Lessons From Building A Commercial Real Estate Insurance Business With Jeremy Goodrich

 

Finding stability for your business is crucial to staying afloat. Today’s guest has somehow managed to do just that in the risky world of commercial real estate and has even helped others be on the same boat. Jeremy Goodrich was a former teacher who transitioned into business and is now the owner of Shine Insurance. As an educator, he makes commercial real estate insurance easy and simple for his clients. In this episode, he shares invaluable lessons and insights with host Lisa Hylton that just might be what you need.

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Lessons From Building A Commercial Real Estate Insurance Business With Jeremy Goodrich

I’m super excited to have on the show, Jeremy Goodrich. Jeremy is the host of the most-watched insurance agency channel on YouTube. He has answered hundreds of real estate insurance questions in a way that makes sense, which is very refreshing and is interesting. He is a commercial real estate insurance broker. Welcome to the show, Jeremy.

Lisa, I’m so excited to be here and talk about real estate investing, entrepreneurship, insurance and share some insights on all of that with your readers.

The readers know how the show is broken down into three parts. We have the background, the meat of the show, and then we wrap up with level-up questions. To jump into things, what part of the US do you and your family live in?

 

We are smack dab in the middle of the Midwest. I live about an hour South of Indianapolis in the Rolling Hills of Bloomington, Indiana. Most of the Midwest is flat but then the mountains of Tennessee and all those areas there are right South of us. We get a little bit of the hills right where we are at so it’s beautiful here. There’s some national forest right around us and I just love living here.

What do you and your family love to do for fun?

It’s mostly hanging out in those forests. We would like to go hiking. We love to go kayaking. We put a cool rack on top of the car and this bike rack on the back of our car. We are that family that’s cruising around with stuff all over their car and you wonder what’s going to fall off first. Nothing is fallen off yet so that’s good but we are about to go to Michigan that’s North with all that stuff, 4 bikes, 2 kayaks, 2 dogs, a kid, myself and my wife are going to see what happens with all that stuff.

Let’s get started on the show. There’s so much to cover on this episode and I’m excited about it. Where I want to start is with insurance. Can you share with my readers a little bit about what you do specifically as a commercial real estate insurance broker?

Commercial real estate insurance is all I do. I have focused on this space. I love real estate investors. When I started my agency years ago, I have connected with real estate already. I was interested in it. I started working with first-time home buyers and teaching them how insurance works but they asked me questions about, “How to find a good realtor and a good lender, what is an escrow period and what happens at the closing?” I didn’t know the answers. I went out and asked realtors, lenders, title folks, and everyone in between the answers to the questions. I did that on camera and audio, recorded it and posted it to YouTube. That was the beginning of my journey, aligning real estate, insurance and answering questions for folks.

It started with first-time home buyers, then we talked about residential investors with flips for single-family homes. Now I talk on the channel about commercial real estate and it’s always connected with the insurance side and the risk management but at the same time, I see deals all the time. I see deals come across my desk that is 100, 150 and 250 doors because I’m the insurance agent. I’m a service provider who brings it to those folks. I have insights into how the insurance works, which is what we are going to dig into here but how it works as a whole as well. To answer your question specifically, I am a property and casualty insurance agent. I insure apartment complexes, offices, retail and industrial.

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Can you talk about the key differences between residential insurance and commercial insurance?

If you know any differences when it comes to lending, there are a lot of similarities. In lending, a residential loan is a little bit easier to get, while a commercial loan is a little more flexible, it’s the Wild West. You can do a lot of things on the commercial side that maybe you can’t do on the residential side and there are some pros and cons to both sides. Commercial insurance is very similar. When you see the commercials during the Super Bowl for all these companies, most of them are focusing on home and auto insurance. It’s very specific. It’s like you put things in, you either get the discount or you don’t and a number pops out on the backend.

