Need help winning a multi-family deal in Houston

[Kusum Chanrai]

Hello! I'm trying to buy a multi-family apartment building in Houston. I'm facing two challenges: 

1) Incentives are not aligned in my favor. The deal is through Marcus and Milichap. I'm working with 1 broker from San Antonio, but that is not the Seller's broker. The Seller's broker in Houston also has a client who I'm competing with. He would obviously much prefer it to go through him, so he gets twice as much commission. Has anyone encountered a situation like this? If so, do you have any advice for me? Can I ask my broker if he'd hand the deal over to the other broker - and I'd pay him on the side? 

2) I've just offered asking price for the property. It will give me a 8% Cap Rate. It might need to go above asking price. I'm thinking of offering up to a cap rate of 7.5%. How does one decide what price to offer up to? 

Any advice or suggestions would be much appreciated. 

[Michael Le]

@Kusum Chanrai

1. Generally there are not buyer's brokers  involved in apartment transactions. The listing broker doesn't have to worry about sharing his commission because they don't usually offer splits. If there is a buyer's broker then the buyer normally pays for them. Do you have a signed contract with the San Antonio broker? Also, why do you have a broker based in SA looking for properties in Houston?

2. I'm concerned with how you have underwrote this property (if you did) based on this question. I hope you did not just take the broker's numbers at face value. Considering that I seriously doubt you will find a true 8-cap listed by a broker, I assume you might have just used the numbers listed in the offering memorandum. Either way, how you decide what price to offer should not be simply based on what you perceive to be the cap rate coming in. You have to base it off of what you plan to do with the property, what sort of income/expenses you think you can achieve after you execute that business plan, and what your exit plan will be.