Are you talking retail or institutional?

For retail, the days of selling a stock to as many clients as possible are pretty much over. It's way more about financial advisory / planning. Understanding their goals and concerns and matching the right solutions.

Institutional is a completely different animal. Perhaps others with experience can weigh in.

 

I think you're confusing "it's not for me" with "hate."

I could never be an effective and enthusiastic investment sales broker. That doesn't mean other people can't.

Commercial Real Estate Developer
 

I think the comment is more how the rest of the industry looks down their noses a bit at brokers as a necessary evil, not whether they would want to do the job.

For my part brokers for institutional assets are usually ok as they have to exhibit some level of professionalism given their clientele. Where the real bad brokers come in is at the "mom and pop" level in the $2mm - $10mm range where they deal with enough unsophisticated buyers and sellers that you get a wide variance in professionalism and overall likability.

 

Pretty accurate. On the prestige/'looking down their noses' comment though; there are probably more than a few brokers at bottom tier brokerages that make several times what a young guy on the principal side makes. So I'm not sure how much they really care about the prestige part of it. It's not like IB where you have people wet-dreaming over the name on the resume. It's pretty much strictly a numbers game. For some of these guys they would much rather make $500 K at M&M than $300 K at Tishman Speyer (not saying this happens regularly at those 2 firms, just using it as an example).

"Who am I? I'm the guy that does his job. You must be the other guy."
 

I think that’s because many people haven’t experienced the value of a good broker, don’t see a direct correlation between sales and prestige (which is something that becomes less relevant as one matures), and shy away from industries where there isn’t a linear path to success.

“Doesn't really mean shit plebby boi. LMK when you're pulling thiccboi cheques.“ — @m_1
 
Edifice:
don’t see a direct correlation between sales and prestige (which is something that becomes less relevant as one matures)

This is very true. Interesting how younger people tend to stomp all over sales jobs (especially on this forum). But a lot of adults see sales as a really great role because they understand the upside is significant and the value people can provide. This transcends real estate...

 

Sales is sales. Weather it's being a broker, selling insurance, enterprise disaster recovery programs, F100 enterprise computer networks, Community bank financial services platforms, private banking and wealth mgmt, etc. It's all the same. I've done all of those. You simply need to understand their goals and concerns and find suitable solutions. If you like helping people / organizations and are good at it, ask good questions, you will do quite well.

It's funny how younger people concern themselves with prestige. Prestige is subjective. The 25 yr old who is killing it in sales and can buy a nice home, car, etc has plenty of prestige when s/he looks at their checkbook.

In a odd way the tables get turned. The "top students" from "elite schools" go for the straight line jobs in banking and consulting. Do A and get B. Hard to be one of those folks but once you get the job you have a formula. The sales gang actually determine their own success and create revenue for companies from day 1 and get rewarded accordingly (including failing miserably). The good ones do quite well and have a fantastic quality of life unrecognizable to the banking world.

 

About every three to five years I get frustrated with being a broker. Then I change directions a bit and focus on slightly different things within my space and I feel reinvigorated. Then three to five years later I go through another 6mo to a year of WTF...I need a change. Then boom, back to loving it.

There is absolutely zero requirement to be an analyst or have a degree to become a broker. I have no degree. Was never an analyst and I know for a fact none of the successful MF brokers here in town were ever analysts. This is a fairly new thing...the analyst in brokerage. They were normally just called Juniors...

Most of the hate I think that comes from IS is the fact that you can be a nobody like me with no degree or analyst background and do very well if you're ambitious and know what you're doing (not that I always have).

 

That's because so many people in the space do not understand that 90% of the value in IS comes from originating new business and managing relationships. While I was at HFF young guys that busted as for 3-4 years as analysts were getting incensed watching Marcus and Millichap transplants leapfrog them who never had to run a single model or create a legitimate OM. This is because through all the time spent working like a dog, these analysts never had time to network, wine and dine, and establish relationships.

