I recently went one on one with Terry Painter. Terry is the founder of Apartment Loan Store and Business Loan Store and the author of the new book The Encyclopedia of Commercial Real Estate Advice.

Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. ​How did you get here? ​What experiences, failures, setbacks or challenges have been most instrumental to your growth?

Terry: Let me start out by telling you how I got started in this business. In 1996, I owned a small fast-food chain of French restaurants in shopping malls called “Deli La France”.  What I loved the most about this job was designing and building the restaurants, putting the menus together and training the staff. I get bored easily so, about 6 months after opening one, I had no interest in working there anymore. I would start obsessing about opening a new location. My wife and my banker had a meeting with me and both said, “No more restaurants, you’ve got to slow down”.

I realized I needed a career change. During the meeting my banker, Jerry Burns, raved about how much he loved his job putting loans together for businesses and commercial property investors. A light bulb went off in my head. I wanted to do what he was doing and I asked him how I could get started. He told me it would take about 2 years to learn how to do his job. I had taken out over a dozen business loans and knew some of the jargon. I found a company that trains loan officers nationally called The Loan Consultants. They trained me to start my own mortgage company. I still use their techniques to train loan officers today. Everyone except my mom thought I was nuts doing something I had not done before. They all told me I would fail. 

Starting a commercial mortgage brokerage was a steep learning curve. I had no idea it was such a technical field. I certainly didn’t have a problem finding customers as it seemed that everyone needed money, but trying to match borrowers and properties with the lending criteria of my 20 plus loan programs wasn’t easy. Most instrumental to my growth is that I found something I really loved doing. Meeting with really interesting entrepreneurs and putting their deals together was fun to me. So I got really good at analyzing deals and matching them to loan requirements. This is the part of my job I love the most. Your odds of being successful are unbeatable if you love the work you are doing.

I still barely made it through my first year in this business and almost went through my savings.  Then my banker friend called me to see if I could do some of the loans his bank was turning down. This was such a good fit as most of my unregulated money sources were much easier to qualify for. He told me, “Hey, when we turn down a customer, they usually get mad as hell and threaten to take their money out of our bank. If I refer them to you it will be a win-win for us both since you can’t take deposits.” Soon I was getting referrals from 5 banks for loans they were turning down. By 2006, my firm had grown to 14 employees and $79 million dollars in annual loan volume.

Adam: What do you hope readers take away from your new book? What are your best tips on the topics of real estate investing, valuation and dealmaking?

Terry: I work for a lot of people who have become mega-wealthy by investing in commercial property.  I wrote my book to encourage more people to get into this field and have the tools to be successful in any area of commercial real estate they are interested in. The book has great tips and pitfalls to avoid from my 24 years of closing hundreds of commercial loans. These include guidelines for getting started, evaluating risk, doing due diligence, how to fake it until you make it when raising investors, repositioning, managing, and trade secrets on how to get the best rate and terms on your loans.

Sure, it does make sense to start out with one or two rental properties. But instead of striving to own 6 rentals spread all over town, why not own one 12-plex apartment building? Now you have the benefits of what’s called “economy of scale” where you can manage and maintain a whole bunch of units under one roof and the expenses per unit drop dramatically.  Best of all, this larger investment will have more net income, appreciation, and tax-saving depreciation. 

Adam: How do you know if a deal is worth pursuing? What advice do you have on how to best assess a potential opportunity?

Terry: Most often, deals that appear to be unbelievably good are bogus. You seldom get more than what you are paying for in real estate. I recently got excited about buying a 17-unit apartment complex in Portland, Oregon that was priced low. Although it was not mentioned in the marketing flyer, I found out that all the units were master metered. This meant the landlord was paying all the electricity and made this a bad investment. Most importantly, you really won’t know if a deal is worth pursuing until you do your due diligence and really get to know the property after your offer is accepted. This means determining the quality of the income and physical condition of the property. My book gives you step-by-step instructions on how to do this and how to negotiate the sales price down if the seller has overpromised and under-delivered.   

