Advice for getting into commercial real estate as an agent?

5 Replies

Hi BP, I'm 24 and planning on getting my real estate license but I want to work more in the commercial side rather than residential. Mainly because I want to learn the industry so that I can successfully invest in commercial real estate in a few years once I actually have some money to invest. Any tips on how to get in with a commercial real estate brokerage? Should I start trying to shadow others before getting my real estate license, how can I bring value to their team without having much experience already?

Thanks! 

Starting out in commercial IF a commercial brokerage accepts you once licensed and passes the state exam in good standing then expect the first few years if you are doing transactions to make next to nothing with your splits.

If I get 100k commission I get to keep it all from a transaction but I own my company about 18 years in the business. Starting out you will be on a team. You would be a junior agent so out of 100k commission maybe 50k goes to company. 3 people on a team the senior person out of remaining 50k might get 26k, middle broker 16k, junior broker 8k.

As you can see by the splits you would have to do 12 transactions to my 1 for the same money. You would just have to hustle really hard and put your years in getting trained up and learning to work your way up to a better split.   

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Build a niche, find a submarket, asset type, whatever, but become the expert on it. Know every building, every owner, lease rates, etc. Thats how you create value as a complete newbie, then slowly you can expand your expertise to other areas. Prepare for 2 years without a check. Most shops won't even do a draw schedule these days, so you better have some savings!

@Jonathan Schweinefuss

First two years in commercial brokerage as a beginner are basically learning and establishing some contacts. It’s an investment in your future. Joining a team may mean an immediate, albeit somewhat meager income vs no income for the better part of a year. The top commercial brokers earn $5-10 million per year. The 25% at the bottom earn 0. Ultimate free market.

@Jonathan Schweinefuss , Here are some tips to a successful commercial real estate investing;

  • Be an investor instead of an accumulator of commercial properties. The whole idea of making investments is to produce an income or a profit. So, if you buy a property that produces no income or profit, you really just acquired a property (instead of making an investment).
  • Understand that every property has a lifetime. One of the biggest mistakes you can make as an investor is to ignore the fact that over time, you’ll have to spend money on the upkeep of the building. The building may need a new roof, and the electrical system may need to be updated. Every building goes through these phases; some more so than others. So make sure you have a long-term plan to handle such repairs.
  • Focus on one investment type at a time. Especially when you’re first starting out, you should focus on one type of investment: apartments, offices, retail, land, or whatever. Each deal needs and deserves your undivided attention. It’s better to be master of one than average over many. And who wants average-performing properties anyway?
  • Consider environmental problems. A huge potential concern when owning commercial property is hazardous waste problems. Property owners have the primary responsibility for fixing such problems, even if the current property owner didn’t cause them.

Goodluck!