 
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Every single middle of the pack IS broker I worked with (not the big dog MD's pulling in $1m+ per year into their pocket) continuously daydreamed about leaving to the principal side. Cranking out over a thousand pages of pitch material that potential sellers may not even look at, hundreds of pages of OM's including thousands of comments, managing graphic designers and support staff who are not incentivized to put forth the effort without dragging them to the finish line, and dealing with ridiculous seller expectations regarding pricing is enormously frustrating.

Plus, there is this silly complex many brokers have that their forward financial analysis (as if buyers are ignorant enough to buy 5% income growth and 2.5% expense growth) means anything and every single package should be an enormous masterpiece when a 10-15 page flyer would accomplish the same goal. Usually these are the 50 year old+ brokers that have no idea how painstaking of a process it is to sit in InDesign and make hundreds of little tweaks that have no bearing on the sale.

The smartest IS brokers I've found don't make the most money, but make good money ($300-500k per year or so) by closing 2-3 deals per year with solid clients that are easy to work with. These guys spend a 1/3+ of the year out of the office and usually retain their execution team by treating them well to avoid turnover.

 

It’s really crazy to think how much money a broker out of college can make working for a reputable mom and pop brokerage.

I know a broker who can’t even tell you what a cap rate is. But he is faking it until he “makes it” and is on path to make 300k+. This is the only business where such a prolific amount of money can be attained at such a young age, without a top-tier education, and not many hours spent working in the office.

 

It’s funny how the principal side shits on brokers all the time, yet rings their phones off the hook to get deal flow in acquisitions. I’ve been on both sides of the business. I ultimately left investment sales and went into acquisitions Because I liked being close to the money, as I plan to continue to buy properties over time. It’s the best in terms of passive income and cash flow. I didn’t leave because I hated investment sales or couldn’t cut it. Point is, I have great respect for great brokers. It can be a thankless job and the principal side often doesn’t respect their jobs, even though brokers work very hard.

 

I have a ton of respect of the investment sales community as well. Sometimes the D team guys can be a bit grating with their personalities (M&M, etc), but the HFF, Eastdil, CBRE national partners, etc are very high quality shops with very smart people. Frankly, investment sales and acquisitions are just different sides of the same coin. In acquisitions, you aren’t paid the big bucks to sit at your desk waiting to sign a CA for a marketed deal, you’re paid money to build relationships that lead to a steady flow of off-market deals. That 100% requires just as much salesmanship as the investment sales guys.

 

I've thoroughly enjoyed brokerage more than any job I've ever had. I'm a trained attorney and I have to say that brokering strip centers and apartment buildings is much more fun than sitting at a damn desk all day doing research and writing boring bullshit. It's fun to negotiate deals over the phone and talk with intelligent (some not so much) investors all day. Look, we're not saving the fu@king manatees here but the commissions have provided me with the means to donate and help others along the way.

This career path allows me to work from home in a t-shirt and shorts while wearing a headset and drinking my coffee while I'm walking along the beach. Just don't get me wrong, it's been a grind and sometimes I work 14 hour days and on the weekends but being an Investment sales broker has opened me up to the minds of some very successful people. From personal clients I've learned about the diamond business, construction, the movie industry, various religions, and various cultures.

 

I'll say it because no one else will....

Investment sales sucks. You are on phones all day begging people to sell their asset. People can dress it up as "providing a service" but when you make zero dollars for 6+ months shit gets real. The only goal is getting a check. Brokers own nothing. They control nothing. The only rush is knowing you can pay your bills for the next year and that you can maybe lease a car. No one outside of RE looks at a broker and says "look how he's impacted so many people". At most, your client will take you out to dinner, and the next morning will ask you to find a new deal. It's incredibly unfulfilling.

I've seen C-student bros make 100k in a year, and smart, hard working kids who make 300 calls a week make nothing. A lot of it is right place, right time. That is too much variability to build a career on (unless you commit 2+ years of very low pay...like $0 dollars pay). Moreover, even if you made 300k last year, you are only as good as your last deal. No one is retiring on 300K and there's a possibility the next year that you can make half of that. Sure, being in a salaried role isn't any more "secure" but at least you can rely on a check coming every two weeks and budget your salary accordingly. Not to mention, its harder to get loans working commission only.

