How much do you pay your brokers / bird dogs for deals?

Based on the most helpful WSO content, here's what you need to know about broker compensation:

1. Commission Rates:

   • Deal Size and Commission:
     • $0-15M: 2.5-3%
     • $15-50M: 1.5-2.5%
     • $50-100M: 0.75-1.5%
     • $100M+: 30-75 bps (0.30-0.75%)

2. Brokerage Shop Split:

   • The brokerage shop typically keeps 30-50% of the commission.
   • The remaining amount is divided among the brokerage team(s) based on pre-negotiated splits.

3. Broker Compensation Variability:

   • Compensation can vary widely based on market conditions and individual performance.
   • Some brokers make $0, while others can earn multiple seven figures.

4. Additional Fees:

   • Mortgage broker fees for large deals (e.g., $100MM+ loans) are typically in the 25-35 bps range.
   • Debt brokers may have to give a certain percentage of their fee to the brokerage shop, ranging from 10% to 50%.

5. Retainer Fees and Carry:

   • Some sponsors pay bird dogs a weekly or monthly retainer fee on top of any fees.
   • It's also possible to pay a broker fee at closing and a percentage of the carry, depending on the deal's IRR at the time of refinancing or sale.

6. Example:

   • A 1% fee on a $40MM deal with an additional 2-4% of the carry, depending on the IRR at the time of refinancing or sale.

This information should give you a comprehensive view of broker compensation structures and practices.

Sources: Let's Talk About Broker Compensation, BROKERS: What Is Your Compensation In Real Estate?, To all the commercial real estate brokers out there...how much money do you make?, Commercial Real Estate Broker Compensation, Commission Schedules - What have you been seeing?