A broker just called me "Cryptic"! Am I Doing Something Wrong???

[Michael Ambrose]

A few years back, a few buddies and I converted a 20k+ SF warehouse into a coworking space that ended up doing very well.  Unfortunately, aside from the capital my partners equally contributed, I ended up with the burden of managing and growing the business by myself, and I left the company to start a new space on my own. 

A private RE investor recently reached out to me and asked if I'd be open to doing a management agreement on a property he was looking at, however we later decided that the property was not suitable for a the needs of a coworking space. Although that deal didn't work out, he's encouraged me to continue looking at other spaces on the market that might be a good fit. The problem however is, I know nothing about commercial real estate. I don't know how to effectively prospect properties, nor the questions I should be asking when contacting the listing agent. 

The other week I came across a property that's been sitting on the market for a while, that fit a lot of the criteria needed for a coworking space, so I wrote down a list of questions and gave the broker a call to get more information on the property. 20 seconds into the conversation, the broker called me "cryptic" after my first question and said he's not going to disclose any details about the property since I'm not being cogent. Here's a copy of things I wrote down to ask:

• What’s the backstory?

• How long has it been vacant?/How much is currently leased out?

• What’s the mix up of the current tenants?

- How many companies?

- When are the current leases set to expire?

• Copy of rent roll?

• Cap rate?

• Any information on the historical expenses on the property?

• Why’s the current owner selling?

• What’s the current activity?

Am I doing something wrong? Is there a better way in which I should be approaching these brokers, or handling these conversations? 

I'm very good at what I do, and am determined to do whatever necessary to make this new venture come to life, but I'm really struggling to learn the real estate world and work out the right relationships with people to negotiate a deal like this. 

Appreciate any help/advice you guys have to offer!

[Joel Owens]

"The problem however is, I know nothing about commercial real estate. I don't know how to effectively prospect properties, nor the questions I should be asking when contacting the listing agent."

So from your post it seems you are NOT the purchaser just a gopher type person doing research for this private RE investor.

As a commercial broker about 17 years in the business that sends up red flags all over the place.

You do not know the space by your post so asking tons and tons of questions without the broker validating the ability of the buyer upfront.

Everyone does business differently. How I might handle it is thank you for the call and ask that the actual potential purchaser submit financials showing the ability to buy and once received have a brief call with you and the buyer to go over basic questions. Anything more than that requires an LOI to be submitted.

If a broker spent endless hours answering questions from people wanting to learn the business but do not likely have the ability to buy they would never close any deals. 

It's amazing I get contacted sometimes on BP with people asking me questions their broker should know. I tell them your broker is being paid for a service you need to contact them. If your broker doesn't know then they should question their choice of a broker being selected to help them with a transaction.

TIME equals MONEY. Show the listing broker you have money to perform and they might be willing to spend time on questions.

Some investors out there have misguided perceptions that brokers are just waiting for any old potential buyer to call them and spend tons of time with them for free answering all kinds of questions. Maybe the new commercial brokers with more time than money. The highly successful brokers are already multi-millionaires and many investors themselves. They don't waste time on general inquiries from non-validated buyers asking lots of questions. You screen first to make sure buyer is serious, realistic, and has money THEN the broker decides on spending time. The sellers like the brokers being the gate keepers to filter out looky loos from the ones with the money that can perform and are not playing games.

I am not saying you are like this at all just saying I have talked to thousands of investors over the years and you learn by keywords they say and how they e-mail or make contact the probability of how they will be. That also goes for developers, regular sellers, attorneys, other brokers, etc. It's experience you gain in the field over time.

Good luck