And the whole "this is the only job you can make 200K in your 20's with no degree" is a croc of shit. That's like 1 out of every 100 kids that pulls it off, and they only do so through family connections (whether they disclose it to you or not). Anyone who has millions of dollars in multiple assets wouldn't trust them to a 20 year old.

I'm sorry to be so doom and gloom, because IS is a great way to get your foot in the door, learn the business, and make connections. Also, the work environment is typically very relaxed and colleagues are cool.

But IS is a stepping stone. Either you get out or you pigeonhole yourself and you get stuck. I know Senior VPs at CBRE that make decent living (mind you,they are the ones that "made" it)---but I can tell you that 99% are not driving a Ferrari to the office (or have one at home). Feel free to give me monkey shit, but after 5 years at the "#1" brokerage I am hoping kids aren't disillusioned as to what they are getting into.

 

Some people might think $100K/yr at 27 is making it, some might not. From 22-27 I grinded my way up and was able to leverage my work ethic to work on better teams as I went along.I would say I was ahead of most guys my age (considering people who don't produce get kicked out of the company after 3 years). By metric standards I was "making it".

But looking at myself in the mirror, I wasn't. The idea of cold calling at age 30 wasn't my idea of success. What value do you create as a middle man? You don't--you only facilitate value. Once a deal was done, it's done. You get a voucher and get told to "do more deals". The only cool part of closing a deal is figuring out how to save the money. It's not like the world celebrates your accomplishment. You are just another guy in the office. Maybe you go on a nicer vacation for two weeks...but when you look back on your career, the only thing you have to show for it is an anecdote about some other guy's asset---an asset that he's making money on and you're not. That's not "making it" in my book.

At 30 I wanted to add more to a conversation than just "market comps". However, if all you want is a check then it's fine--I'd rather do brokerage than work at some advertising firm. Again, I don't think brokerage is bad, but there are more fulfilling roles people can aspire to.

 

I somewhat agree to this but I 1,000% agree that 1/100 kids can kill it. 

I for one started as a broker as I met 2 boomer brokers with billion dollar connections. Luckily they let me join them. I brought in 2 off-market deals at 1.25% commission (I took 33% of that). Made $1.1M in my 3 yrs in the business at a under 24yr old. Then used that capital to start a fully-fledged team. Now I make 2X that. I personally don't like brokering. I plan on leaving it soon and going into acquisitions. 

The real money is in owning a business. Sure you can kill it at CBRE but the internal politics there is insane. I agree that Brokerage is a stepping stone but to make a a lot of $$ you need to create an actual business. Also Luck plays a big role. 
 

Edit: I'd also like to add that I started other businesses while brokering. I tried to get into the hedge fund space but it was short lived. Tried to create a prop-tech firm but it was also short lived. I also created a Lower mid-market RE development firm (on going  & well). and i also invested as an LP in various small businesses as a PE Investor in the Low mid-market area.  
I didn't get a job or internship at PE shops or I banks because I had a 3.3 GPA from a non-target. Although I may get a MS or MBA from a top 10 school in near future - Not sure yet. I believe luck was a big part of my life and I was a smart business person, not so much a hard worker though. 

 

It's RE, everyone hates everyone. It's tangible investing, there is no hiding from success or failure - drives the entire sector mad.

I'm in IS, and i hate tenant reps. Partly because they make my life difficult and i have to work in BS leasing fees into models, but probably more so because they're the only people making comparable fees. Bottom line - we both make the wheel go round.

I've heard the "i hate brokers" bs from everyone except people I respect in the industry. Thankfully I'm in the institutional world, so I don't have to deal with like others. Bottom line - if you truly think you could walk up to a Harmon/Spies or Fraker/Longo type team and tell them they bring nothing to the table... good for you. Hopefully the housing market stays propped for your next flip...

 

Good brokers can add a lot of value. That being said, you might see a lot of young brokers reeling it in. Question is, is it sustainable? I think one of the most overlooked things in this forum is what you are learning on the job. Money is for sure very important, but what's more important is the upside and if your job can "teach you how to fish".

 

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