hard to find good commercial agents?

Question

Anyone find it hard to find a good commercial agent? I  recently have decided to switch my business from flipping and small holds, and attempt to buy bigger multifamily and commercial. However I    am finding it very hard to find an agent to take me seriously. I    have a good amount of cash and have access to quite a bit more, yet that isn't enough, even with proof of funds. It seems that most commercial agents are investors themselves first, or they have much bigger whales to feed. So all the good deals either they will buy, or send to their bigger clients. Any deal that gets tossed my way has already been turned down several times and isn't worth my time. I    am trying to network as much as I    can, but I    am finding this to be much more challenging than I     expected. Any advice for a new commercial investor to find some deals?

Daniel Kurkowski · Answer

Let me give you a commercial agent's perspective of what we deal with so you can put together the most helpful approach to get them on your side.

When I meet a new client, the vast majority of them aren't quite sure what they need or are looking for.  When I already have a client who knows and trusts me, I know they can act quickly on a deal and will treat me fairly during the transaction.  With a new investor I don't have the same certainty.  If you can convince them of your decisiveness you will be at a huge advantage.  This works to your benefit as well.

A majority of people I speak to want to get a non-exclusive agreement with me and it is very much a matter of if you can't commit to me, why would I commit to you?  Commercial agents get cut out of deals waaaaay more than residential agents, so we need to know you're  not looking to be cheap, that you value our services and can commit to paying us.

I'm not saying you haven't done all of this, but again you will be amazed at how many people want to use us to pay nothing to get everything.

Joel Owens · Answer

Brandon lot's of buyers are either flakes or unrealistic. I specialize working with buyers nationally for larger multifamily and also retail commercial properties.

Some are serial lookers afraid to buy the property when you do find the deal for them.

Be blunt with a broker. I have my clients fill out an Excel financial statement. If they do not fill that out and send bank statements we do not even start the process. If I can't vet them before putting time and resources into them it's a non-starter.  I have to have an ultra clear picture of their financial capability and where the money is coming from along with is their buying criteria realistic or are they searching for a 1 in 10,000 property that 50 buyers will offer on when it hits the market?

Brokers like to be efficient with their time to a make larger returns. They do not tend to like working with newer buyers needing tons of help buying smaller properties for a lower commission check.

If you can be more descriptive such as your net worth and liquidity, annual income from job or business, total global cash flow, asset type, deal size, LTV with amount you are looking to put down, area, cap rate expected, fully stabilized or value add,etc.

All of these things a good commercial broker will KEY in on to see if what you are wanting to do is readily available or you are looking for a needle in a haystack or wild goose chase type thing.

If you are looking to find above market cap rates there are REIT's, pension funds, insurance companies that buy hundreds of millions a year in properties that I can call to purchase in 3 to 4 weeks close all cash. They have experience, attorneys on staff,etc. to where I just find the property.

If it's a newer buyer which I specialize in there will be a lot more heavy lifting involved to get to the closing.

I am a principal broker so my structure is different than listing brokers. They tend to have teams and if commission is 100,000 then 50k goes to brokerage and the remaining 50k is split among 2 to 3 others. Senior guy or gal gets 20k plus and guy at bottom junior agent might get 8k or so.

The listing brokerages tend to only push their inventory to sell whether good,mediocre, or bad deals. I go through my vast database of owners to source the best properties to buy and do not focus on the listing side. I do deal with owners off market but I do not want to officially list their property, market it, take tons of offers from buyers, call to market,rounds of bidding and all that crap. I am not the right person for those types of sellers. I like bringing an offer from my buyer and if we do the deal great but we are not waiting around months for a seller to extract every basis point out of a sale.

I am an investor myself and I do want to buy deals of course. If someone is buying a 4 million value add where I make 100k commission on a transaction then that excites me. If someone wants to buy 500k deal where they make upside of a few hundred k and on the purchase I make 12k to 15k then that does not motivate me.

I am not speaking for all commercial brokers just how I like to do business.

Tom Blake · Answer

@Brandon Giarusso much of what you said is true for some brokers, but not all. Regarding brokers being investors themselves, this may or may not be true but it shouldn't deter you or change your approach. To get traction with a commercial broker in this market, it takes a lot more than just money - people with money are a dime-a-dozen. A. they have to like you, B. they have to be confident in your ability to perform (buy) which comes from you showing them that you know the market where the property is located, and you understand the property type. The less you seem to know about both, the lower their confidence will be that you are the right buyer for the opportunities they do have. Be ready to give a very short, clear, easy-to-understand answer to: "What kind of returns do you need to hit for a deal to make sense?"...the #1 tell that someone isn't ready to buy (IMO) is a lack of clarity around what they want.

Also, let them know that they will be representing you on the buy-side, and they'll have a good shot at repping you when you go to sell (aka 2X commissions). It's okay to be vulnerable about areas where you aren't an expert - good brokers will want to help you succeed and you're open-ness will be a breath of fresh air.

As far as finding brokers - try loopnet and/or Costar. Both can be pricey, so an alternative is to ask a friend or broker with access to let you hop on and collect names and contact info for 20-30 minutes. Another idea: google the major brokerages (Cushman & Wakefield, Marcus & Millichap, etc.) in the markets you like and ask to speak with any investment sales brokers who specialize in your desired property type.

Paul Cattin · Answer

I would develop a solid criteria for size and product type you are looking for. An example may include the $$ budget you have, areas you like, you buy with cash or use debt (30% down +/- typically), and product type you prefer. The four main product types are: Retail, Office, Industrial and Multi-Family. Loopnet is a good resource for some of the stuff out there to understand more. However, a broker will get you much further.

As for a broker in your area, there will be different brokerages that are stronger in specific types of product. Regardless, you will want to find a broker that you like working with and specializes in a particular product type with experience doing 'Investment Sales' within that product.

Since you are new to commercial properties I would be up front with brokers about that, and leverage your residential investment knowledge. You will most likely not get a Senior person, but you should try to find a good Junior broker with some hustle that works on a team with a Senior watching over them. That should help insure some sense of priority and trust to find the right "investment."

The key from here would be to make sure when they send you things, respond promptly and briefly why you like or dislike something so they may be more efficient with their time. I hope this helps.

Joel Owens · Answer

Another part also is reputation. I have won deals for my buyers because the listing brokerages know me and that my buyers perform.

If an unknown buyer contacts a listing brokerage the listing brokerage wonders who will work with and control the buyer through the process to closing if they select them? Often the listing brokerages want to list properties and not manage buyers. I specialize on the buyer side with clients. Some buyers think make tons of offers and one will work. When they pull out of a deal it can damage the listing brokers relationship with their clients for more than just one transaction. That is why listing broker want to push a know commodity offer whether that is a direct company or a broker on the other end they know vets their buyers and will perform and are not flakes.

Jay Chang · Answer

Lots of good advice from this post

https://www.biggerpockets.com/forums/432/topics/56...

Something I learned is searching for realty companies on the chamber of commerce. Try some cold calling and see what the broker's expertise is before revealing what you are looking for. If the broker only does office properties, and you are looking for multifamily properties, then you are probably wasting your time. I heard from multiple investors to stick with a few good brokers, having too many becomes rather counterproductive.

Good luck!

Michele B. · Answer

You don't need someone else to get you leads. Just network on here and on Alignable or linkedin and just ask for leads.  People will give you leads. Do some research on your own also. Most commercial deals that are good get snatched up quickly and most before they are even listed.

hard to find good commercial agents?

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