This interview is with Patrick Nelson, CEO & Principal at Icon 1031, LLC and Icon America Fund, LLC.

Patrick Nelson, CEO & Principal, Icon 1031, LLC and Icon America Fund, LLC

Can you tell us about your background and how you became an expert in areas like real estate investing, digital marketing, and sales?

Yes, I am CEO of Icon 1031. We have managed more than $1.5 billion in student housing properties across the country. Digital marketing is the main way to attract students to your property and is absolutely critical to success. You have to be an expert because college students are arguably the most tech-savvy and have high expectations. In 2017, we won the best social media campaign from Student Housing Inc. with a viral video that received over 1 million views.

What inspired you to pursue such a diverse range of business interests, from 1031 exchanges to startups? How do these different areas complement each other in your career?

We took a 100-year-old opportunity of 1031 exchanges and offered them into professionally managed student housing, which was a relatively new concept that no one was doing.

You’ve had success in real estate transactions, particularly in selling your home in Aliso Viejo. Can you share another unconventional strategy you’ve used in real estate that others might not think of?

Yes, we have many. The key is arbitrage, which is finding opportunities in an inefficient market such as real estate. The stock market is absurdly efficient. You pay the same price for Google stock on any exchange because of technology. Also, insider knowledge is illegal. In real estate, you have all sorts of owners and buyers with different needs and values and an extreme difference in knowledge. This inefficiency called arbitrage is a huge way to make money. Also, there are no insider trading laws in real estate! If you know they are going to announce coming out next door that would either hurt or help your property, you can trade on it! One may love your property because his or her mother lives next door! When selling, find the uniqueness in your property that the market is not valuing appropriately and find the right buyer!

In your experience with 1031 exchanges, what’s one common mistake you’ve seen investors make, and how can they avoid it?

They wait to look for a new property until after they have closed on the property they are selling. They only have 45 days to identify the new property. This can make you a desperate buyer, where you end up overpaying.

You’ve mentioned the importance of having a realtor who’s an expert in a specific area or niche. Can you share a personal experience where this expertise made a significant difference in a transaction?

Yes, if you own a property with a view of the mountains, golf course, ocean, etc., how do you accurately determine the value of your view specifically? If you don’t know the local values inside and out, you will likely lose money when buying or selling to someone using an agent who is an expert in the area or niche your property is in. If I’m selling in a high-end neighborhood, I would use an agent that has the best track record of the highest sales or brings the most new buyers in that neighborhood specifically, rather than the one who has the most sales or someone who only dabbles in that neighborhood.

Digital marketing is constantly evolving. What’s a recent trend or strategy you’ve successfully implemented in your business that other entrepreneurs might benefit from?

Make sure that the most compelling benefits, not features, are visible or understandable in the first 5-10 seconds. If you’re selling a product and it’s the lowest cost in your industry, make sure the price is front and center. If leasing your rental home, and its best benefit is the view or proximity to shopping, make sure potential renters know that immediately vs. telling them it’s 3 bedroom and 2 bath first.

Negotiation seems to be a key skill in your toolkit. Besides the ‘waiting’ tactic you’ve mentioned before, what’s another negotiation strategy you’ve found particularly effective in high-stakes business situations?

If possible, try to make sure you come across as the lesser interested party. Let them know you’re interested, but that there are other options. You don’t need to do this deal (even if you’re desperate to get it done or make the sale). Finally, negotiate like you’re desperate. If you only have $5,000 to buy a car, that’s literally all you have; you’re not going above that. Maybe you get the $6,000 car for $5,000. If you have $7,500, you likely will pay the full $6,000 because you can. Be the $5,000 person no matter how much you have.

In the world of startups, what’s the most valuable lesson you’ve learned from either a success or a failure that could benefit aspiring entrepreneurs?

You have to make ten great decisions for every one wrong decision you make. However, some decisions, like the last of your current cash, could be fatal, so be wise.

You’ve recommended a pebble ice maker as a must-have item for homeowners. In the context of real estate investing or home improvements, what’s another unconventional yet valuable addition you’ve found can significantly increase a property’s appeal or value?

Open space in the main rooms vs. separate rooms such as a living room, a dining room, and kitchen.