5 Steps to Approaching Commercial Real Estate Brokers

One of the most important members of a commercial real estate investing team is the broker. A relationship with a great broker is a must for finding great deals. But as a new investor, it can be difficult to approach brokers and establish a relationship.

Here are 5 steps to take to increase your success when approaching commercial real estate brokers.

1. Educate Yourself

The first step is education, in that you need to gain sufficient knowledge about real estate investing before ever approaching brokers. Of course, if you’re just getting started, then you’re far from being an expert in the field. However, you cannot expect a broker to take you seriously if you can’t even speak the language.

For this reason, it cannot be stressed enough the importance of having at least a certain threshold of basic real estate investing knowledge before approaching brokers. And you should be continually learning and educating yourself.

2. Understand the Broker’s Perspective

It is very helpful to understand that a broker is a sales person. They’re goal is to sell real estate. If they don’t make a sell, then they don’t make money.

When you understand this perspective, then you can appreciate why brokers prioritize their time to the people who are serious about purchasing property and not wasting time with those who are just “kicking the tires” and contemplating whether they want to do a deal or not.

Appreciate the broker’s perspective and respect their time, and they will reciprocate.

3. Study Your Market

If you want brokers to take you seriously, then you need to know your market along with a generally good reference for the submarkets. Commercial brokers know that serious real estate investors consider it an essential part of their business to know their target markets.

Now with that said, are you expected to be intimately familiar with the demographics of every zip code and neighborhood? Of course not. However, you should be able to discuss why you are or are not interested in certain submarkets as part of your investment criteria...which leads to the next point.

4. Establish Your Investment Criteria

One of the first things that every investor should determine is their investment criteria. That is, the minimum high-level criteria a potential opportunity must meet in order to move forward with more analysis. These are essentially our screening tool with which we can quickly perform a high-level analysis of specific property factors.

For example, your investment criteria could be Class B/C properties, built after 1975, consisting of 100-300 units, with value-add components, and existing rents at least 10% below market.

Whatever your investment criteria, the important thing is to establish it, be able to explain it clearly, and then stick with. Even when brokers send you deals that do not meet your criteria, its important that you still stick with it.

In these cases, part of establishing rapport is that you politely respond back to the broker, thanking them for sending the deals your way, and then reminding them of your investment criteria. The more you continue doing this, the more you demonstrate to brokers that you are serious, and not just a newbie anxious to take a swing at any deal that comes your way.

5. Be Confident and Be Yourself

When you’re serious about doing deals and committed to the learning, growing, and relationship building involved as a successful real estate investor, then people will want to work with you.

Those who have been thriving in real estate for a while know fully that it’s a team effort and one that’s built on relationships. For this reason, if you’re following the steps above, then you should be confident when approaching brokers and other real estate professionals about potentially working together.

Likewise, the best approach is to be yourself and not try to pretend to be someone you’re not. Maybe you don’t yet have a track record of investment experience that you can discuss. Then partner with someone who does and talk about your partnership’s track record, and confidently about the strengths you do bring to the business.

Conclusion

Knowing how to approach commercial real estate brokers can be challenging when you’re first getting started as an investor. But by taking certain steps such as educating yourself, understanding their perspective, knowing your market, having clear investment criteria, and being confident, you can begin building solid relationships with brokers and seeing more potential deals flowing your way.