Commercial insurance has some similarities. We are still putting in a lot of information but ultimately, I am pitching properties to insurance companies. I’m saying, “Here are the pros of this property. It was built in the 1970s. I know that you are going to think that’s problematic but here’s what they have done in the last three years to update the wiring, roof and interiors. I think that you should consider this property and insure it at a great price.” It’s like in commercial lending. We are telling a story to insurance companies in a lot broader way than it is on the residential side. That’s probably the biggest difference. It’s the freedom that insurance companies have in their pricing or their choice, whether or not to insure a property.

That brings me to my next question, which is it sounds like there are some properties that you have run across that are uninsurable.

I don’t think anything is uninsurable.

Is it that the premium will be really high?

Here’s how I like to frame it. If you think about insurance companies in three tiers, tier 1, tier 2, and tier 3, tier 1 companies have the best pricing for quality coverage. They have good claims experiences. They all around are good insurance companies. Tier two, you start to lose some coverage and the price starts to go up. Why would you ever want to go there? It’s because tier one companies say no a lot. Tier one companies are looking at things a lot more specifically. They want certain things. If they all are saying no, then you’ve got to go to a tier two company. There’s tier three where the coverage tends to go down and the price tends to go up even more than tier two.

I insured property in Louisiana, right outside of New Orleans. This was a heavy lift, 40% of a 120-unit complex was vacant at 60% occupancy and hadn’t been updated. It was a 1970s build. We’ve still got aluminum wiring and some Stab-Lok breakers, which are all things that are red flags for insurance companies. It’s right on the Coast so it’s Coastal as well. Almost every red flag that you could think of is present in this property. If anything is uninsurable, I would say this property is uninsurable. What I did and knew that was the case so I needed to have a story. I was like, “I’m not even going to go to tier one companies. They are going to laugh at me.”

Tier two companies, I might try a couple of those but they are probably going to say no as well, and they did. I had to go to tier three insurance companies and then pitch a story. “This property has all these negatives but this investor is going to update it in the first four months. We are going to have those aluminum wiring gone and breakers dealt with. They are going to turn over all those properties that are empty. In fact, they are empty for a reason. The seller knows that it needs to be renovated and so as leases come up, they are leaving it vacant so the buyer has the opportunity to renovate it.”

Now the insurance company is hearing a story, while those tier-one companies are still going to say no and most of those tier two companies are still going to say no, the tier three companies are out there saying, “Someone has to insure this and it sounds like good things are going to happen on this property. Do I trust Jeremy and the story he’s telling me enough to choose to insure this property?” That was a long answer.

 

Have there been any situations where maybe the judgment was off?

Every time someone says no, I think the judgment is off. I wouldn’t be pitching something that I didn’t believe in or believe in the investor. Insurance companies are trying to fit square pegs into square holes, and as commercial real estate investors, we are trying to find opportunities and make them better or whatever it is. Part of my job is to articulate to an investor where that judgment is coming from, what it is, whether I like it or not, and how we can work around it. I wouldn’t say work the system because I’m a part of the system but work it to make it work the best for that investor.

I also think it’s probably key that they engage with insurance brokers like yourself and the underwriting of these properties to make sure that they are comfortable with the premiums and everything because the last thing they would want to do is estimates something lower than what they are going to get.

A lot of new investors don’t make this mistake. It’s sometimes older investors but it’s thinking you can do insurance like you do your home and auto insurance or something like you can fly by the seat of your pants and get the cheapest price. It doesn’t matter. I’m going to go out there and get a cheap policy. The other thing about commercial insurance is there are a lot of worthless policies, that have clauses in them that you get into a claim situation and suddenly you are realizing you didn’t have anything close to what you thought you had. My biggest piece of advice is to find a good insurance broker and a good person who doesn’t work for an insurance company but goes out and finds insurance companies. Tell them the story of your property and tell it early. You don’t need to hide things because it’s going to be found out at some point anyway. It’s like so many things. You hide it. It’s worse when you find it than when you did in the first place.

