tobler: Yeah, it was great. I appreciate the time.

Ash Patel: Best Ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five-star review. Share this podcast with someone you think can benefit from it. Also, follow, subscribe, and have a Best Ever day.

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