Looking for a Commercial Brokerage and Mentor

6 Replies

Hey Guys.  I live just outside of Baton Rouge, LA and currently own a few residential rental units.  I have my Salespersons license working as a self investor agent under a residential brokerage.  Problem is, I'm wanting to go into commercial real estate doing transactions for myself and others.  Mainly retail centers and maybe some multi-family, but open to others.  

Does anyone know of how I can get in this niche of commercial real estate?  Any contacts of people in this area would be great.  

Go to CCIM.COM look for a “Foundations For Success In Commercial Real Estate” local course offerings. Some of the CCIM leadership and trainers practice in New Orleans and Baton Rouge.  Taking CCIM classess will connect you with others on the path you want to follow.

If you are serious about commercial then forget residential. There are some small commercial type mom and pop stuff some ALL IN ONE brokerages do in small towns but generally in strong suburban or urban core locations there are specialty commercial brokerages.

So some will only do retail or have a division that only does retail properties. Within those specialties some departments only focus on the property management aspect, tenant rep leasing, or the transactional side. It is typical for larger firms to have TEAMS.

An example is if a commission was 100,000 then the brokerage usually gets HALF leaving 50k to be split among the team. If there were 3 people on the team the senior director might get 27k, the director 15k, the junior (new broker/agent) 8k. So if you are just starting out you have to run on that hamster wheel pretty hard to make just 100k a year. At 8k a deal you would need 1,000,000 commission team total with splits to make about 80,000. After people put in their time and get experience they tend to move up the ladder to better splits at their existing company or move to another company where opportunity is to be higher up with better splits. Some go out on their own and start their own brokerage. I did that many years ago so I keep all the commission instead of working for another brokerage. I can do less volume and make a lot more money per deal so more time to relax in life.

Good luck. I am 15 years in the business. Starting out will be lot's of learning with a steep curve and small checks that hopefully get better over time.

@Robert Leonard Thanks Robert! that site and org is all new to me so great to know now.  I know you're well known locally and would appreciate any input on brokers in the area you may know of that I could work under and learn from.  

@Joel Owens Your perspective of the commission split is completely new to me.  Thanks for the insight! I'm so use to broker and agent only ones sharing commission but it seems right that there could be more folks involved in a larger deal.  I can scrap by to begin with, I just would like some help on the mentor ship side to learn the ropes. I have some friends and family that know I have a residential license and ask me if I can help them look at a strip center and seeing the sale prices of these and commissions it's pretty insane.  I just need some guidance on proper due diligence and a second set of eyes of me running the numbers. 

So my thoughts currently is how would a broker feel if I were to bring in the buyers from my contacts, and help be a guide to sealing the deal?  I would want to have a continued relationship with them throughout my career and would be fine with splitting commission for their services/guidance. Is this normal?  Would they be insulted and not really want to work with me because I'm trying to split the deal?  Thanks for your responses so far!

I can't speak for other brokerages but other colleagues I know stay busy around the clock. Someone coming to us and saying (teach me but I want half) the brokers LOSE MONEY.

Say working directly with my clients I make 200k on a deal. A new agent says they have friends and family looking at a retail center but it is smaller say around 2 million. If it is a higher cap rate deal likely mom and pop tenants and leases alone are 35 to 50 pages each. Other reports and analyses involved could eclipse 1,000 pages on one transaction for a retail center. The agent wants me to train them and then split the money. The small deal is worth say 50k and then broker gets 25k and agent gets 25k. That's a ton of work for a small fee. The buyers are green and then agent is green. The experienced broker does almost all the work for half the fee so return per hour goes down.

There are basically 2 main avenues to own as a commercial brokerage. You can be an individual broker that has your own company and then does your own investment deals without any agents at your firm. You could bring agents onto your firm and train them up. At first the team thing will take a lot of time and reduced earnings because you are splitting some fees with them. As team grows and volume goes up you might eventually reach income or surpass what you could do on your own. Some of my friends have teams and after splits make about 800k a year as the team owner or leader. It's all about your personality. Me I like my freedom and do not want to be stuck in meetings all day holding agents hands constantly training them up. It's just not my thing.

So by choice I like working with clients directly one on one and then having my investments. I do not like having 10 to 20 agents at my firm and all the drama that goes with that. My goal is not to build a big commercial brokerage firm over time. My goal is more having clients directly to transact as a broker and then the main part having my investment company where I am the sponsor and investors invest with me passively in syndicates. That is my longer term vision I want to grow more and more of. 

@Joel Owens I’m definitely getting on the same page quickly here. My thoughts were more in the line of any business is good business and a split of commission would be seen as ok but it maybe not now depending on their leads list. I really am fine with giving up commission in order to learn. But I want to find a way in to commercial. Should I approach a local commercial broker and say “I’d like to learn from you on a transaction and you can have the commission in return, can you be transparent on how these things work and the proper due diligence required in these types of deals?”

Thanks again. 

Also, my goal seems very similar to yours. I’m glad it’s not a crazy path to take. I also want to do my own personal investments and do not care to manage a firm with many involved. Maybe it will change later but that’s what I see now. Money is not my biggest driver. I just enjoy the aspect of real estate more and more but also want to enjoy more time with my family.