The relationships I have that work the best are folks who understand that they need to talk with their insurance agent early in the process, especially if it has some of that significant stuff like the 1970s build. Definitely talk to your insurance agent early, before you even submit an LOI may be, certainly the due diligence so that you understand what that number is. That seller shows you their policy and it’s $350 a door but they’ve got 10,000 or 15,000 doors and they put that policy in place years ago. The entire structure of it all has changed and no one is saying yes that used to and suddenly, you’ve got $700 a door. That’s a pretty extreme example but you’ve got a different scenario than you thought you had and you are two weeks before closing, then there’s not much you can do.

From here, I would like to pivot a little bit but before I pivot, is there anything else on the insurance side that you would like to share that we didn’t cover?

No. We could get in the nerdy weeds all day long but the bottom line is like every other team member that you have, that you are working with as a real estate investor, your insurance agent is like your accountant, lawyer and property manager in the way you see, hire and treat them.

Moving forward a little bit here, before this call, we chatted a bit that you were a teacher before coming into the insurance field. Can you talk about the transition from teacher to entrepreneur?

It was huge. I was a 3rd and 4th-grade teacher. People drop their kids off all day. Sometimes I spent more time with their kids than they did. There was this trust relationship and I remember appreciating that and realizing that was there, and taking that seriously how much parents trusted me to teach their kids, help their kids grow, and help them learn and love so many things in life. I became an insurance agent and nobody cares. Suddenly, you are not and it swung an entirely different way. I didn’t necessarily realize that was going to happen or that I was going to experience that, although maybe I should have. What I decided to do was become an educator. That’s what I have tried to do for the years that I have been doing this.

One of the things that this brings up is the interplay, that gap between early entrepreneurship, what you envision it to be and what is the reality. Can you talk about some of the shifts, the interplay of that, and how people can mind that gap and close the gap, essentially, if anything?

The quicker you can build your systems, understand your strategies, and get those SOPs down on paper, the quicker you can transition. Share on X

I have had this business for years and we started it with nothing. We saved a little bit of money before we quit our jobs because we knew that it was going to be rough at first, and then our gross receipts are about $1 million a year so we have grown it into almost $1 million a year business over a few years, which is slow growth. Lots of people go faster than that. We have kept it safe, slow and focused on service. The biggest piece of advice I have gone through that is that the quicker you can build your systems, understand your strategies, your why and you can get those SOP or standard operating procedures down on paper, in Trello or whatever, the quicker you are going to be able to transition from you working 40, 50, 60, 80 hours a week to grow your business. This has to happen at the beginning if you are going to make it happen to other people fulfilling your vision alongside you.

I certainly haven’t left the center of my business, nor do I have any interest in doing so but I do have other people doing large parts of the process so that I can do things like go on this show, and then get off this call and speak with a client or a potential client who has a thousand doors. That’s a big call that I have and my team is working on all the things that we are going to do to be prepared for that call to serve that person in that way. Throughout the last few years and it took me a long time to figure this out, what I have done is build the systems by which this work can be done. We have a VA team that helps us of 4 or 5 folks and that’s a big part of the success we have because I can have some of the rote things that have to happen done by not my central team or central staff. We can focus on the things that take our knowledge of the industry and what we are doing.

I introduced you to having a most-watched insurance agency channel on YouTube. Can you talk about the strategy? Talk about your decision to do that. A lot of people are scared of video and you have a most-watched YouTube channel. Can you talk about that part?

One of the things I did was screen record with a microphone. My videos, if you watch them, they do have my face on them now but for a long time and some of my biggest videos don’t have my face on them. It is my screen recording of what was a PowerPoint presentation and talking. You don’t have to have your face on a video for it to work. If that’s a concern you have, consider that option. That worked a lot better in 2015 or 2014 than it does now. That was the way that I’ve got around that because I also had problems like, “How do I get the video and the audio to work, and a thing to happen?” It would be so much time spent that I found this way to screen record PowerPoint and talk over them. That worked for me.

Building onto that, entrepreneurship mindset so talking about further building a business and the mindset around that has helped you to build or that you have seen has helped other people in building their businesses.

