Finding local commercial brokers

[Marc C.]

I wish I could rename the title "Here's how to find local commercial brokers," but BP won't let me change it. So now the same question will keep coming up over and over again. 

Since this topic comes up often, I thought I would paste here some of the stuff I have posted to others looking for commercial brokers with apartment listings. 

Personally, I like to look at who the Listing Agents on Loopnet are for properties in my category. I also search Realtor.com for apartment listings and see whose names come up over and over again. Finally, I join the local REIA, and, if I can't attend, seek recommendations in their Meetup or Facebook pages. 

In each market there are 4-5 agents who do a large percentage of deals. You want to meet with all 5 of them in person, with a one-page write-up of your business plan (on your company letterhead) and what you are looking for, then follow up with them by phone or email weekly, in the hopes they call you with their next pocket listing. When they send you deal, send them feedback about EVERY deal with what you liked and disliked about it, so they get a better feel for your needs. Send them an article or two when new data comes out on the market, by mail if necessary. Find out when their birthdays are and send them physical cards. Also, after you meet with them the first time, send a personal thank you card by mail.

Don't forget: One of the reasons you meet with these brokers is that you want recommendations on managers, architects, lenders, contractors, appraisers, etc. You'll get the same names from some of the brokers...a good sign. You MUST have a team in place and be able to tout them. 

By the way, the top apartment managers often know who of their owners is ready to sell. They will originate some pocket listings. I would want to talk to the same 5 top managers (may be the same as brokers in some cases) and get recommendations from them about other team members, as well as to find out what their rates are and if they have any "pocket listings." Same thing: Meet in person, send thank-you card, email them every couple of weeks. Try to become the guy they call FIRST. 

Just remember: Brokers are hearing from TONS of buyers from all over the country these days. They will quickly assess whether you are worth their time or not. One way they will do that is if you visit them in person, not just by phone. Just don't expect too many deals to flow your way until you get at least one deal in the market under your belt, as there is tons of competition. A "Greater Fool" from California who thinks a 6% cap rate is a smokin' deal is going to beat you out much of the time, but who cares? Make the offer that works for you (via Letter of Intent) and move on to the next one. Offer three options in your LOI, and include the TOTAL money they will receive in each scenario, i.e. $1M purchase price but, over 10 years of seller-carried interest, it becomes $1.5M, and that sounds pretty good to those who get stuck on purchase price alone.)

Finally, as I have posted in other discussions, I am getting good results finding off-market deals from direct mail directly to building owners (20-50-units). In this range, you find the Mom and Pops looking to retire. Takes time to prepare all of them mailings and make them look good (hand-written envelopes, real signatures on a one-page letter). Just got started, but response has been good; 6 out of about 120 letters, so 5%. And they are all serious sellers so far. For two of them, I had an LOI to them within 72 hours. Haven't done any deals yet, but working those two. If they don't sell, I will send the same offer in a couple of months, and keep doing so until they sell to me or someone else.

PERSISTENCE COUNTS FOR A LOT IN REAL ESTATE!