What it is like to be commercial real estate agent?
I have been doing residential real estate for 7 years. I would like to learn and do commercial too. I have people asked if I do commercial. Figured there are fewer agents doing commercial than residential.
What is it like? Is it competitive? Is it overwhelming? Has anyone made the switched and regretted? Or regretted not adding commercial business sooner?
[{"id": "fi1gjjv", "text": "Every market is different. What city are you in?", "replies": [{"id": "fi1r9bw", "text": "Irvine. Very business city alot of office buildings", "replies": [{"id": "fi1uj5s", "text": "HA, good luck trying to get on the landlord side, Irvine Company owns everything. \n\nSo that would make you an office tenant rep. You represent the tenant and work with them to get the best deal possible. \n\nYou would need to learn the market, so you would need to learn the name and address of every office building, who owns it, who the major tenants are, when their leases expire and who reps the tenants on the leases, what the industry of the tenants are in, are those industries growing or shrinking, are they having a hard time attracting employees, do they need special building security, what are their IT needs like, how many private offices do they need, do they need guest parking, ect ect. \n\nI would talk to a managing director at one of the firms to feel it out. They can size you up and see if they can put you as a junior broker on one of the leasing teams. They will then show you the ropes and then you will pound the phones. \n\nDid you think you would do this as a side business, trying to lease retail strip centers for people you met at church or something or are you thinking of doing a serious career move? \n\nThe comission is about 3% of the total lease consideration, minus about 50% kicked back to the company. \n\nSo if you do a 1,500 SF lease at $3 a foot for 5 years, that is a total consideration of 270K, $8K comission your take home is $4K, minus taxes you get $2K. You will need to do one of these every week for a year. \n\nThese small deals you can probably start doing right out the gate after a couple months of cold calling and renewals. \n\nOr you can do a 30K lease for 10 years for 10.8 million consideration, 162K into your pocket, but you may do one of these every two years. \n\nIt takes about 5 years of small deals to start making the real money. Then all the deals you did 5 years ago roll over for renewals and you can get paid on those. Then the big deals you did 10 years ago rolls over and you get paid on that as well. \n\nSo most people wash out before they hit 5 years, but the ones that stick it out and have been in the business for 30 years can make 1 million a year and never make a single cold call, it is just the hard work you did 20 years ago is paying off, forever, until you die or get lazy and forget to call someone when they are going to renew. \n\nSo if you are thinking of jumping in and cannot risk 5 years of your life on what is a very promising career, stay out. You will be better for it. \n\nIf you think you can learn everything there is about office buildings, about office tenants and about the economy of Orange County and you have the drive to call people and walk buildings for the next 5-10 years, then yes. \n\nIt also helps if you already come with a network of business contacts / school buddies and have very good networking skills.", "replies": [{"id": "fi26yqf", "text": "This is 100% correct. I'm a broker and next time someone asks me this I'm just going to show this thread.", "replies": [], "depth": 4}, {"id": "fi2r7h7", "text": "Thanks. I appreciate your taking the time to write this.", "replies": [{"id": "fi43vuh", "text": "I went to UCI and work out of Pasadena now. Irvine is a great market. What this guy is writing is true. Most successful commercial agents that I know are some of the hardest working people I know. They also come from family backgrounds that allowed them to make 0 income for 2-3 years.  If  you are successful, there is a lot of invisible growth for those 2-3 years. Then bam! overnight success and you start closing 10-15 million. Then if you keep up with the cold calling, mailing campaigns, and networking, BAM! you start closing huge deals and have 40-50 million in volume.\n\n\nBut commercial is brutal in the beginning. Leads take a long time to become friends, friends take a long time to become clients, And deals take a long time to close.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fi1hx9z", "text": "What do you mean when you say commercial? The overwhelming majority of \u201ccommercial\u201d brokers are product specialists in either office, retail, industrial, land or cap markets. Each is unique and just as differs greatly from one another. The difference between cap. Markets and industrial for example is about the same as the difference between residential and industrial for example.", "replies": [{"id": "fi1rhxb", "text": "I am more interested in buy and sell office buildings and industrial warehouses. It looks more lucrative in these two markets.", "replies": [{"id": "fi1rxot", "text": "Those are still two very different product types. Most folks pick one or the other, also, the majority of your income will be from leasing instead of sales.\n\nAlso, in office you wil need to pick either tenant or landlord rep.