I have a question about brokers. I know that certain brokers hear about deals that others do not. A recent example is that I called a broker (not the main one that my partner uses) to ask about recent sales and what he's seeing in certain areas of a city. He proceeded to send me 5 deals that neither of us had seen and they'd been on the market for a few months. This raises the question, do I limit myself to just one broker per City to find deals? Or is it ok to have multiple brokers in one city to find deals? My only concern that is that they would all become discouraged from sending me deals.
@Tom Edwards Most people have multiple brokers. Unless you are part of a pep squad, you're not responsible for ensuring sales people are motivated.
Save yourself the hassle and network with as many brokers as you can.
Don't lean on the agent to FIND deals, their value is getting the deals accepted/closed. Redfin can give you the next best thing to MLS access... it's easy hunt down a ton of properties. if you're going to play the multiple agent route, call the listing agent of the property your looking at. If the listing agent gets both commissions they'll be more likely to deal with you...but you're going to need to know/stick to your numbers.
@Tom Edwards Depends on what size buildings you're talking about. If you're talking about dups/tris, for example, having more than one broker searching MLS listings will be redundant and perhaps frustrating for the agent.
On larger deals, say 10+ units for example, the seller will typically list their building with a specific broker, not on the MLS. That broker will prepare the OM and bring that building to their known buyers and/or email list. So if you only have a relationship with "Broker A" you will never even know about the building that "Broker B" has a listing for.
You need to have enough broker relationships where you have an adequate pipeline of deal flow, so probably more than 1 broker and less than "every broker in the market". As an example, I'm involved in 4 different projects right now with 3 different brokers. All of these are dual agency deals, one broker representing the seller and the buyer.
It depends on the level of the broker and their network.
I have thousands of commercial retail property owners built up over the 15 years in business nationally. So if an individual is ( FISHING ) as I call it then it's a waste of time for me.
If I have clients totally committed to me then it makes sense to deploy resources and time. If I do not find them what they want then that is different but we have a call before starting to see if they are reasonable or looking for a 1 in 10,000 unicorn property. If they want that I will not be going on that journey with them.
Now there are times where I look for clients and they work with multiple brokerages BUT these are huge companies that buy hundreds of millions to billions of dollars in properties a year. Their business model dictates they want many resources looking for them for off market type stuff.
I am working on an off market deal right now for about 70 million for 2 multifamily buildings for a multifamily office client buyer. For those buyers it can make sense because if I make the sale the payoff can be huge on a per deal basis.
If someone is looking for say a retail property for 1.5 million, they are flaky and contacting multiple brokers, and are unrealistic with their terms we do not even start. Those types of buyers even if you do find the property tend to be inexperienced so you will be using up all of your time on one deal for a low payout. The professional buyers that own lot's of properties have their own system and attorneys with lenders etc. I find the property and they do 90% of the work and are buying larger properties.
That is different from my other clients where they have lot's of money and might have sold a business, high level corp executive, doctor,etc. but need help and experience finding a property and purchasing. For those I will have to spend lot's of time and my resources helping them along so I have to decide if I want to take that on and if they will make the commitment to me only. If not then I do not proceed on those types of buyers.
This is why some buyers when inquiring never hear back from busy commercial brokers because those brokers with vast years of experience can tell by a simple e-mail what the buyer is trying to do and odds of success. It's a function of time and effort for the return upon closing of a successful transaction and will it lead to more long term business etc.
Hope this helps some as I am an investor myself and principal commercial broker. Retail triple net STNL I will work with 1 million and above in price because it is 1 lease to review. Multifamily the property has to be much higher in price before I touch it. Same with retail centers I generally like 2 million and above and preferably 3 million price point starting.
There is a difference between a retail center with 3 tenants newly built 1.5 million all NNN plus cam from an older 15 year old building with 10 mom and pop tenants with all different leases and types gross, NN,NNN,etc. and the buyer is looking for help every step of the way. That scenario is a ton of time and effort for maybe a 35k to 40k payout. On those types I generally like to see a payout of 100k or more for the work involved.
I would say that it is generally better to work with multiple brokers than single sourcing. Brokers are sourcing deals in the market and many have longstanding relationships with the owners.
I think the number you work with really depends on your bandwidth. The goal is to find situations where both you and the broker can add value to your respective businesses. If you only have time/experience to work with three brokers really well, I would think that this is preferable to "email blasting 50 asking for a deal". On the flipside, you may have the bandwidth to work professionally with 50 brokers.