Pocket deals?

Question

Question for our fellow commercial RE brokers and / or investors,

Do you really send pocket deals to your A-list potential customers first? Is this a regular practice?

Just wondering...

Joel Owens · Answer

Flavio to do that you have to show you are a real buyer.

A personal financial statement for liquidity and net worth and a recent bank statement in the last 30 days is good for starters.

Also whether a buyer has bought commercial real estate before and is familiar with the process is a key component. Even if they buyer is well funded with cash but they have not bought  or owned commercial there is a little bit of a process to go through.

So if you have no money or little money trying some hair brained deal structure you will not get the time of day with brokers.

I can tell from basic phone questions and financial statements If someone has the capability to buy or not.

Mike Giudici · Answer

Do a no-nonsense deal with a broker and close smoothly and quickly. Let him/her know you are hungry for more. If they know you mean business and can see the deal through to the closing table, they will be more than happy to send you listings as soon as they get them.

The best clients get the first looks at these deals.

Steve Vaughan · Answer

Funny to see this subject this morning.  I am looking at a house today that the lead was e-mailed to me from a realtor late Fri night and I thought I was special.  Got my tenant buyer over there to see the outside right away Sat morning, got all excited, etc.  I'm sure now that I'm in a pool with other 'inner circle' investors in a silent auction type thing.  The 'pocket listing' I guess.  Didn't even know what that was until now! I feel a little bamboozled and have little interest in that.  Thing is, none of my marketing even seeks SFHs.  My  target is 14+ unit multi-fam.   I'll go, but intend to stick with what I know.

Steve Babiak · Answer

And the "heads up" will be given to the "inner circle" BEFORE anything is listed for viewing by the general public; typically, when the listing does get posted, the listing agent can immediately mark it pending because one of the inner circle buyers has already put it under contract.

Chris Winterhalter · Answer

@Flavio Zanetti

Very common practice, and a lot of commercial deals don't get "listed per se" on Loopnet or CoStar (more on CoStar).  They might be listed with the broker and marketed through his/her email & phone list.  However even when they are listed with a broker most will try to connect their inner circle of buyers with a particular type of product before it gets blasted out.

Some sellers mandate (some banks) that the deal must be listed.  Even so, many brokers will give the heads up to their circle.  It's the people they've done deals with and they know will perform.

Jeremy Tillotson · Answer

@Flavio Zanetti I frequently get them sent to me, but we have a history of no BS and performing a quick closing. I even had a local bank president contact me about selling off there inventory,(that was 2009 though oh the days, lol) I still get pocket deals but not as much right now

Martin Z. · Answer

sorry, i meant "in the area"

Martin Z. · Answer

Send a mailer to every broker in an hour, don't be cheap on postage. Present who you are, how much you've got, what you want,  your experience, and let the broker would rep you in any deal they bring. But beware, just because it's a pocket deal, doesn't mean it's a good deal.

Flavio Zanetti · Answer

I believe the million dollar question is how to get into those A-lists, inner circles, and ultimately having access to these pocket deals...

Thoughts?!?!?

Tim Shoultz · Answer

100% agree with the above comments. In todays market it seems like most deals are going to be pocket deals.  There is so much money & so little inventory on the market that if you are not getting a first look it is hard to find quality assets.  They are still out there, but you have to dig quite hard to find them.

Building relationships with brokers is crucial.

Pocket deals?

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