Q&A:Investment Sales Broker

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Currently been working as an investment sales broker for four years specializing in multifamily, mixed-use, and development sites in the 1-30 million space in NYC. Go ahead, fire away. Oh, and if it counts for anything, I worked for three years at a prop trading desk in Chicago.

Comments (28)

 
Feb 29, 2016 - 3:21pm

hey, just found this, are you able to still answer questions? if so reply back (or pm me) and ill post to frontpage

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Feb 29, 2016 - 4:53pm

I work in investment sales in SF. Focus between $2-30MM, Multi-Family/Development sites with some retail thrown in. Feel free to ask questions.

Personally for me cold calling varies. But it is just me and a Sr Broker. He doesn't cold call. I've picked a few neighborhoods of focus. Try to get 250 calls out a week.

 
Best Response
Feb 29, 2016 - 8:03pm

This is for any investment sales broker out there - apologies in advance for sounding like an arrogant dbag. We are at a point in the cycle where I don't bother looking at any deal from a brand name house (unless it's HFF) - I'm currently working with local, small time hungry animals because typically their is fat still left on their deals. With that being said I don't know which bucket the OP and guy above me fall under. Here is my question...

I get a ton of calls from a bunch of little cocky bros from the brand named brokerages thinking they are Stephen Ross because they've been able to sell real estate in an unprecedented CRE bull market to a Chinese investor who thinks St. Nicholas Ave is the next Tribeca. After I politely decline to inquire more about their shitty overpriced deal that the whole city has already seen before it hit the market, they then proceed to tell me that I'm not looking at the deal the right way. The salesman who's 6 months out of college and has never allocated capital or executed on a deal in his life is telling me how to invest our firm's capital. F*CK ME I'm doing it wrong.

Okay theres no question. But please - all aspiring investment sales brokers try to understand your clients' needs. Figure out a way to add value. Understand their acquisition criteria. Don't cold call prospective buyers and tell them how to look at the deal they don't want to see because it's garbage - you will do absolutely nothing to change their minds.

Good luck guys. Would love to see another AMA when the music stops.

 
Feb 29, 2016 - 11:52pm

Haha well it sounds like Marcus & Millichap has been calling you. Do they even bother to ask something, like what do you look for in a deal? A lot of them can't seem to look at the big picture. You need to build relationships and understanding of clients needs. That may mean it takes 3 years to to find them a deal or getting them to list.

On the 20 million question, there are a ton of variables, My Senior Broker is actually a good guy and doesn't try to screw me out of money. If I brought in the buyer/seller, I'd assume I'd keep 70% and he'd take 30%. If he brings it in, I take nothing. I am on a 70/30 split with the house. My brokerage isn't big in my city, and the office has next to no support for us, so they are pretty generous.

 
Mar 1, 2016 - 2:43pm

Just a heads up for anyone getting into investment sales in the price range I work in. You are going to be dealing with a lot of people who inherited buildings, and know little about the market, and often times about running a building for that. Just had one call, who based their value off Zillow. Which said her apartment was a condo, decided to renovate her vacant unit and get higher price on sale. Let's just say zillow was off by more than a million.

With people like these, spend more time talking about the market, show them proof, and what trends are going on. Try not to make them feel stupid. This will give you a leg up on a lot of brokers who just push for the sale. Oh, and they are almost always more frustrating to deal with in all aspects. IE, want to bring down commission and unrealistic on price, so be prepared.

 
Dec 21, 2016 - 3:41pm

Mn130:

I'm a a 1 year multifamily IS broker at a big shop focusing on 1-20mm. At a crossroads and thinking I'm moving on from MF to retail where I assume the investors are more sophisticated? Any advice? Something about multifamily I just don't like.

Sounds like you are at M&M. What kind of retail? Like the nationwide NNN guys? It's really only going to get more "sophisticated" if you are dealing more with REITs, or equity firm types in Retail.

 
Mar 2, 2016 - 5:30pm

Capratecompression nailed my "question" (read: rant) on the head. But in all seriousness, how experienced are your analysts that put together the OM's? I would safely say at least 40% of the OM's I receive are highly inflated (purposely or not) through unrealistic market rents with no comps, expenses so low I wonder how the asset is still standing, and a price expectation that would make someone in high school understand why the market tanked.

Is it owner managed dodgy bookkeeping? Trying to break records in your area? Smoking the good stuff and not sharing?

 
Mar 2, 2016 - 6:52pm

You 100% prove my point by comparing an IS OM to Miller Lite....

I would need to underwrite regardless of how accurate the information is. Everyone has different expense assumptions, splits, prefs, and overall structures. I don't expect the OM to tell me what my 5 year COC is, but when I open it up it would be nice to see more than "EXTREME UPSIDE POTENTIAL!!!!" plastered from head to toe.

 
Mar 6, 2016 - 9:47pm

Really depends on the shop and the way the team is set up. If the junior sources the deal they will get more than if the senior broker brings them onto the deal. I know teams where it was anywhere from 15%-40% depending on who brought the deal in and how many guys were working on it.

 
Feb 8, 2017 - 6:37am

I'd be interested in how you protect your rep. i.e. have you ever refused to deal with a buyer/seller because of their unrealistic expectations? There seem to be a lot of brokers out there with the attitude of "throw as much shit to the wall and see what sticks" - Personally, I would rather get one phone call from a reputable broker every 3 months about a deal he knows would work for me, than 100 phone calls from idiots every day who don't understand how crazy inflated their asking price is.

"Average people have great ideas. Legends have great execution"
 
Feb 8, 2017 - 10:13am
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