There are so many things but I will focus on one, which is the willingness to do the work. The idea that you are going to drop out and make $1 million in the first year, happens and I’m not saying it’s impossible. It’s risky. I’m not interested in risk. I’m interested in stability yet, I jumped out of the W-2 world and started my own business. That meant I had to trade my time and I did a lot of that. That’s one thing. It’s the willingness to trade your time for at least some period before you can get further. It’s like being in a boxing ring or some other sports metaphor where it’s the willingness to get back up. The fact that imposter syndrome is real because, at first, you are an imposter. It’s like, “How do you deal with that?”

If you don’t have years of expertise in the thing you are doing then one, let’s find some people to work with that do. If you can partner in real estate is a great example, you can build a GP team where you are working with someone who’s further along in the journey than you. A lot of entrepreneurial journeys don’t have that ability but certainly, in real estate, you do. You can go find a bunch of people and people are willing to bring you in if you bring something to the table. One way to get rid of that feeling of being an imposter is finding other people to team with and connect yourself with.

The other is to study hard. Before that big meeting, you better make sure you know what you are talking about, not because you have years of experience but because you studied that person’s scenario, and then listening especially in real estate. If you found a deal and you are meeting with somebody, that’s a big opportunity, especially early in your journey. Often you are figuring out what you have to offer and, we hear this from tons of experts, listen to what someone else needs.

If you are trying to sell something and that it has value or you are trying to bring value to someone else in general, that could be a lot of different things. How are you listening to what they need and making sure that the value you are providing is aligned with the need they have? That’s easy to say and many people do say it but it’s so much harder to do because when we are uncomfortable and feel like an imposter, we want to talk, we want to say words, and sometimes that’s not the right approach. Sometimes you want to wait to say words until you know what words to say.

I ran across a clip someone else had on social media and they were talking about if you think about your goals, they are the outer circle in terms of where you are trying to go, and then inner are the things that you need to show up and do to get to those goals. Further in from that is who you think you are, your identity, and until you change your identity of how you see yourself and that is largely in the imposter syndrome. People have a lot of trouble getting from seeing themselves as that real estate syndicator, entrepreneur or business owner that is going to be able to achieve the goals that they have written down for themselves. It’s so powerful.

Two quick thoughts on that topic. It’s so important to know what your goals are and then create those waypoints to it, to know what you want for your life five years from now, what that looks like, and then say, “What does 3 years, 2 years, 1 year, 6 months or next week look like?” The better job you do of balancing those things, the more success you are going to have. Who you think you are is so important. Lots of people are talking about this. Donald Miller with the StoryBrand thing is maybe the most famous now, which is how do you position yourself as the guide? How do you say it’s very easy to want to position yourself as the hero in this story, journey and value that you are bringing to someone else? “I’m bringing value. Look at me. I’m the hero.” The reality is if you can shift that to the person being the hero and you being the guide, I like that metaphor. For whatever reason, that works well in my mind, maybe because I’m a school teacher and I still have that at heart. I felt like that’s exactly what I was as a teacher. I was the guide and the kids were the heroes and so I can bring that into my entrepreneurial journey.

 

Last but not least, you mentioned that your wife was in the insurance business before you and you were a teacher at the time, and then you moved into the business. Are both of you still in the business together?

She’s the CEO so she runs the business. I’m the real estate investor guy. We have two verticals at Shine Insurance. We have home and auto insurance in our local area, mostly in Indiana, and then we have real estate investors across the United States. My role is to do this program and that’s all I do. She still runs the business. She’s the smart one and makes all this stuff happen.

Any advice you would give to other entrepreneurs out there who have partners and who are going into business with their partners?

That piece of advice is specific to the partnership. Me and my wife McKenzie, don’t do projects together very well. We have known that the whole time. It doesn’t work. We could make it work but we don’t want to. We don’t want that stress or tension. We have split roles clearly. We talk on an annual, certainly on a monthly and even a weekly basis about what our roles are, what we are doing and we make sure that those projects are not overlapping each other. She’s set very clear boundaries. I could talk about insurance and real estate all day long, every day. I could wake up at 3:00 in the morning and talk about the thing I’m thinking about. That is who I am.

