Hey BP, I’m looking to step into bigger (mid-sized) apartment investing and wondering what advice you would give on finding and picking a commercial broker to work with? What experiences have you had? Any resources that I should check out other than calling a random broker to interview?
I know what I am looking for and am very specific but do not have any contacts in the commercial broker realm.
@Kevin Reinell Have your ducks in a row before you call them, such as knowing what you want, your finances, etc. Brokers get a lot of calls and emails and you need to set yourself apart as a serious buyer. Maintain consistent, periodic contact with the broker to stay top of mind with them. It will also help to add value to them in some way.
Best of luck!
@AJ H. I can definitely do all of that, thanks for the advice. Any idea where to even start looking for a broker? Is there a database or search engine specific to use? Thanks!
You can Google search for commercial brokers in the markets you are looking for. You can also go to sites like LoopNet or Crexi and see who is listing the type of commercial properties you're looking for then reach out to them. We've used both of those methods. Lastly, can always ask around for referrals.
Best of luck!
Go directly to their websites. Find out who is selling properties in your area and call them. If you are having a hard time with doing that, then go to Loopnet and call the brokers that have listings. I typically don't call about the specific property, but just have an introductory phone call. Another great way to find out who is doing business, is to call the lenders, appraisers and property managers in the area that deal with your target property and ask for referrals. Check out this article for more tips and details:
@AJ H. Yeah, I was planning to reach out to brokers on loop net that have the type of listings I am looking for and do the introduction, sounds like that’s probably the right first move. Appreciate the advice!
@Todd Dexheimer thanks for your insight, I’ll start to make some calls, calling lenders to ask for referrals sounds like a great idea as well.
@Kevin Reinell Your main focus should be to build relationships with the brokers. Find a way to add value to them. Take them out to lunch. Be prompt with feedback.
I just had lunch with a broker today :)
@Justin G. Thanks, I know it’s mostly about relationship building, but what advice would you have for building relationships with brokers in other states? I am in CA specifically looking to invest out of state. Thanks!
@Kevin Reinell Be different. There are tons of people contacting them from out of state. Drive there to take them out to lunch and tour a couple properties.
@Justin G. Thanks for the advice!
I'm a commercial real estate broker in Seattle, so some thoughts from a broker. In terms of finding a broker, try to find those who are active in the market. Drive around and look at for sale buildings that fit what you are looking for and call those brokers and try to connect with them. Once you have found a few, if you can find one that owns rental/investment properties of their own that is going to be gold for you because they have gone through the buying process personally, and when you have money in the game you know it better than just a commission (trust me).
Once you have found that broker there are 3 things you can do to make you the #1 contact. 1) Get back to them FAST. Be a fast no, and a slow yes. 2) When you say yes, follow through (within reason) and 3) be patient, finding good property especially in the commercial world, takes time.
Happy to answer any other questions you may have!
@Kevin Reinell , I don't know what you mean by "mid-sized", but when you are getting into larger deals that are not listed on the MLS, generally you are acting as your own representative. There isn't really a "buyers rep" type role like in single family and small multi's.
I guess that might be market specific, because there are totally buyer reps for all sized buildings, from $500k to $100million+ here in Seattle.
I would say getting on the phone with brokers and following up with them over time has paid off the most for my team and I. They do receive lots of calls so the most important part is to show that you are not looking to waste their time and follow up with them consistently. Perhaps call them on deals that they currently have listed, explain why or why not it does not meet your criteria. This will help you establish your credibility as well as build a relationship with them. Getting in front of them - in person- is the best way to solidify your relationship, in my opinion.
Hope that helps.
Keeping it candid as possible. The commercial brokers that are good are busy so I'd focus on what you can do to prove to them they want you as a client. I turn away about 90 percent of people who want to be our client because I get so much repeat business from my current client. You may be qualified on paper but not qualified as far as breadth or knowledge or the other way around so a good CRE agent has to make a significant investment of time, their most valuable asset when they take you on as a client. Its pretty simple, show them you are good return on time and they will show you the deals.
@Charles Kao thanks for the advice. Curious to know as I have heard this debate before from others, and maybe it’s different in commercial world, but what is your take on approaching multiple brokers in same market to help with feeding you leads? If you have multiple broker relationships does that create a potential issue?
@Charles Kao Great feedback.
Also looks like we are not too far away. I am in Indy.
@Kevin Reinell There is no issue approaching multiple brokers in the same market. The main thing is that you want to make sure you have all of your ducks in a row before contacting them if you know what I mean.
Have the real estate knowledge, know the lingo, know what kind of asset you are looking for, express the credibility of your team, and have the resources available to be able to close a deal. Also try adding value to these brokers. It's a relationship business.
I would stick to the advice given previously. Shopping multiple brokers which seems like common sense in residential but not the case in commercial because to be honest getting one good broker to pickup your phone is enough. This is not residential real estate where you need more than a dozen deals a year. One good commercial deal will make your year.