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My First Million: Barbara Corcoran, The Corcoran Group
How a self-made salesperson took $1,000 and took on the titans of New York's legendary real-estate industry.
Posted 6/ 2 11 at 5:00 PM | My First Million, Money, Advertising & Marketing, Sales, Leadership, Starting a Business, Media, Real Estate
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A A AIf Woody Allen ever starts making movies in the Big Apple again, Barbara Cocoran's New York entrepreneurial story would make a great screenplay -- girl meets boy, boy gives her $1,000 to start a real-estate firm, boy cheats on girl, girl builds multimillion-dollar business as revenge.
Since selling The Corcoran Group in 2001 for a reported $70 million, Corcoran has become the feisty face of residential real estate in the Big Apple and beyond -- she has penned four books, serves as a real-estate contributor on NBC's Today and helps snare rising entrepreneurial stars as a judge on ABC's Shark Tank.
Her latest book, Shark Tales: How I Turned $1,000 into a Billion Dollar Business, does just that -- chronicling Corcoran's remarkable rise from a 23-year-old, wet-behind-the-ears broker into a New York real estate mogul mentioned, much to his chagrin, in the same breath as Donald Trump. In fact, her story of chasing big dreams is why so many set sail for New York in the first place. At least a few of them have rented apartments from Corcoran along the way.
"I had 22 jobs before I started in real estate and I had a very lucky break. I was waitressing at a diner and met my boyfriend and soon-to-be partner Ramon Simone at my counter. It was Ramon that would give me my $1,000 that would start my real-estate company. I was 23, I didn't know any better and there was a great charm in not knowing what to be afraid of and starting young. That was my very first lucky break.
"A thousand dollars 30 years ago bought an awful lot. I was able to afford a three-line ad in The New York Times, I was able to run the ad for about eight weeks and be able to pay for my new pink princess phone. Frankly, real estate is fairly easy -- you put an ad in the paper, you hook in a body and you try to rent or sell them a home.
"I learned very early on that creating a great advertising hook was key, so I took a typical one-bedroom, convinced the landlord to put a half-wall between the dining L and the living room and I relabeled it a one-bedroom and den. Same square footage, but I started advertising one-bedroom and den. Every other competitor out there, much larger than me, was advertising a one-bedroom for the same price and that's what hooked in a lot of customers. So I got a lot of bang for my buck.
"In the New York old-timer days, back in the mid-'70s, everything in New York City was an apartment for rent. There were virtually no co-ops or condominiums to be sold. So, of course, I got my start in the rental business -- a great business, because you rent your apartment on a Monday, you get your commission on a Tuesday. Not a bad way to get started.
"Everything went bonkers in New York City in the early '80s, once the landlords of thought of a way, a legal way, to convert rental buildings to cooperative buildings, and it seemed overnight that every single rental building in Manhattan was converting to a co-op and that created a huge opportunity for people in the real-estate trade business.
"I came across just about every wacky, harebrained type of character in New York because New York has always attracted crazy people. I think the most bizarre experience I had was trying to unsuccessfully sell an apartment to Janet Jackson when she was at the height of her fame. I actually locked her in a bullet-proof van, one she insisted I rented, with her two huge dogs -- they must have been six feet tall -- her three bodyguards, her horrific boyfriend and her future mother-in-law. And I had to serve them pizza to lock them in the back of that car and not let them out of my grip. Spent the whole day and sold them nothing.
"One of the more interesting calls I got the second year I was in business was from a guy that owned a 14-room apartment at the Dakota on Central Park West. He said to me, 'If you can sell it, they don't have to pay me. I'll give it to the buyer for free, if only they'll take up the $1,200 maintenance for me.' And you know what, I advertised that Dakota for months and never found a buyer, go figure! What was I thinking? I should have robbed a bank and bought it for myself!
"Most people think that salespeople have to know how to close, they have to know how to pitch and they have to win people over. The truth of the matter is, what you really need to know is how to get the people in your hands in the first place. If you can drum up business, you at least have people that can buy or sell. And on top of that, it has nothing to do with closing. I never knew how to close, I used to talk people out of buying things. But what it has to do with in the real-estate business is nothing more than trust. If people trust you, they're going to buy from you, if they trust you they're going to recommend you -- and it's in the recommending that builds the empires in the real-estate business.
