Brokers, Finding deals and and Finding Brokers

[Nick Newby]

Hey Everyone, so I've been listening to a lot of the podcasts basically on loop and a few thoughts and questions keep coming up that I want to see what people think about them.

I'm new to multi-family and keep hearing that most brokers won't take you seriously without having closed any deals before.  This makes sense, and is unfortunate, but I'm curious.  In these discussions, is it common to be representing yourself and trying to reach out to seller agents to find properties, and attempting to build the relationship with them?  The reason I ask this is that it doesn't seem like most people are searching for and finding properties with a broker of their own, but are hoping to try to talk to brokers that have listings, and convince them to work with them on a deal they are listing, or preferably to have them provide deals that are off market.  It makes sense that they would run into issues simply coming off the street to a broker, saying, hey show me the best opportunities that you have, that you aren't showing to anyone else, trust me I'm worth it.

A follow up to this is, if it is common to not have your own broker help you to find these deals, why do you not want your own broker from the start?  Is it cost? Is it ego?  Is it simply customary?  When I bought my home, I solicited a broker before even looking at a house.

Next question is if you are looking at a market you are not in, and your broker is in your market, is it beneficial to seek out a broker in the other market, or again is it worth using brokers you know, and have them work in a new market just like you are?  I understand that broker may not know the market, but isn't it better to have someone in your corner, even with less knowledge, than flying completely blind in a new market?

Finally, and this may be a very newb question, but is it a joke to think that finding a Deal on Loopnet, or another public site is a possibility?  I know you can get the best deals off market, but is it unreasonable to think that there are still decent deals available on these listings?

Thanks for the insight!

Nick Newby (not an adjective :) but my last name)

[Chris Tracy]

1) Most brokers won't take you seriously without having closed any deals before....

Brokers are busy people like everyone else.  Rightfully so, they guard their time preciously.  Many brokers totally understand that you have to start somewhere.  The problem lies when you sound like you don't know what you are talking about and have no plan.  The remedy for overcoming this is to learn the dialogue that you need to have an educated conversation with a broker, so they WILL take you seriously.  You ultimately need to partner up with people if you haven't closed anything before.  

2) Is it common to be representing yourself and trying to reach out to seller agents to find properties, and attempting to build the relationship with them?  

YES

3) Hey show me the best opportunities that you have, that you aren't showing to anyone else, trust me I'm worth it.  

You hit the nail on the head here and this is where many people drop the ball.  Going up to a broker (cold) and asking for off-market deals is the equivalent of going up to a woman in a bar and saying, "Hi, I'm Chris... Will you have sex with me?"   So, as you mentioned, you have to build relationships with brokers and befriend them... separate yourself from the million other investors that are also bugging them for off-market deals.  Meet brokers face to face for coffee, take them out to lunch, play golf with them, etc.  You only need a few good friends to feed you!

4) A follow up to this is, if it is common to not have your own broker help you to find these deals, why do you not want your own broker from the start? Is it cost? Is it ego? Is it simply customary? When I bought my home, I solicited a broker before even looking at a house.  

You could have a buyer broker help you find deals... a wise move.  It's probably the agreement that the broker wants you to sign that has most people apprehensive.

5) Next question is if you are looking at a market you are not in, and your broker is in your market, is it beneficial to seek out a broker in the other market, or again is it worth using brokers you know, and have them work in a new market just like you are? I understand that broker may not know the market, but isn't it better to have someone in your corner, even with less knowledge, than flying completely blind in a new market?  

Go with the broker that is intimate with the market you want to investigate, especially if it's far away from your backyard.

6) Finally, and this may be a very newb question, but is it a joke to think that finding a Deal on Loopnet, or another public site is a possibility? I know you can get the best deals off market, but is it unreasonable to think that there are still decent deals available on these listings?  

Loopnet often gets a bad rap... I work with investors that have bought deals on there.  It's rare that you find a juicy deal on there, but I wouldn't totally dismiss Loopnet as a deal source because you never know where your next deal is going to come from!  Use Loopnet more to meet the brokers, not so much to find deals.

I hope my 3 cents helps you Nick!