How to Choose the Right Commercial Broker for Your Next Investment | Daily Podcast 176

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“I’d buy it. It would be a great investment.” How many times have you heard this phrase from an agent when inquiring about a property? How many times have you heard agents tout properties that no one in their right mind would buy unless they were looking to lose money? Like parents who think their kids are the smartest, it seems to be the default response from agents and brokers that the properties they represent are always the best investments you can make. Look, I love real estate, but the reality is not all real estate is a good investment. There’s a reason they’re giving away properties in parts of Detroit. If all you have to do is promise to renovate them to receive title free and clear, why are so many of these properties still available? Because they’re not great investments—at least in the eyes of investors who know what they’re doing. At one point in my investment career, I started paying attention to those agents and brokers who had a habit of saying, “That’s a great investment,” vs. those agents and brokers who spoke a different language, the language of an investor—my language. I started taking inventory of the tendencies, habits, and language of both groups of agents/brokers. Here’s what I found and what questions you should ask when searching and evaluating brokers/agents to find someone that’s right for you. 1. Are you a seasoned investor? House flipping doesn’t cut it. Agents/brokers who have invested in the commercial real estate class for the long term know exactly what’s important to you and speak your language. There’s a stark contrast between agents who are experienced investors and agents who are not. If they have never put their names on the line, they don’t understand all the potential risks or the potential rewards from a CRE investment. Agents who are inexperienced investors sound like salesmen and they’re more concerned about the delivery of their message than the substance of it. They talk in generalities, saying things like, “This is a great investment.” “This is a great part of town.” “You’ll never regret buying this property.” The agent who is an experienced investor will be more detailed. They’ll talk about acquisition and disposition cap rates, internal rates of return, CapEx, local job growth, local economic indicators, specific demographics about current and potential tenants, market rents, value-add opportunities, etc. They know what’s important to you because they’ve been there. Agents who have invested in CRE themselves approach their roles as agents more like a business and less like a job. They’ll see their relationship with you as an investment because to them, CRE investors are ideal repeat customers. If an investor finds a gem through an agent who took good care of them on a past deal, they’ll keep going back to that well and keep using that agent and even send referrals their way. The investor agent thinks long-term, the salesman agent is only concerned about closing today’s deal and has no problem burning bridges as long as they make their commission on this property. Keep reading the article here: Subscribe to the BiggerPockets Channel for the best real estate investing education online! Become a member of the BiggerPockets community of real estate investors -

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