All Forum Posts by: William Yeh

I'd recommend reaching out to a cost seg company for guidance on whether appurtenant fixtures can be included and what consequence there are, if any, should you dispose of those fixtures. Sounds like you have a good deal though so congrats!

Loopnet is the consumer facing branch of Costar. You can also try Crexi and Brevitas.

If your client is looking to buy, why not represent them yourself?

@Dan Rowley I'm confused by your post. If it's non-recourse, then by definition there are no guarantors on the loan and the loan is guaranteed by the underlying collateral alone no? Recourse debt requires a guarantor.

Most competent commercial and residential brokers for that matter will only work with clients that make at a minimum a verbal commitment to work with them exclusively, if not a written commitment. That said, just as a broker doesn't want to waste time on a client that's going to shop them the entire way, a savvy buyer shouldn't make a commitment to a broker who lacks responsiveness/expertise/ fiduciary responsibility.

To further state the obvious, in small/midsize markets, there are only so many commercial brokers that are active/competent in the space so if you go around shopping them and in the process pissing them off, you might find it hard to break into a given market after you've exhausted your relationships. My recommendation would be to find one that has the bandwidth to take you on and build the relationship over time.

@Sean Resavy

Barry, apppreciate your breaking things down. Yes would definitely be interested in checking out your pro forma to see what some typical ratios are (each cost line item as a percentage of finished value).

Sean, will DM you.

Hey BP Fam,

I've just secured an off market listing for a 10 acre residential development opportunity in Vallejo, CA (tertiary bedroom community to San Francisco and Napa). To those that have had experience in developing single family subdivisions in CA, whether for build to rent or for sale, what are the metrics that tend to make you green light a deal on the raw land (cost per acre, minimum unit density, neighborhood/city characteristics, etc)? Curious what the rough guidelines are on pro forma for such a deal to pencil. TIA

I've brokered medical offices and been on the investment side. Aside from just looking at the asset itself, dig into the local competitive market for that particular type of asset.

What are comp rents going for? How long have competitive units been on market? Does the subject property have any competitive advantages? What's the quality of the subject property vs. the comp set? Have in place rents escalated past fair market? How much deferred maintenance is there? How dated are the suites? How much will it take to renovate the units/common areas if needed? Are any of the tenants close to retirement with old suites that require a ton of TIs and lease up costs to turn over?

The better you understand both how the subject property operates as well as how it fits into the local market, the more precise your underwrite will be and the less likely you'll be to have a nasty surprise.

Also consider where interest rates are heading and what market caps are doing. Cap rates have not meaningfully decompressed to take into account higher borrowing costs. The catch up we believe will happen but won't be immediate until interest rates cool off demand.

Hey BP Fam,

I've come across enough posts from struggling new agents that I wanted to offer some unsolicited advice in the hopes that it helps at least one new agent out there gain clarity on how to build a successful business.

I am both a residential and commercial broker and I've had the incredibly good fortune of starting off my real estate career by running my family's real estate investment portfolio and transacting those deals. As such I started off and continue to be a part time agent for non-family buyers/sellers which helped ensure that I had stable income from W2 and "bonuses" from commissions whenever they happen (hence no pressure to close deals).

Family deals aside, because I chose to grow the business organically through my sphere of influence, I've been able to not waste a dime on advertising or a minute on chasing cold leads. My model is to treat the clients that I have the privilege of serving better than 99% of agents out there, both during escrow and after closing (respond faster than anyone, anticipate my clients needs and address them before they raise them, etc). By doing so, I've built a network strong enough to provide referral business which I rely on for 100% of non-family deals.

When I first got my agent license, I focused on residential as almost everyone knows someone looking to buy or sell. When I started off, I threw a few bucks at online marketing/craigslist and ultimately never closed a single deal from those efforts. As soon as I stopped advertising and started telling my friends/family that I was in the business, I started closing deals.

Why? Because the strength of your relationship with your client and how credible/capable your client finds you is directly correlated to your probability of successfully closing that client. If your lead comes from the cold market, is that lead more likely to give you the business or their friend/aunt/uncle that's licensed that they've known their entire life?

To those agents starting off in commercial, that is an incredibly tough road to take. Unless you happen to be blessed with a network of high net-worth property owners, investors, or business owners, you will not hit the ground running and you will IMHO be taken advantage of by large commercial brokers with crap splits, no leads, and no pay coming your way. New commercial agents are basically indentured servants. Consider adopting realistic plan on growing your business, starting with the basics (ie. residential), and working your way up to larger and larger deals (both residential and commercial) as your network expands.

I'm not saying my path to where I'm at is for everyone and again I recognize how incredibly lucky my start was but my strategies have proven to be highly efficient in terms of time/dollars spent per deal closed and I don't see why others just starting off can't follow suit.

Wishing you all much success.

Hey Ronald. The way I see it, you can either 1) find a broker within your personal network to connect with or 2) find a broker that has a strong presence in the market that you want to build your business in and engage them in conversation. Also there's 3) talk to you current broker about your needs and, assuming they are competent and willing, maybe they meet you half way and get you the training you want/need.

Getting your license is the easy part. Finding your path to clients is of course the much greater challenge. Wishing you much success in your journey.

100% depends on what your objectives are. Are you looking to do residential, commercial, or both? (Very few do both)

Are you hoping for a broker to feed you leads or are you capable of producing on your own and only need guidance from them and to learn how to run a transaction?

In general, the more capable you are of producing on your own, the more leverage you'll have when negotiating your split.