Giving Constructive Feeback to Broker
Hey WSO first post here,
Currently in Montreal, and focusing on value-add apartment acquisitions. Wondering how you would give constructive feedback to a broker when a deal he sends you is too expensive without using complicated CRE lingo and on the other hand without being a pain in the ass and just saying 'it's much $'.
Does that make sense? Thanks
Honestly, a brokers' job is to market property, so they email everything to everyone. If they have some 'preference' item that screens on criteria you could ask to be adjusted, but generally, i would just ignore/delete the stuff you are not interested in. If they ask for feedback, then just say this above our price range, etc.
Either ignore it, unsubscribe from the mailing list, or call the broker and ask for what you’re actually looking for. Those email blasts aren’t customized in any way.
just tell them you can't meet your levered ROE expectations or ignore. if you constantly ignore, they will stop showing you deals because they also want feedback so play the game with them or say your investment committee said the deal is a no go. i sometimes underwrite using broker assumptions and tell them a price they want to hear but blame it on the IC to build a relationship with the broker. on the private capital side, it's mainly cowboy brokers who sell based on emotion vs institutional brokers. private capital brokers are always looking for the next 1031 buyer, usually the 1031 buyers are happy to overpay so they can avoid paying taxes...they think they are screwing the tax man but they are screwing themselves. majority of deals the last 2 years have been overpriced... even during covid, you are seeing precovid pricing despite lower leverage, slower growth, etc to get value based on today's assumptions. pricing is down 10 - 20% but most folks will tell you it's down 5%.
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