She is very much like I want a work-life balance. I do not want to talk about insurance all the time. That’s not where I’m at. We have had to work through that. We’ve got times and I have done a 90% successful job of following those rules. Sometimes something is boiling inside of me that we’ve got to talk about. That’s my advice. It depends on the two people. The first thing is back to listening. Who is your partner and what are their needs? How can we make sure that that happens for both as best we can? It’s never going to be perfect with a partnership but the value of a partnership is you have 2, 3 or 4 minds depending on what your partnership is. Figuring all that out makes a lot of sense.

Before we get into my level-up questions, anything else that came to mind that you would like to share with my readers?

The last thing about marketing. Authentic content that’s known at this point but I have been trying to do that for years. If you don’t know what to do for marketing, figure out how to put authentic content out there for your ideal client and identify who your ideal client is. You think about the people that you are working with now. Who is someone you love working with and what are the characteristics of that person? How can you attract more of those people and push away those folks that take up 80% of your time or the 80-20 Rule or whatever?

This then brings me to the level-up questions that I ask all my guests. The first one is, what are you grateful for in your life right now?

I’m grateful for stability. It’s maybe the biggest one. I have referred to it a couple of times in this conversation but I’m not a huge risk-taker. I like stability and over the years, knock on wood, I have created something that feels stable and fun to do. I’m obviously grateful to be a part of a great family, have a roof over my head and the things I’m able to do. That’s all stability, which is what I’m grateful for.

That’s beautiful because entrepreneurship typically doesn’t have a ton of stability in it.

I see people out there that are blowing up, doing amazing things, making a lot of money and helping a lot of people at a higher scale than I am. I say that risk, that earthquake of life, you hear so many real estate investors that made $7 million and then lost $7 million. I’m like, “No, thanks.”

What has attributed to your success and continuous growth?

I think not leaving who you are as a human being. I’m a teacher. That’s what I have been. That can be interpreted in lots of ways but that is who I continue to be and while I can refine that, I can do a better job of it. I can align it with sales. I had to learn how to ask for a sale. You have the best value and best thing. Ask the person if they will come along on the ride with you. I always felt like, “No. If they like, they will take it. I don’t want to ask.” That’s one thing I have learned. You have to be yourself and then keep refining that.

What do you now know that you wish you knew at the beginning of your journey?

Make sure that the value you're providing is aligned with the need they have. Share on X

That there is no end to the journey. I remember distinctly sitting in my room as a college student, a senior in college, and at that time, I was going to be an Art teacher and that’s what I became. I was thinking to myself, I was 21 or something like that, “When I’m 25, I will have it all figured out.” I will have a little bit more money. All these things that are spinning in my head are questions about life and people, and how it all works and those will all be solved like, “I can’t wait until I’m 25.” I’m 45 and the same things are still present. The reality is that we don’t solve them and that’s okay. Life is a journey and we can be on that road and travel through it. That’s the advice I would give myself. It’s like, “Go on the journey.”

It’s a perfect way to end the show. If my readers want to learn more about you, what’s the best place they can go to learn more?

The YouTube channel is Shine Insurance. You can check it out. The podcast is REIClarity.com and the insurance agency is ShineInsurance.com.

Thank you so much for coming to the show. I appreciate it.

Lisa, it was my pleasure. Thank you for having me on.

You are welcome.

Important Links:

• YouTube – Shine Insurance
• Shine Insurance
• REIClarity.com
• StoryBrand

About Jeremy Goodrich

Jeremy is the owner of Shine Insurance and specializes in making commercial real estate insurance smart & simple.As the host of the most-watched insurance agency channel on Youtube, Jeremy has answered hundreds of real estate insurance questions in a way that actually makes sense and is interesting. His appearance on your show will include stories, simple descriptions, and invaluable insights.

 

 

 

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