\n\nI would encourage you to do informational interviews with high producing brokers in each category to get a sense of what\u2019s involved. Also network.", "replies": [{"id": "fi1scae", "text": "Good point. I am planning to ask an agent for lunch to pick his brain. Thanks.", "replies": [{"id": "fi1uuoe", "text": "I would go onto the websites for JLL, CBRE, C&amp;W &amp; Colliers and cold call anybody with a Director or above title and offer to buy them a cup of coffee.\n\nIf you want to take it one step further go with the managing principle for each office, they will have a good idea as to who is looking to hire a jr team member etc.", "replies": [], "depth": 5}], "depth": 4}, {"id": "fi2fu06", "text": "Yes and no. Office and industrial often have a lot of gray area. This is considered corporate services, especially for leasing. In commercial the vertices are often who the person you're likely to be representing are. The size of the project is also very relevant in this space.", "replies": [{"id": "fi2pfaq", "text": "This is right depending on the size of the market. Teams generally specialize in bigger markets and are gerneralists in smaller ones.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fi1i5v7", "text": "It is substantially more complex, there are probably fewer agents but their level of service, experience and sophistication are often much higher. Deal times are also much longer, often years.", "replies": [{"id": "fi1mbfv", "text": "&gt;often\n\nand often I wonder how they fumbled their way into the job", "replies": [{"id": "fi1zmo4", "text": "That\u2019s why I qualified it. Sadly not \u201call\u201d", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fi1jawy", "text": "completely different beast.   \nits the difference between a used car salesman and selling maseratis for example.  you're dealing with very different kind of people.  sophisticated business owners, landlords, lots of type a personalities", "replies": [{"id": "fi1rou1", "text": "Make sense. Since these are sophisticated business owners, I guess it is more about the numbers?", "replies": [{"id": "fi1v51s", "text": "you're dealing with different kinds of people.  that's the bottom line.  and yes the numbers are much higher", "replies": [{"id": "fi2ppn9", "text": "I\u2019d say they can be much higher. For resi they say 5% of agents make 95% of the money because there are so many part-timers with a license. Commerical is not nearly as lopsided but you can definitely make money in residential.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fi27h9f", "text": "Grind for a year full time (won't be able to do residential, too), make no money. Keep it up, year 2, maybe make a little money. Year 3 keep grinding, hopefully make good money or at least a livable income.\n\nConstantly have people hanging up on you, lying to you, overvaluing their properties by a significant margin then get mad (and hang up on you) when you tell them the real worth. But eventually you will find someone who wants to sell and then after all your hard work and the optimism you feel about almost finally making money, the deal will fall apart. Then you're back to square one.\n\nSound like fun? Now repeat this times 3 and you'll finally actually close a deal. And then it will start to get easier and easier.", "replies": [{"id": "fi292df", "text": "This", "replies": [], "depth": 2}, {"id": "fi29izd", "text": "Perfect Description. I\u2019m on year five - it gets better if you don\u2019t give up, have thick skin, and can live for long periods without a paycheck.", "replies": [{"id": "fi29lz3", "text": "&gt; can live for long periods without a paycheck.\n\nLol would be nice", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fi28j3y", "text": "You regret not starting commercial earlier. You can\u2019t balance both and do your clients any service.  They\u2019re both full time jobs.  Pick one.", "replies": [], "depth": 1}, {"id": "fi2cd2y", "text": "Do you enjoy getting kicked in the nuts?", "replies": [], "depth": 1}, {"id": "fi2gkv2", "text": "I didn't real all these comments but let me just say a couple of things. You have a bit of an uphill battle. Commercial and residential are very, very different. You're not interested in going from residential to something similar but bigger. It's a whole new business, a whole new profession. You'd be starting over from scratch. The only advantage being in residential will get you is that you already have your license. If you're in a market that isn't a tiny tertiary market you won't be able to do both. Every time I see a residential agent trying to transact in commercial I cringe a bit. I know that the client isn't getting competent representation and that my job will be harder than if the client wasn't represented at all. I can't count the number of times a residential agent killed an otherwise viable deal. It just happened to me last week. What I'm saying is coming from residential will already be a little bit of a tainted past and trying to do both will be worse. You'll end up working on shitty deals if anything at all. You need to do your research and make a choice to be 100% in one or the other.", "replies": [{"id": "fi3j3go", "text": "THIS! You cant do both. I have unfortunately had residential brokers \"representing\" landlords absolutely kill deals. They don't understand standard lease terms &amp; market concessions the way your typical commercial broker does. An absolute disservice to the client they are trying to represent. Becoming a market specialist is going to make you successful as apposed to a jack of all trades, master of none.