"The biggest sales mistake many people make today is that they try to hustle someone for something they half-like, or try to push them to close when the people are not ready. It might make you a deal here or there, but the customer is going to hate you after they close -- if it even works, it rarely works. And most importantly, you're not going to get more business.
"What every great salesperson has, that is always underestimated, is not their ability to hustle so much. It's their ability to get up after they've been hit. Handling rejection is 90 percent of what sales is all about, and the better you are about getting up quickly, and not spending too much time feeling sorry for yourself, that's what determines who are the superstars.
"The biggest stumbling block I ever had was when my boyfriend married my secretary. I had been raising his three daughters at the time and he came home one night -- and I'm dumping out the pasta making dinner for his kids -- and he says, 'I have some bad news. I'm going to marry your secretary.' I just couldn't believe it. That was the worst block for me personally to get over. One, she was prettier than me. Who wants to lose a guy to someone who's prettier than they are? Not me! She was 10 years younger than me. I was only 30, she was 20, she looked better than me. I hated her and I hated him as a result of it. But you want to know, when I had the courage to end that partnership, he gave me the best gift of my life. He said to me, 'You'll never succeed without me.' And I knew, right then and there that moment, I thought, 'Oh yeah? I'd rather die than let you see me not succeed.' And you know what? That was an insurance policy for success. Every time I was thinking of failing or giving up, I would think of one more thing, just because I didn't want them laughing at me! Maybe not the best motivation but whatever, it worked for me.
"There were two things that happened that for me were like a big light in my head. One was when I accidentally sold an apartment rather than renting it. I was just planning to rent the apartment when the young engineer said that he wanted to buy, that's what got me in the sales business. It wasn't a big plan. It should have been, but it wasn't. That was like 'Whoa!' You make a lot more money selling something than renting it and I'd still be renting apartments. The other wonderful thing that happened was one year I actually had $80,000 in profits. Probably had maybe 500 salespeople and I thought to myself, 'I've got enough money to buy my mother and my father a new car.' So, I bought him a Lincoln Continental -- hey, what the heck, my dad dreampt about it his whole life -- and I replaced my mother's old rickety, old blue whatever-the-heck-it-was. And so, the idea that you could buy each of your parents a new car in one week and have it delivered was mindboggling, and I ended up going, 'Whoa, maybe my business is actually a business.' That was the first really big wake up call.
"Our company, The Corcoran Group, was always smaller than the public thought we were, and the reason for that is we had a big mouth in the media business. If I wanted to become something more than what I was, I would publish a report on it. That's how I met the terrible Donald Trump. I published a 'Top 10 Condo' survey where he ranked No. 8 and 9 when he was telling the whole world he ranked No. 1. That's how I got called into Mr. Trump's office and made him my best friend intentionally. When I wanted to do celebrities sales, we had no celebrities, so I put out a 'Madonna Report' in the daily paper. And would you believe I was interviewed on three television networks that week? Not because I was Madonna's broker, but because I had the big mouth and I was talking about it. I never got her as a client -- I wish that was the ending -- but I did get Richard Gere as a client that week because he saw me in the news as a celebrity broker, which I wasn't. So we were always looking so much bigger than we actually were, simply because I learned the power of putting out a statistical report and sending it out to the press. It built our brand, and for that reason alone, we sold our business for a heck of a lot of money.
"The day I decided to sell the company, we had a little bit more than 1,000 brokers and we had $5 billion in sales. That's a lot of business. I don't even think I would have thought about selling the company if my archrival in the business hadn't called me the week before suggesting we merge our firms. This was a company that I competed with my whole life, it was a giant and now the giant was asking to merge firms. That was the day I realized, 'My God, I could probably get a lot of money if I cash out.' And that's exactly what I did.
"I was extremely clear when I decided to sell the company, because I had waited until I was 46 to have my first child. He was already four years old and I found myself wanting to be a super mom and a super leader at my business, and frankly, I was doing each at about 80 percent. Which is still better, since they add up to more than 100 percent, but not good enough. That's what made me sell the company. As most women will wrestle with at some point in their life when they have children late, it was hard to do both.
