{"id":133918,"date":"2021-02-17T13:30:37","date_gmt":"2021-02-17T20:30:37","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=133918"},"modified":"2024-01-27T11:26:29","modified_gmt":"2024-01-27T18:26:29","slug":"choosing-commercial-real-estate-agent","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/choosing-commercial-real-estate-agent","title":{"rendered":"How to Choose the Right Commercial Broker for Your Next Investment"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC1604817849\" width=\"100%\"><\/iframe>  \n\n\n\n<p>&#8220;I&#8217;d buy it. It would be a great investment.&#8221;<\/p>\n<p>How many times have you heard this phrase from an agent when inquiring about a property?<\/p>\n<p><span data-preserver-spaces=\"true\">How many times have you heard agents tout properties that no one in their right mind would buy unless they were looking to lose money? Like parents who think their kids are the smartest, it seems to be the default response from agents and brokers that the properties they represent are always the best investments you can make.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Look, I love real estate, but the reality is not all real estate is a good investment. There\u2019s a reason they\u2019re giving away properties in parts of Detroit. If all you have to do is promise to renovate them to receive title free and clear, why are so many of these properties still available? Because they\u2019re not great investments\u2014at least in the eyes of investors who know what they\u2019re doing.&nbsp; &nbsp;<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">At one point in my investment career, I started paying attention to those agents and brokers who had a habit of saying, &#8220;That&#8217;s a great investment,&#8221; vs. those agents and brokers who spoke a different language, the language of an investor\u2014my language. I started taking inventory of the tendencies, habits, and language of both groups of agents\/brokers. Here\u2019s what I found and what questions you should ask when searching and evaluating brokers\/agents to find someone that&#8217;s right for you.<\/span><\/p>\n<p><em><strong>Related: <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/commercial-real-estate-ultimate-guide-analyzing?itm_source=ibl&amp;itm_medium=related&amp;itm_campaign=opt\" target=\"_blank\">The Ultimate Guide to Analyzing Commercial Real Estate<\/a><\/em><\/p>\n<h2>1. Are you a seasoned investor?<\/h2>\n<p><span data-preserver-spaces=\"true\">House flipping doesn\u2019t cut it. Agents\/brokers who have invested in the commercial real estate class for the long term know exactly what\u2019s important to you and speak your language. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">There&#8217;s a stark contrast between agents who are experienced investors and agents who are not. If they have never put their names on the line, they don\u2019t understand all the potential risks or the potential rewards from a CRE investment. Agents who are inexperienced investors sound like salesmen and they\u2019re more concerned about the delivery of their message than the substance of it. They talk in generalities, saying things like, \u201cThis is a great investment.\u201d \u201cThis is a great part of town.\u201d \u201cYou\u2019ll never regret buying this property.\u201d&nbsp;&nbsp;<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The agent who is an experienced investor will be more detailed. They\u2019ll talk about acquisition and disposition cap rates, internal rates of return, CapEx, local job growth, local economic indicators, specific demographics about current and potential tenants, market rents, value-add opportunities, etc. They know what\u2019s important to you because they\u2019ve been there.&nbsp;&nbsp;<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Agents who have invested in CRE themselves approach their roles as agents more like a business and less like a job. They\u2019ll see their relationship with you as an investment because to them, CRE investors are ideal repeat customers. If an investor finds a gem through an agent who took good care of them on a past deal, they\u2019ll keep going back to that well and keep using that agent and even send referrals their way. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The investor agent thinks long-term, the salesman agent is only concerned about closing today\u2019s deal and has no problem burning bridges as long as they make their commission on this property.&nbsp;&nbsp;<\/span><\/p>\n<h2>2. Are you currently investing, and in what asset class?<\/h2>\n<p><span data-preserver-spaces=\"true\">Just because someone invested back in 2001 or 2008 doesn&#8217;t mean they understand the risks, rewards, opportunities, and trends prevalent in the current market.<\/span><\/p>\n<p>You&#8217;ll also want to look for an agent who invests in the same asset class. The knowledge and skills required for and obtained from investing in industrial properties don\u2019t necessarily translate to investments in multifamily. The tenant profiles, economics, marketing, and financials are very different between the two classes. That\u2019s why it\u2019s important to work with an agent who has experience in your target asset class.<\/p>\n<p><em><strong>Related: <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/commercial-real-estate-investing-pros-cons-types?itm_source=ibl&amp;itm_medium=related&amp;itm_campaign=opt\" target=\"_blank\">What\u2019s the Best Type of Commercial Real Estate Property for Investors?<\/a><\/em><\/p>\n<h2>3. How well do you know the area?<\/h2>\n<p><span data-preserver-spaces=\"true\">An investor agent is knowledgeable not only about the specific property you\u2019re interested in but also similar properties in the same neighborhood, surrounding communities, and even in the state and region. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">They know the job and immigration numbers. They know the short-term and long-term economic forecasts and all relevant underlying economic metrics and facts relevant to your potential investment. And they know how to communicate all this relevant data to you so you can make an informed decision. It\u2019s the same information they would rely on if they were investing for their own benefit.&nbsp;&nbsp;<\/span><\/p>\n<h2>4. How large is your network?<\/h2>\n<p><span data-preserver-spaces=\"true\">An investor agent will have valuable contacts that could potentially save you significant time and money. An agent that can recommend reputable contractors, property managers, accountants, lawyers, marketing experts, and cost segregation firms can be an invaluable resource.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">You may be hesitant to work with an agent who may also be your competition, but the truth is, they can be the best resource to work with in terms of avoiding bad deals, finding great opportunities, and reducing time and expenses. They can\u2019t buy every deal that comes across their desk, so it\u2019s possible to maintain a symbiotic professional relationship without getting in each other&#8217;s way. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In my personal experience, I often find myself passing along great deals to my clients if the timing isn\u2019t right for me. That\u2019s why you shouldn\u2019t pass up an opportunity to work with the right agent even if you have hesitations. The benefits far outweigh whatever potential pitfalls you perceive.&nbsp;<\/span><\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/store\/wealth-magazine-one-year\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-123232 size-full\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2.jpg\" alt=\"Blog ad for Wealth magazine\" width=\"700\" height=\"120\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2-300x51.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Not every commercial real estate broker knows how to help investors succeed. Here are four questions to ask any potential agent.<\/p>\n","protected":false},"author":408607,"featured_media":135437,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5527,7119],"tags":[],"class_list":["post-133918","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-real-estate-investing","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/133918","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/408607"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=133918"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/133918\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/135437"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=133918"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=133918"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=133918"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}