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fi2mjlj", "text": "I was a successful residential agent for 3 years - I have now done commercial for 3 years. Someone noted above how much more \u201ccomplex\u201d commercial is. To me, it\u2019s not more complex, it\u2019s just different. I regret the switch, even though by all standards I\u2019m doing well. I was making much more money in residential. I was at an 90/10 split &amp; all the money at closings came to me. A big commercial firm will take more than that and you usually end up splitting commissions with other brokers. In year 3 I have made roughly half the money I made in year 3 of residential. I know commercial agents look down on residential agents. I never worked harder or had more complex issues arise as when I did residential. Commercial to me is easier and generally a 9-5 atmosphere. I know my opinion is not the norm - it\u2019s just my experience. I loved my clients as a residential agent and made many good friends. I can\u2019t say the same on the other side. I regret it, but I\u2019m stuck at this point. I wish I could go back.", "replies": [], "depth": 1}, {"id": "fi85qfl", "text": "Late to the party here but thought I\u2019d chime in as I wanted to pursue commercial brokerage for many years, finally got my license and was encouraged go residential first due to the barriers of entry/success coming in green.  I took the advice and did 3 years in residential with great success. Year two and three I averaged over $10m each. I decided it was time to make the leap a year and a half ago into commercial and here is what I\u2019ve learned:\n\nIt\u2019s every bit as hard as people make it out to be.  Since I started I have tracked my efforts and results carefully.  I have averaged 65 hours a week up to this point. Year 1 I had 5 listings, roughly 60 buyer or tenant clients and closed one property and signed 4 leases.  My take home year one was around $15k. Truly the hardest I\u2019ve ever worked for the littlest I\u2019ve ever been paid. It was horrible stress but the biggest takeaway was I can\u2019t imagine doing anything else now. \n\nAlmost halfway through year two I\u2019ve made more than year one already.  I have $3m under contract now and around $10m in listings. I\u2019m still scraping by trying to survive but I feel year 3 will be great. \n\nResidential I maybe had 1/10 contracts fall apart. Commercial I feel like 1/10 stays together.  You need a level head for this or you will go crazy.", "replies": [{"id": "fi8a7xr", "text": "Thank you for that. Even though there are so many agents and plenty of competitions, but there are alot of opportunities around the corner. You could always know where and when your next paycheck coming in. I feel there is less competition in commercial, but got to hustle for the next paycheck.", "replies": [{"id": "fi8e3ho", "text": "I always say it\u2019s one of the only careers you could make unlimited money in or work 70 hours and make nothing. Again I emphasize having a cool and level head in this business. If you get stressed out easy your blood pressure will be through the roof. If you can keep things in perspective and have the self confidence to just move on to the next when something falls apart you\u2019ll do great. My experience is brokers and clients are a bit more cut throat in this world.  Money rules and people will unfortunately throw you under the buss to make a dollar more. Play by the book and cover your back.", "replies": [], "depth": 3}], "depth": 2}, {"id": "ikr83fl", "text": "Do you still recommend it?", "replies": [{"id": "ikw11b3", "text": "Absolutely.  Love what I do. The financial progression has gone well, last year I closed $10m, this year I was at $13m halfway through the year.  Still a challenging career but I do love it.", "replies": [{"id": "ikw57cz", "text": "How many hours do you work a week would you say? What are some good ways to get started in the career? Thanks", "replies": [{"id": "ikxlq1z", "text": "I would say an easy week for me is 40 hours, and a busy week is 60 to 65 hours. Average is probably 50 hours or so. The last couple years I have been crazy busy and definitely feel like I need to readjust the work life balance, but I also know you need to make hay while the sunshine\u2018s in this business.\n\nAs for getting started I would suggest one of two paths. You will be drinking from the fire hose when you get started so the more guidance on avoiding mistakes the better. I would suggest either starting as a analyst or junior broker working under a senior broker at a large firm, or if you go with a smaller firm that doesn\u2019t have a structure like that Then I would suggest muddying up with a more senior broker or two and offering to help them on some of their deals in exchange for the experience. Essentially finding a mentor. This is the path that I took and I also brought more senior brokers on to cool broke my first few deals so I had a little handholding and didn\u2019t look like a jack ass to my clients yet it was worth the more senior brokers time because they were at least getting paid out of it. This is not a career you can come in to and just wing it with clients. You have fiduciary duty to your client and if you don\u2019t have the knowledge to truly bring value than you are not serving your clients best interest.