"Once I sold The Corcoran Group, I was shocked and dismayed at what life became for me. What I learned is that I missed the power of the position, I missed tremendously the camaraderie, I missed tremendously not having a giant blackboard to be creative against -- to have an idea on a Monday and see it executed by Wednesday. All those things, I never realized how important they were to me, and it took certainly a good three years to adjust and start aiming my guns at a new target, because I realized in short order I was no good without a team. I love building businesses.
"I think entrepreneurs have to be born with the talent to work with people. A lot of people that want to be entrepreneurs, but they don't have the people talents, and I think the part that's made is your background, how hungry you are to succeed. I knew in school -- I was dyslexic and the dunce of the school -- I had something to prove, I wanted to get out in the world, get out of that old jailhouse I was in everyday and prove to the world that I wasn't stupid. I had tremendous motivation to build a company and to do whatever I wanted rather than by somebody else's rules. But I think the motivation has to be there because it takes a heck of a lot of energy and time to jump over the hurdles that get between you and having a successful business.
"I've written four books since I've sold The Corcoran Group and I can't say that that's my sweet spot. I write well because I work at it, but that was a means to and end. What I was really trying to do -- and I think I've accomplished now, thank God, successfully -- was build my Barbara Corcoran brand independent of The Corcoran Group. So now I'm the real estate expert on the Today show, I think people know my name, when you hear real estate. In fact, all that people ever say to me is 'Oh, your the real-estate lady,' and I say, 'I actually have a name,' but they call me the real-estate lady. More recently, which I'm totally enjoying, is being a shark on ABC's Shark Tank. I love that because, in a way, I'm now hiring salespeople again. I'm hiring the heads of many entrepreneur companies to be my partner, and in doing so, I'm back to picking out great salespeople and entrepreneurs and developing their businesses all over again, their individual brands. I'm doing a lot more of what I really, really love to do, and that's been a real blast. The failures and the winnings!
"Ask any entrepreneur. It's great arriving where you want to arrive cause you can say, 'Hey, I did it.' It's great cashing out because you get a ton of money. But talk to any entrepreneur, once they have a beer or a whiskey in them, and they'll tell you the best days of their lives was when they were staring the company. There is something about that baby stage, just like raising kids. That's where all the charm in life is. It's never the getting there -- it's the process of getting there."
Comments (Page 1 of 5)
BALONEY! What ti really takes? LISTINGS! Once you get the Listing? your guaranteed getting 50% of the Commission if someone else sells it..
> Since 08'? it's been a Listing Market.. No more FOSBO's..
> Prior to 08'? Yuo could stick a 4 Sale sign out on the Lawn or in the Paper and you could sell it yourself at Top Dollar..
> And I wonder? How many Deals did she and her firm do with really Honest Loans.. Buyers that didn't Lie on how much they made to get the Loan? How many Deals made with 110% financing or to UnQualified Buyers?
> How many Sales did she make in btwn 03'-06' that Have gone into Forecloseur?
Of course, she will cop out and say it's not their Fault..
I'd say at least 25% of the RE Agents should have had their Licenses Pulled and alot of them charged with Fraud, just like the Mortgage Brokers..
They are no Better than Used /New Car Sales people.. They sold over 33% of their cars to Unqualified Buyers too..
I buy almost everything except food and clothing from online auctions.
Most people aren't aware of the almost unbelievable deals that they
can get from online auction sites.
The site that has the best deals is ( tinyurl.com/BiggestDeals )
and I checked with the Better Business Bureau and was told that it is
all legit. How they can sell gift cards, laptops, cameras, and all
kinds of goodies that we all want for 50-90% off, I don't know. I do
know that I bought my son an iPad there for less than $100 and my
husband a $250 Loews gift cards for $48.
Why would I even think about shopping anyplace else?
I love Barbara! She has a lot of class. The website Best Top Jobs has a FREE list of work at home jobs offered by real employers. I save on gas, lunches, clothing and day care by working as an employee at my home. Good luck!
