What You Should Never Tell Your Real Estate Broker
“Without a sense of urgency, desire loses its value.” — Jim Rohn
One of the things to keep in mind is that a good commercial real estate broker is a goldmine for great apartment and commercial property listings. Not only can a good one get more product in front of you but they can also save you a lot of time by doing all of the heavy lifting to get an opportunity in front of you.
One of the things I recommend to a lot of people is to not only do things on their own but get hooked up with a good commercial real estate broker too. It is very smart to do so… A good one can make you a lot of money…
So one of the questions is, “How do I get a good relationship going with a commercial broker?”
First, let me tell you what you do not do:
“I want to buy a property with No Money Down.”
This is the surest way to get zero cooperation. Why? Remember, brokers get paid on commissions. With many no money down deals brokers equate no money with no money left for commissions. Not only that, they also equate you with running off half cocked after watching the late night infomercial.
What should you say?
Well, the best way to get good deals across your desk is to be very specific about what you want. Stating that you are looking for a great deal that has a great cash flow and return is not enough.
Also, you do not want to be too sky high here either. Saying you want $15,000 a month in cash flow from a 4 unit property is probably going to turn brokers off to you, as well.
So, back to should you be specific about?
1. Type and size of property you want.
2. Age of property.
5. Cash Flow (Cap Rate) OR Cash on Cash Return.
6. How You Will Purchase the Property..
“I am looking for an 8-12 unit property that is preferably less than 20 years old in average to above average condition. It has to be in a location that is close to shopping, retail, and major roadways and I would prefer a 12% cash on cash return but will look at others that get close to this. Also, I have the 20-25% down payment necessary to get this done. Of course, if the owner is willing to do any financing I have an interest in that as well.”
That is about it. Of course, you may get other questions about what you want, your time frame to purchase, etc. BUT they will all mostly fall along these lines.
Make sure the broker keeps you up to date on a basis that you prefer but be realistic here too. I prefer email as it is easier to get a lot done at once vs. using the phone.