Hire or not hire a commercial broker?

Question

Hi everyone,

I wanted to get some opinions about a multi family property I am going to pursue.

My wife and I own 8 properties but the only “Multi Family” in that portfolio is a duplex. I am also a real estate broker but I sell mostly single family homes and have only dealt with duplexes and other very small commercial properties. I feel pretty informed in the process. I have read multiple books and listened to a lot of podcasts. However, at the end of the day, I don’t know what I don’t know.

With that said, if I were wanting to purchase a 12 unit apartment complex, would it be smart of me to hire a commercial broker?

I would love to go solo and be able to take the full commission. I would then use that money towards improvements in the property. I just don’t want to miss learning from a commercial broker and don’t want to make mistakes that could otherwise be avoided.

John Warren · Answer

@Mike Szabo if this is on the MLS, then I feel that it is probably fair game for you to make an offer representing yourself. This is easier in areas that are attorney close (like here in Chicago) because you still can get a knowledgeable attorney in your corner to help with any areas you aren't sure about.

For this particular broker, you might be able to back into what he sells on the MLS as well. Is this just a one off, or this broker the local market specialist in the types of assets you want?

Honestly, if you still are looking at this deal and you like it then just submit an offer and see what happens! You have to buy at some point, and you will never be 100% ready. Ready, Fire, Aim is my motto!

Wale Lawal · Answer

@Mike Szabo

Multifamily is very different from residential and if you are new to commercial you should get a commercial agent.

Here are some reasons to Hire a Commercial Real Estate Broker

1. Brokers Have Knowledge of the Commercial Real Estate Market2. A Rep Has Access to Other Commercial Listings3. CRE Brokers Have Access to a Targeted Network4. Reps Can Save You Time5. They Can Also Save You Money6. Brokers Take Emotion Out of the Deal7. Brokers Can Help Get You Favorable Lease Terms

Read this article for detailed information https://www.loopnet.com/learn/....

Good Luck!

Mike Szabo · Answer

@John Warren Thank you. I know that there are commercial properties off market that commercial brokers hold. This specific property however is listed on the MLS. It would still probably benefit me to build relationships with brokers for future deals.

John Warren · Answer

@Mike Szabo commercial real estate is not really done the same way that residential real estate is. You don't have an exclusive relationship with the buyer's agent, and instead most commercial brokers work both sides of the deal. Most of the good deals do not go on market on a website, so you can't just jump on and look up a list of active listings in the same way. Instead, you build relationships with all of the active commercial brokers in your area and you tour their listings. Over time, you will find a deal that makes sense, but you won't get a commission as you will be acting as a principle in the transaction. I recently purchased a deal here in the Berwyn area from a commercial broker. I am licensed and so was the seller, but we both were represented by a different broker. That is the way this game works!