There is a misconception on the part of many people about internet based home businesses. People either think they are all scams or that they require superior computer and marketing skills. I used to think the same thing. The truth is that well over a million people are making a full time living that way. I kept trying and failing to find the right work at home opportunity because I knew that there were so many advantages to them. Finally, after years of getting ripped off and failure I found the right one at this site ( bit.LY/HomeBizSuccess ). I can't wait to wake up every morning to work. No more commutes for me.
This business probably is not worth a plug nickle now. She is just someone who walked in at the right time and jumped ship at the right time. No real skill here. But a business that is succeeding right now, SaveCreatively they have a cool story too under their about us page.
Dude she sold the company in 2001 and missed the whole bubble. You read before you write but your points have merit...just not to this person.
There is not auction at www.tinyurl.com want to repost the exact url?
My desire for financial independence has led me to countless seminars, programs, books, etc. I wouldn't say that I failed when I applied that knowledge because, although I didn't make much money then, I learned that it wasn't the 'awakening the giant within me' that was going to make me rich, but a simple blueprint to success. Specific directions and guidelines from people that have been there and done that, and that would be gracious enough to show me and guide me through that journey. Having said all this, I'm very happy to inform you that thanks to website: ( tinyurl.com/OnlineBizSystem ) its priceless information and guidance, I've been able to already assure myself a pretty nice monthly income passively......
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Samatha, why do use this article on the Corcoran group to advertise a online auction site? So Annoying!
Hey Joe D, she sold her Real estate business in 2001, before the Banks did most of their foolish lending, when they would give any one with a pulse a mortgage.
More Real Estate agents got caught in the mortgage trap, than the average investor, or the average buyer. I am and have been, a FSBO seller, you do not have to be a Rocket Scientist to sell a home and anyone selling, can put their home on the MLS and share a little of the proceeds. The Real estate LADY/ Barbara is right on the money in EVERYTHING she shared with us in this article.
In her days as an Agent/Broker, she was a people person, who treated her clients very fairly, no underhanded tricks and she had great success. Her motivation to succeed was beautiful, "I WILL SHOW THEM", it was more about making a big statement for herself on her part, rather than the usual GREED factor that drives most people.
I wish more of the real estate Agents and Brokers, especially here in SW FL, between 2003 and 2006, had just a sprinkle of Barbara's scruples and character. Instead of doing their Jobs "Selling Homes" and making great commissions, in a RED HOT market, they got greedy and ambushed and destroyed a housing boom here, which was inevitable, with the anticipated Baby Boomer retirement Gold Rush to FL. They also destroyed their Credit and their very own long term security and livelihoods. They also destroyed many family's, who could not handle the stress in having their homes values plunge, leaving them with zero equity and most owing more on their homes than they are worth, like feeding a dead horse. Florida could have been the hottest real eastate market in the country, as well as a flourishing buisness location, which would have created Thousands of new jobs and they would still be building homes to keep up with a huge demand.
These particular Realtors and Brokers were buying Gulf Access homes, with little to no money down, thanks to the Banks, which they could not afford and planned to flip before the first mortgage payment was do and for about 2 years many were successful.
Then, to many of them were trying to do the same thing and they got caught holding to many homes, some realtors were flipping their homes on their way out, to other realtors, who got on the gravy train to late.
There were more realtors and brokers buying homes, than the eager to buy retirees. When the realtors had to start making mortgage payments, they could not afford to do so. To get out of the mess they were now in, they had to reduce their prices quick and drastically.
This problem they created, took only a few months before the potential Baby Boomer buyers to figure out. They were seeing home prices dropping like rocks and by the end of 2007, homes that were selling for $650,000 in 2006, were now priced at $450,000 and they all put their buying brakes on and ran for the hills, with their cash in hand, those who got lucky anyway.
There should have been a criminal investigation, instead they created new rules. The 90 day rule for flipping a home was one new rule created, a person that buys a home, must hold onto the home for at least 90 days before they can flip the home, unless its a cash buyer?
Today, the Banks, who now own all of these foreclosed homes, will not look at an offers on a foreclosure, unless it is a Cash offer and they do not look at offers that are put in by FHA, or conventional loan offers, even if the offers are much higher than the Cash offers.
This is allowing the Banks to hold on to the Bailout Money we gave them and keeping the housing market from making a much quicker recovery and it is catering to only those who have CASH, the wealthy of course.
