I'm four years out of school, making plus or minus $150K in South Florida and have worked at some great shops, including a top shop in the country. I have a good work life balance, pretty steady bonuses, benefits, blah blah, and like what I do and am generally happy. However, I have friends in Brokerage that work longish hours (not REPE or IB) that aren't at there desk often, can do remote work whenever, not 200 IQ geniuses, and literally making many $100Ks (one friend $450K last year and on track for $600K+ this year). In no cocky way, I am 100% certain I know more about CRE then these guys, how to UW deals, and I've been told I'm a people person. Besides literally starting from nothing financially (unless I can get a small base salary to pay for basics), why wouldn't myself (and most others) do Brokerage?? Nothing else is as entrepreneurial.
It seems like if they crush it and grind, they make more money then any associate or whatnot at some mega fund, but don't get treated like dirt and can work there own hours, don't have to sit in office, etc.
Please tell me what I am missing?
Tons of reasons. Working on commissions is a different lifestyle and is wildly unpredictable. You friends may make $450k one year and $4k the next for reasons entirely outside of their control. Brokerage also means you’re fully in the service/consulting industry and that is also quite different from being on the principal side of the business.
All that said, if you think you’d crush it, why not do it? People that have the personality for brokerage absolutely can make a killing at it.
I ask myself that question a lot, and I my excuses are I like "steady eddy", guaranteed money, the ability to be part of a firm that's doing cool stuff, etc., but I know deep down it truly is my personality and I would excel at it. So I am torn deeply.
I work as a financial analyst at a brokerage and some of the brokers I work with are like your friends - making 450k, 600k+. I'm in a similar boat to you, I'm seriously considering getting my license and trying the brokerage route.
Out of curiosity, what niche would you want to do in brokerage?
Excited for Ozymandia to jump on this one.
The skill set that makes a good associate/analyst is very different than the skills that make a good broker. Being a good broker is 99% a sales job and being good with people does not always equate to monetizing those relationships. You really need a certain level of persistence and shameless audacity to make it in brokerage. This is also an industry that can have a really long sales cycle. I’ve seen situations where it takes 5+ years between making an introduction and that actually resulting in a payday for the broker (these were 7 figure commission checks in all cases) but you really need to be constantly hustling at all times with no certainty of a payday in the short or intermediate term.
If you’re good at sourcing, analyzing, and executing deals but also think you have what it takes to be a successful broker, I’d rather apply that sales skill set to starting or becoming a partner at a REPE fund or development shop. Being good at fundraising is a way to get your name on the door much quicker than being good at Excel.
I've asked myself the same thing at times, but at the end of the day I just can't imagine myself being happy having to give tours of the same building 50 - 100 times and having to give a pitch for every building to 30+ groups that I know aren't going to make a real run at it and are just kicking tires
My observation on brokerage has always been it’s great to be at the top- however there’s only so many spots. Competitive to get there and stay there. For instance there’s really only 10ish or so guys running like 4-5 top teams in commercial in my market.
So if you’re a killer who can get there you’d probably have a great career on principal side as well. Just comes down to a matter of matching your skillset to job and preference. IMO.
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