It’s ideal to find a property that is in a good safe neighborhood and has 2 or more upsides.  These can be under market rents, the need for inexpensive cosmetic upgrades that will increase rents or a property that you will likely have to burn the midnight oil to find that offers the opportunity to build more units or bring in better quality tenants who can afford higher rents.    

Adam: What are key pitfalls to look out for and how can they be avoided?

Terry: The number one pitfall when investing in income property is falling in love with it, absolutely having to have it and then paying too much for it. This only happens when an investor has an emotional attachment to a property.  

Another mistake first-time investors often make is choosing a property that is far from home. For starters, it’s going to be a learning curve to know the market and know if it is overpriced. You will likely have the experience to estimate the value of properties in your own backyard. But worse yet, how often are you going to check on a property if you have to get on a plane to go visit it?

Adam: What are your best sales and marketing tips?

Terry: My loan officers are my sales force. Some of them only land deals when there is little or no competition. Face it, all businesses have competition. So it is imperative to know the quality and pricing of your competitors so you can offer something better. I wish I could tell you that just having the best quality product or service will guarantee success. But I think most customers are most concerned about price today. And with the internet, they can shop you in a matter of minutes. You absolutely have to price your product competitively and then give the perspective of customer testimonials or references that give them confidence you can deliver the quality they are expecting. Being able to tell our new clients that we have a 94% success rate of closing our loans as proposed is something we can sell. But we have to know that our rates are lower than our competitors or we won’t land the deal. 

Adam: In your experience, what are the defining qualities of an effective leader? How can leaders and aspiring leaders take their leadership skills to the next level?

Terry: Years ago, I learned to manage with encouragement instead of a big stick. I was evaluating a loan officer who was shy and not good at talking to customers. I criticized him for having the lowest loan volume on our team. He felt humiliated and quit. I called him, apologized, and told him he was of great value to me as he had the highest rate of closing loans as proposed. When he came back, I then gave him a script for talking to new clients and role-played with him until he was good at it.

Adam: What is your best advice on building, leading and managing teams?

Terry: I have found that to be productive it is important to get all your co-workers to agree to the tasks they will be completed by a specified date. This takes meeting with them weekly to help them work out problems if they are falling behind. They have great software these days like Podio for teams to time manage projects.

Adam: What are your three best tips applicable to entrepreneurs, executives and civic leaders? 

Terry: 

1. Really encourage your co-workers to shine.  Acknowledge them often in front of the team for their ideas and work quality. What you really want is to encourage innovation. You will find that encouraging creativity in each team member will bring in the best top-notch technology that will make your business soar.  

2. If you are a workaholic like me, be sure to plan time off to avoid burnout. You want to do this preventatively before you are at the end of your rope. This might be taking a 3 day weekend or an entire week off to rejuvenate. This is about feeling good, so you keep loving your job and have the energy to be your best. 

3. As a leader, hire people who can do a job better than you can. In other words, even if they cost more, hire the best workers you can find. This will cut down immensely the time spent overseeing and correcting their work and free up more time to run the company.

Adam: What is the single best piece of advice you have ever received?

Terry: Reading Stephen Covey’s book over 30 years ago, The Seven Habits of Highly Effective People, I learned about prioritizing tasks each day by how productive they are. I am prone to distraction and have to be very disciplined to first complete the high imperative tasks that will create the most results for the least amount of time.   

Adam: Is there anything else you would like to share?  

Terry: I have found that when running or owning a business, it is especially important to know where you want to end up. This means not only taking responsibility for designing your business to be successful, but to fit your ideal lifestyle. For many years, I couldn’t wait for the weekends to be over so I could get back to the office. This changed eight years ago when I found myself exhausted working 60 hour weeks. I had built a company where over 70% of our loan volume was being referred to me personally. This had to change. I had a vision of myself walking mornings on a beach, my team working the deals and my having time to write. I immediately started passing my loan volume on to my very capable team members.

Right now is the best time of my life. I spend my winters living in my Caribbean home and start out my mornings walking on the beach. I get to my desk around ten and spend about three hours writing about commercial real estate investing.  Then in the afternoon I enjoy consulting with my loan officers on their difficult deals. But it isn’t by accident that I am living my dream. I consciously made a decision to leverage the success of my business into my ideal lifestyle.  


Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.

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