Thanks to those greedy people and the Banks who fueled their underhanded ways, the entire country suffered, as Florida was the first State to crash, with a huge chain reaction, which is still working its way around the Country. We have not even began to see the damage in the real estate market to come. Jobs will continue to dry up, with a vengeance and the same plummeting housing market we had in Florida, will soon be coming to housing market near you, very soon!
JoeD:
I'm afraid that Barbara's entertaining and instructional article was way over your head. Barbara was merely providing a qualification test to allow the reader to determine if he or she possesses the skills necessary to succeed in the business world. The article was meant to entertain. It was meant to provide instruction, and it encouraged the reader to consider his or her skills with those necessary to succeed. What Barbara's article was not, is historical. Whether or not she actually applied all of the characteristics and theories she offers has no meaning at all. I, too, am a successful consultant in my business field, working from my beautiful little home office, and I can tell you that I needed every one of the traits that Barbara described. Given all of the components of success from writers like Barbara, she makes it very easy to predict whether you will fail or succeed, well before you devote a fortune to a venture that had no chance, because you had no chance. Re-read Barbara's article, this time as a measuring device against your own skills, characteristics, traits, work ethics, etc. If you still fail to see the value in Barbara's article, get a job and keep it. You were not meant to be a work-at-home, highly successful member of your chosen field of employment. Barbara's article was excellent. Your reply needs work. PM WLV CA
Geez, the woman worked hard. Give her her credit due. Jealous a little bit? If she had so many advantages, why didn't you make use of all those advantages too and build a billion dollar company?
Right ON! The banks and brokers made a killing selling houses to unqualified buyers up to 2006. My house is worth less than 50% of what it was worth in 2006. They say the housing crash is worse than it was during the Great Depression of the 1930's. The country is going to hell: high debt cealing, gas going to $5.00 a gallon, and high unemployment. Friends, we are in the middle of a Great Depression. Obama and the Government lies. I have not gotten a cost of living raise on my social security in 2 years, and they say prices have not gone up? What Bull! The people need to take back this country to restore it to what it was in 2004....Clinton had a balanced budget then.
I love this lady. I think she has the "cohuuns" for what it takes to really make it out there...Good for her..I have been unemployed for almost 2 years now and getting ready to loose my house. I don't even own it I am just renting..yuck..As of tomorrow. I just wish I had had someone like that in my life to guide me better because whatever it is I have done DID NOT work out for me. Moving from the south after Katrina and moving up here has just ripped me of all my finances, strength, self esteem is shot. I was always the life of the party. I was the one that everyone came to for information to help out in their life. I should have lived by my own words. But who would have ever known, I sure as hell didn't... blow a little luck my way,Barbara....:-)
WHY ARE YOU SUCH A DOWNER JOE?
I LOVE Barbara. I think she is one of the most approachable people on TV. I'm sure the reason she has been such a success is because she brings that warm personality to everything she does. Fame and fortune is well deserved.
k
Sold it for a Heck of Alot of Money? Yeah, wanna Bet it was during the EASY $ days to get Loans..
Bet Now? That Business is worth 25% of what it once was..
We sold our Business in 2006, for Price we couldn't refuse.. 2 X as Much as we figured it was worth... And they Financed 110% of it! Now? They went Bust and Broke..
But we got our $ out of it..And the Buyers? They didn't do too bad either,, they paid themselves 1st and stuck the Banks with the Loans..
If someone comes upto you and offers Twice as Much for your Home, would you sell it?
In a Heart Beat.. and that is what happened in the Real Estate Boom thru 2006...
I've wondered the same thing. Just looked it up and found the following, "kilo- (symbol: k) is a prefix in the SI and other systems of units denoting 103 or 1000. For example:
one kilogram is 1000 grams
one kilometre is 1000 metres
one kilowatt is 1000 watts
one kilojoule is 1000 joules
Officially adopted in 1795 (though in common use before that), it comes from the Greek χίλιοι ("khilioi"), meaning thousand."
"It's K because in international trading, K is used. Obviously, the U.S. is only one nation and everybody elses uses it. To avoid confusion, it would be easier to use K rather than G for grand or anyother name for thousand."