\n\nThe other tip for getting started is you need to learn your market. My first two weeks all I did was drive different areas and look at basically every commercial listing there was. You need to be able to picture what $27 per foot triple net gets you in town a versus town B. If you were looking at warehouses in town C and one is for sale at $25 a foot in the other is for sale at $85 a foot, you should be able to picture those two properties in your head for the specific area it is in. If someone calls you and says I\u2019m interested in such and such property that address should ring a bell in your head and you should be able to give some initial feedback. Being able to offer that immediate market knowledge is what gives new clients confidence in your abilities.\n\nTo this day market knowledge is one of the things that significantly impacts my ability to secure new clients quickly. If they ask me about a property in my first conversation with them and I immediately rattle off who the owner is, I know it\u2019s impacted by a lien that they are fighting, There\u2019s a right of way issue, two years ago such and such tried to do this project on it and it got shot down by city Council, etc. you immediately prove your value to that client in a scenario like that. You just saved them from weeks or months of research and potentially wasting money on dd. \n\nThe last three years I have not had to do any outreach for new business. All my clients now are repeat clients and typically referrals from previous clients. It\u2019s great when the business comes to you and you don\u2019t have to go hunting for it.", "replies": [{"id": "ikzbsoa", "text": "Very good to know I am looking at commercial real estate as a backup if school doesn\u2019t go as planned. Im 21 hopefully it isn\u2019t too late, do you feel it is a stable career once you are established or does it vary and depend heavily on the market? also looking back on it now would you have to started in residential still to learn the market or jump straight to commercial? I\u2019m new to the field but don\u2019t have a lot of money or experience unfortunately, thanks for your input.", "replies": [{"id": "ikznlxb", "text": "It definitely will not be too late. I\u2019m in my mid 30s and I probably cut the median age of my office in half. It\u2019s commonly a second or third career for a lot of folks.\n\nThe start up period is something you really need to take into consideration when starting. Your first year you likely are not going to make much at all. Your second year you\u2019ll make some money but likely just enough to survive. I would say you at least need a years worth of income put back when you get started. You have to realize even if you had great success getting some clients starting out the deal cycle in this industry can be very long. This is not residential real estate where you were closing properties in 45 days. My fastest deal in the last year was probably 90 days and I\u2019ve got a deal under contract right now that\u2019s going to be hitting two years next month. \n\nIt is stable I would say but you need to plan for the unknowns and ups and downs. I\u2019ve had $16m in terminations this year. Can you imagine if I was spending that money before it came in. A deals not done until you deposit your check. The market shifts and you can also be hit with bad luck when it comes to deals falling apart. If you make $100k live like you make $50k.  If you make $300k live like you make $150.  At least until you have a nest egg to fall back on.", "replies": [{"id": "ikzpoqs", "text": "Okay great advice I heard it can take a long time to get the career going but it usually works out for people if they stick it out long enough. It definitely takes a strong will to be able to accept deals like that falling apart. Do you recommend I go straight into CRE if that is the end goal or is it better to get experience through residential first?", "replies": [{"id": "ikzqgk0", "text": "Go straight to commercial if that\u2019s what you want to do. They have very few similarities so there\u2019s not going to be much value that transfers over to commercial. Furthermore a lot of brokerages are actually more willing to bring somebody in Green with no experience that\u2019s motivated over somebody coming from residential real estate. Residential experience is not viewed with a positive light in the commercial world. I personally started in residential but purely as a necessity because I knew I could not afford to survive the start up.  I did not wanna do residential but it let me utilize my license and make more money than I was so I could put some back for the commercial move. I hated residential. But for me it was a necessary steppingstone unfortunately.", "replies": [{"id": "il1dl43", "text": "If you don\u2019t mind me asking, what did you study in college or university? And what do you recommend studying?", "replies": [{"id": "il32zpd", "text": "I have two degrees of which neither are related to this field. First was aviation sciences and my first career was flying. Second bachelors was in fine art and photography which did lead to my second career with a marketing company.  I did a lot of work for developers and commercial brokers and that\u2019s what led me on this path. \n\nI think the two strongest skill sets to come in with would be either a financial or marketing background.", "replies": [], "depth": 11}], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]