Today, Kevin Bupp provides a strategy to build a relationship with a broker, including showing them that you’ve done your research on the property and that you’re in need of representation.
After securing a broker to work with, you can show your worth by bringing deals to the broker and in turn, they might be able to provide you with off market deals.
Mike: Welcome back to the FlipNerd.com REI classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Kevin: Hey, guys. Kevin Bopp here from TheMobileHomeParkAcademy.com and the Real Estate Investing for Cash Flow podcast. Today, I’ll be your host of the REI Classroom tip. And in today’s show, I’m going to share with you a little strategy on how to create your own commercial pocket listings and eliminate your competition.
Mike: This show was sponsored by PassiveRental.com.
Kevin: So one of the most difficult things when just getting started as a commercial real estate investor is finding quality deals. Most people will tell you that you have to create broker relationships because brokers have a direct line to the property owners. Well, that’s kind of true, but there lies a problem when you’re brand new to the business and you have little to no track record, and you’re trying to build relationships with brokers who have access to high-quality commercial deals, they’re the ones you want, the pocket listings.
The problem is that brokers only get paid when deals close. And being that you’re new and not proven, why would they ever waste their time bringing you an off-market deal when they have a handful of other more qualified buyers who they know can close, right? They want money in their pocket. So it just makes sense, I mean, if I was a broker, I’d probably do the same thing. Well, we figured out a way to skirt around the good-old-boy system and create our own pocket listings.
And here’s how we do it. You’re going to do your own research and make a list of every building or property that fit your acquisition criteria, including the property type, the size, the owner’s contact information, basically everything you can get. Put it on a spreadsheet about the property that you’re looking or that you’d like to buy. And this is assuming that you’ve already determined the type of property that you’re looking for and that you know what markets you like to buy within.
So let’s say that you want to buy apartment buildings in St. Louis, Missouri. You’re going to research every apartment building that fits your size criteria in St. Louis, Missouri and make a spreadsheet of it. And if there are other markets you like to buy within, you’re going to do the same exact thing, okay. So make a list of every property, all the details on it, contact information for the owners, so on and so forth.
Next, what you’re going to do is you going to do some research on your own and find local brokers within the market where you would like to buy. So let’s say St. Louis, let’s use that as an example. You going to do your research, find brokers in St. Louis market by going to sites like [inaudible 0:02:22], CCIM.com, and there’s, I think, CoStar probably a good one as well, but there are a bunch of basically commercial real estate directories out there. And what you want is you want someone who has deep roots within that market, but isn’t necessarily the big dog of the area. So you don’t want like the newbie commercial real estate broker, but you also don’t want the big dog, that’s not going to give you the time of day. You want that middle-level guy, the guy that is an everyday broker who’s pretty much engrained in that marketplace and he’s always hungry for the next deal and will work hard for you, being that you’re his client. Or her client. It could be a guy or a girl.
So once you find this person, you’re going to reach out to them and explain who you are and that your objective is to purchase a particular building within his or her market, and that you’re looking for representation. And let this broker know that you’ve already done all the heavy lifting for them with regards to tracking down all the property info and owner’s contact information because remember that’s their job. Normally, they have to do all that research themselves, which is very tedious, but you’re doing that all for them.
So you’ve already tracked down all the information. You know the properties that you would potentially like to buy. You’ve got the contact information for the owners. So be sure to also inform them that you are a long-term buyer and that you like to forge a long-term relationship and you’re looking for a broker who can work these leads on your behalf. And by doing this, what you’ve just done is you’ve handed the broker a very warm lead and told him that there’s a commission check waiting for him if he could pull together a deal for you.
Well, the goal of this program is to find a dedicated broker within each of these markets that you like, and provide that broker with a detailed list of all the properties that meet your acquisition criteria, and have them work on your behalf to assemble this deal. And this method will allow you to have a dedicated team of brokers working on your behalf to farm off-market leads for you and only you. This, my fellow real estate investors, is how you create your own commercial pocket listings.
And that’s all I have for today’s REI classroom tip. I want to thank you for listening and being a part of our great community here. And until we meet again next time, get out there, take massive action and make some cash flow happen.
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