The Youth Brigade

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Never mind that Enrique Viramontes is just 24. As one of Marcus & Millichap’s top-producing apartment brokers for the firm’s busy downtown office, he is already making six-figure commissions, driving a $70,000 BMW 645 and selling his Downey home to move close to the ocean.


While vacationing in Mexico last week, Viramontes said he expected several deals to close escrow, providing him $24,000 in commissions without leaving the poolside. “I’m already well over where I was last year,” he said of this year’s sales volume. “Now I’m starting to buy properties on my own and take the whole thing one step further.”


He’ll need to be careful. Los Angeles, like many large real estate markets, has its share of young high-fliers who have used tenacity, energy, quick wits and an element of luck to score big in what’s always a cutthroat market. But real estate is no longer a seat-of-the-pants profession, where a golf game or martini-and-steak dinner ensures a big piece of business. While that still happens, the industry has morphed into a numbers-and-analysis game, and the entry-level folks must attend to lots of detail work.


“People who are using real estate professionals are really shrewd and Mallory LLP’s Century City office. “They don’t want to go out for drinks and hang out and not get value.”


As a rule, 20-somethings still have some learning ahead of them. In the Business Journal’s list of 20 up-and-coming real estate professionals, 17 are in their 30s.


“It’s not for the faint of heart,” said Chris Manning, a finance professor at Loyola Marymount University who taught Viramontes. “The people who are willing to put in the work are the ones who will distinguish themselves.”


Manning said that Viramontes was one of his best students, though he didn’t always have the highest grades. “He wasn’t even an A student,” Manning said. “In real estate, working hard is much more important than being brilliant. In real estate, cleverness is more important than brilliance.”



Spotted his niche


So is sweat. Viramontes works 12-hour days, six days a week. He burns through 6,000 minutes a month on his cell phone from the time he spends on the road.


When he first broke in two years ago, he went seven months before making his first commission. During that time, he lived off the income from a profitable day care center he had opened using grant money and savings while still finishing his undergraduate degree. “I did this project in school regarding government subsidized day care facilities,” Viramontes said. “So I decided to take it one step further.”


It was during the downtime that he spotted his niche. A flood of Spanish-speaking investors were looking for advice on real estate deals but had few brokers who could help them. “I found a huge market intact,” said Viramontes. “Now between 40 and 60 percent of my business is Spanish-speaking investors who don’t have brokers representing them who are well versed in investment real estate.”


Most students are taught how deals are financed and valued, but the real test comes in the field, as new brokers are required to bring business into their firm.


“It’s not something you can advise someone on,” said Sonia Savoulian, director of alumni and student services for USC’s Lusk Center in Real Estate. “Clearly education takes place in the classroom but there’s also an immense amount of job training once they get out into the field.”


Tobin McAndrews, a 26-year-old associate at Coldwell Banker Commercial Westmac, has found early success in his first four months. (Unlike many firms, Coldwell Commercial Westmac pays a small salary while its associates get on their feet.)


So far, McAndrews has been picking up listings that other brokers in the office feel are too small or too much hassle. That includes listings that are far from the office and in low-income neighborhoods.


He recently signed on to sell a South Los Angeles produce market at 10215 Vermont Ave., near the intersection with Century Boulevard. McAndrews got the $700,000 listing because when the owner called the office, he was the only one who spoke Spanish.


“When you’re young, you have to sell what a young person has to sell, which is enthusiasm,” said McAndrews, who wants to specialize in sales and leasing of retail properties. “You’re hungry and that’s what the older guys want to see. It’s your selling point.”



Find a mentor


McAndrews also has a $2.2 million listing for three duplexes in Culver City at 10809 Jefferson Blvd. that he expected to enter into escrow last week. The potential buyer wants to raze the site to build condominiums.


Instead of going for a new car and clothes, McAndrews plans to invest the commissions he earns. He drives a pickup often with surfboards in the truck’s bed. “I’m young and I feel OK with that,” he said. “I don’t feel the need to be flashy.”


Besides having a strong work ethic and an outgoing personality, it helps to find a mentor. That offers the chance to make some commissions while learning the business and making contacts that could lead to future deals. It also helps brokerages curb frequent turnover among new associates, which saps the firm of time and money related to the constant hiring process.


“It’s a cyclical business and employers place a premium on employees who will be in real estate for the long haul,” said Savoulian. “They want people who will be there for the upswings but also people who will be around in the low parts, too.”


Jeffrey Welch, 27, an associate director at Cushman & Wakefield Inc., worked for several years under a senior broker and the training is starting to show. He recently returned from an Asian trip where he negotiated office deals for O’Melveny & Myers in Shanghai, Beijing and Hong Kong.


“For people to be successful, the key is to identify mentors early,” Welch said. “So many people started out with me and the numbers dwindle year by year. A lot of that is because people who left haven’t hooked up with the right mentors in the company.”


Welch said there is a rush among young brokers just starting out to impress clients, but most of those are pitches for large short-term deals. That is often a mistake and can even be harmful to a career.


“They want to jump right into it, but the people who go too fast are the first out,” he said, echoing the comments of top-tier real estate executives. “People respond to the short term and they don’t think in the long term. You need to be thinking five years down the road because that’s where people drop out.”


Mismanaging personal finances is the other pitfall Welch says he commonly sees. Balancing a budget can be difficult for brokers just starting out because commission checks are sporadic.


After a long spell with little income, many brokers are tempted to spend a commission check, but Welch said that unless a year’s salary is already saved, the money should go into the bank. Besides, Welch said material things don’t result in new business. Still, he recently traded in his ’95 Chevy Blazer which lasted him since college for an Audi A4, though he noted, “You are chasing the wrong type of business if your car matters.”


Walt Torous, a UCLA professor of finance, said the real estate industry has become more intertwined. Investment firms need the brokers to ferret out deals, while brokers need to understand what developers are building to gauge the impact new properties could have on the market.


“Real estate is changing,” Torous said. “The influence of Wall Street is only growing, and I think it would behoove a student today to get a background in finance and related fields.”



Quick transition


That’s what Derrick Moore, a third-year broker with CB Richard Ellis, has seen in the field. He said clients are increasingly looking for brokers who not only know the industry but the economics of the deal.


Moore said he’s learned that if a deal doesn’t match his specialty, he’ll bring on someone who understands it better. Though it may narrow his commission, the client is more likely to return.


“The marketplace is becoming increasingly more sophisticated, where having a survey and running a tour isn’t enough,” Moore said.


“You have to be smart enough and humble enough to find out who is good at what you need and bring them in, even if it means splitting the commission,” he said. “A lot of young brokers fail at that. They start counting the money and they don’t want to split a commission if they need help.”


Meanwhile, Viramontes has expanded into investing in apartment buildings, using his own money (along with that of his investors).


Raphael Bostic, an economist at the University of Southern California’s Lusk Center for Real Estate, was surprised that Viramontes has been able to begin transition so early from broker to investor.


“It’s very odd for someone of that age to be doing that level of business,” said. “There are always prodigies and whiz kids who have an intuitive feel for the market, but most people don’t start off nearly that well.”

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