New to the Commercial Real Estate (CRE) Brokerage World

[Ty Martin]

Hi BP family!  

I just got licensed in Pennsylvania as a Commercial Real Estate Broker with Wolf Commercial Real Estate (WCRE).  I'm located at Three Logan Square in Philadelphia, and am looking for both advice and connections.  

Does anyone know of any meetups?  I'm interested in meeting investors and also other brokers.

Also, if anyone has any advice towards getting started I am certainly open to hearing what everyone has to offer.

Cheers !

[Joel Owens]

Hi Ty,

Welcome to the club!

Ty generally you get the farthest by specializing in asset class and what subsector of it you wan to pursue.

Example you can look at multifamily, retail, industrial, office, mobile homes, commercial land development, and on and on.

Within each sector you can then look at for example if you want to do transactions, do property management, or tenant representation or landlord work for leases.

Generally lowest return is property management, then leasing, then transactional is highest return, followed by pinnacle is usually syndicating deals as a sponsor and investor.

So find a sector you really like and then daily work to become a world class expert at it. Then people seek you out for business instead of the other way around. You then should develop a successful track record and book of business.

It is hard starting out as mainly the brokerages get the money.

Example I am 15 years in the business and a principal commercial broker so on a 100k deal in commission I get it all.

With a commercial big firm it might look instead something like this.

100k

Firm gets 50k

Then you might have 3 to 4 people on a team. Let's say 3.

Senior Director gets 27k

Director gets 15k

Junior Director gets 8k

So the senior director has to almost do 4 deals to my 1, director almost 7 deals, junior director 12 deals!!

As you can see working for a large brokerage you have to run pretty hard on the hamster wheel to make any significant money. Some will put in their years and stay at a firm and move up where they have better splits and others if no positions to move up will go to other companies with more opportunity.

Eventually usually one of two things happen. The higher up brokers start teams with many people such as 10 or 20 to increase volume and trying to make more money. Some of my friends make 800k to 1 million a year doing that.

Then there is another way where you go out on your own eventually as a principal broker and have your own investments and then work with your clients one on one with no teams. You keep it simple and not managing tons of people with countless meetings trying to get the sellers to lower price and get buyers to up price so you can close more listing inventory. I stay more on the buyers side by choice and then try to find the seller at the right time to sell and put a deal together.

Big thing is splits will likely not be great while learning but if you can stick it out eventually closings and pipeline should fill up. Just remember  commercial is a relationship business. People get caught up in the numbers and stats and yes that can be important but most people with high net worth (millions) to ultra high net worth tens of millions or higher want to work with people again and again.