You call commercial real estate brokers in your market, tell them about what you’re looking for, and meet with a few. It feels like you’re making progress. The word is on the street, you’re looking to buy a commercial real estate investment property with great cash flows, upside potential, and at distressed prices. Every commercial real estate broker knows. You wait by the phone and check your email for the wealth building deals to roll in.
Here they come….the emails you’ve been waiting for. You open them. You see a pattern. These commercial property listings are all the same. You chock it up to the fact that you contacted the commercial real estate brokers at the same time and they’re sending you what’s available on the market. A few weeks go by, and the investment property sales lists dwindle and no agents are calling. What happened?
You’re every commercial broker’s business and no broker’s responsibility.
Rewind a few weeks. You’re a commercial real estate broker. You receive a phone call from an investor who’s looking for a good deal in your market. He wants you to send him a good investment property to buy, so keep your eyes open and start hunting. You want a commission right?
Well, sure. But here’s the catch. You get at least one phone call like that every day. You’re asked to find a good deal for this investor, maybe go hunting for him, and start sending him listings. He’s probably not a hot horse who’s going to buy a property off the first list you send him and he’s likely having the same conversation with other investment property brokers in your market.
He’s everyone’s business and no one’s responsibility.
You add him to your database. Maybe you put him in your email distribution list and figure that something might happen, but if not, you may get a call one day when he has a property he needs to lease or sell is commercial property.
After a few weeks, you stop sending him lists of investment properties for sale because you’ve also been asked by 15-20 other investors in the same period of time to do the same activity. Somehow, they think you’re out there working for them, too, because they’re getting the same listings as everyone else. What they don’t know is that no commercial broker’s out there hunting, they’re just entering a search and clicking the send button.
You’ve been selling investment properties long enough to know that most of these calls are a fool’s errand. The promise of a commission looms on the horizon, but you know you’re going to have to spend more in time and resources to maybe get that commission than you’ll likely earn, plus you have no commitment from any one investor that they’ll honor your commission if you bring them a commercial real estate investment opportunity. Pretty risky if you’re a broker. You decide you’re better served investing in those who have hired you to help them acquire and dispose of investment property.
Ultimately, as an investor, ask yourself, when you repeat the same behaviors as everyone else by calling a bunch of brokers to tell them what you want, should you expect an outcome that’s different than everyone else who’s doing the same?
The next time you’re on the phone with a commercial broker, try asking him how many calls he’s had from investors “looking for a good deal” in the last 30 days. Then ask him how many of those investors he’s spoken to after the initial conversation. Chances are you already know the answer.
To get different results than everyone else, change your approach. Ask your investment property brokers how many investors they’re representing. The ones who have clients are getting deals done, while the ones who aren’t….well, just check your email box for the latest commercial property listings.
By taking a different approach and employing an investment property broker to execute a search and acquisition on your behalf, you may be delighted that when you become someone’s responsibility, you’re everyone’s envy.
About the Author: Jeremy Cyrier, CCIM is the founder/principal of MANSARD Commercial Properties and member of the CCIM Institute faculty. He delivers thoughtful, large scale commercial real estate solutions to the individual challenges owners and tenants face. Jeremy Cyrier, CCIM was elected by Banker & Tradesman as one of its New Leaders in 2009. You may reach Jeremy at Jeremy@Mansardcre.com.