Many of you may make the mistake of calling a broker, explaining what you’re looking for, and waiting for the opportunities to start rolling in. You want to buy investment property and the broker wants to make a commission, right? Yes. You’re right. But you’re also wrong.
Imagine calling a law firm and explaining your case to an attorney, asking him to appear in court on a given day, without signing a retainer agreement and never handing over a check to engage his services. What are the odds that he’s going to show up?
That’s why it doesn’t surprise me when people complain about useless real estate brokers. They’re frustrated when they’ve asked someone to do something for them, only they’ve made no commitment and no agreement to pay them for their investment in your interests.
Brokers work for people that have signed an agreement with them to provide them with services. Most of the time, this means that they are working with owners of investment properties to either keep them at 100% occupancy, help them sell, and help them buy. These owners have hired them to perform a set of duties and services for an agreed upon fee.
How to Convince Brokers Not to Help You
You’ll find great difficulty in recruiting brokers to your cause if you speak to them in boot camp and vague investment jargon. Take Bob for example. Bob calls on ABC Brokerage. Bob says, “Hi, I’m looking for a deal that makes sense. Preferably, I’d like a distressed asset, you know, one where the seller has to sell! If you see anything, could you send it to me? Oh, and by the way, I’m also searching for properties in emerging markets, do you have any of those?”
What the Broker Hears
“Hi, I don’t know what I’m looking for but want to make some money. But who doesn’t, right? I know you probably represent a lot of owners, so if you could violate your fiduciary obligation to represent your client and tell me which one might be going through some personal and financial problems, I’d appreciate it. Oh, and by the way, I’m looking for something in an emerging market because I’ve heard that’s a good place to look. Who talks about my local market as emerging, anyway? Would you be willing to waste your time on me?”
When you’re looking for a broker to work with you in finding a deal, you need to know who you’re looking for. You have to learn to speak their secret language to unlock their vast network of resources, market knowledge, relationships, and insights into where the deals are going to be in your market.
As the owner of a commercial real estate brokerage company, I hear my brokers having these conversations every day. That’s why I wrote a module in my new course to help many of you build a story that sells because you should have brokers asking to meet with you, introducing you to deals you didn’t know exist, and helping you fill your buildings with tenants they have in the market.
By the way, where should we send your free 10 part email mini course? It’s 100% commercial real estate investing focused and you can get it here.