Thinking about becoming a land broker - advice needed
Hey all,

I work for a homebuilding company doing land acquisition. I was recently offered the opportunity to come work at a friend of a friend's brokerage and start their land division. They do commercial but nobody at their company currently does land. I think this could be a huge opportunity for me as I've got the money saved up to sustain me for well over a year if I budget correctly.

I'm thinking about starting to study for my broker license and moving over to their brokerage in the spring. I wanted to post here to see if anyone else currently works as a Land broker and has any tips for how different it may be from other types of commercial real estate. I have the land ac background which is great but I'd largely be starting from the ground up.

Anything I need to know going in, things to look out for, etc. Any guidance would be appreciated.

Thanks!
[{"id": "hjlcocz", "text": "Why the change? better pay? a cut? hard to say without knowing more specifics.", "replies": [{"id": "hjle5ep", "text": "Lot of reasons; opportunity to have my pay tied directly to my work instead of being on a salary, more freedom in my work schedule, and focusing strictly on putting deals together and not on a lot of the other headaches that go along with corporate land acquisition.", "replies": [{"id": "hjlizce", "text": "I don't know anything about your field man, but fortune favors the bold.  Do it.", "replies": [{"id": "hjlk0kh", "text": "Well that\u2019s all the motivation I need!", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hjlj0cw", "text": "If you do land acquisition you already know how long these deals take, plan on 2 years no income and you'll do great\n\nonly problem is that we are at the end of the cycle", "replies": [{"id": "hjlka26", "text": "Yup\u2026hoping I could get lucky and find a unicorn deal that I\u2019d be able to close early. Or maybe do a little bit of commercial while I build out my land pipeline.", "replies": [], "depth": 2}, {"id": "hjm0e2r", "text": "Not sure where OP is but plenty of land still trading in DFW.", "replies": [{"id": "hjtnh05", "text": "land going strong in Ohio too.  Everyone is trying to find a place to break ground right now.  There is nothing existing to trade and everyone has money.", "replies": [], "depth": 3}], "depth": 2}, {"id": "hjm4jjp", "text": "They were saying we were in extra innings in 2017\u2026", "replies": [], "depth": 2}], "depth": 1}, {"id": "hjmdgnw", "text": "Agree. Working on a deal now just got under contract 120 DD then up to 18-months entitlement period. Closing is 30 days after non-appealable site plan approvals. It\u2019s currently AG land getting rezoned to resi - we have a longggg road ahead but definitely worth it in the end. Assemblage $14m, 3% commission. While that is brewing, on to the next\u2026.", "replies": [], "depth": 1}, {"id": "hjn1j4s", "text": "I do tons of land rn because of the explosion in industrial (my speciality) speculative development. Land brokerage can be very lucrative especially once you get rolling and developers give you the opportunity to buy into the deal, however, it is extremely slow moving, complicated and extremely high percentage of deals falling out under contract. Also in a downturn it gets really tough because no one is building. I\u2019d pick a secondary speciality while you build up listings, buyers and skillset.", "replies": [], "depth": 1}, {"id": "hjn27it", "text": "Could be an interesting opportunity! But land does typically take a long time to sell, but the plus side is that commissions tend to be higher, at least in my market. I would just budget for that longer sales cycle and get some other non-land deals going to sustain yourself.", "replies": [], "depth": 1}, {"id": "hjowaix", "text": "If you\u2019re fed up with your current job or compensation, I\u2019d advise you to shop around with other homebuilders right now. Every builder from the national level to the local level is hiring land acquisition folks and throwing money at them. It might not top out at the same level as brokering, but you might be able to get a solid pay bump and a guaranteed paycheck.\n\nIf you\u2019re set on going the brokerage route, I\u2019d make sure you have the experience with other uses or asset classes to effectively gauge a property. I\u2019m sure you can evaluate it from a residential development perspective, but can you evaluate it for agricultural use or industrial space? You\u2019re also going to want to make sure you have connections with end buyers in those other asset classes. Sounds like you have plenty of experience with land brokers so you know they truly broker deals, it\u2019s not just a list online and forget about it situation. \n\nAs for the business side of it, figure out what the brokerage will charge you for fixed costs (hanging your license with them, rent, support staff, etc) and variable costs (commission splits, E&amp;O insurance). Likewise, figure out what they\u2019ll provide for you in return - database subscriptions, marketing software, brand awareness, an assistant, etc.  Make sure you map out a pathway for future growth with the company if your land brokerage business takes off.  You don\u2019t want them to just see you as a commission based employee, I think you want to own a run a portion of the brokerage.", "replies": [], "depth": 1}, {"id": "hjq5abg", "text": "If you are so knowledgeable, why not figure out how to get equity in some of these development deals and do them yourself? Brokerage is good until it\u2019s not - black swan events, construction financing drying up, overbuilt markets are all things that inevitably happen through cycles and if you didn\u2019t put money away for stuff like this or aren\u2019t living below your means, it won\u2019t be ideal.", "replies": [], "depth": 1}, {"id": "hjq79os", "text": "Lot of great advice in here. Thanks y\u2019all", "replies": [], "depth": 1}, {"id": "hjtnbhc", "text": "&gt;     I work for a homebuilding company doing land acquisition. I was recently offered the opportunity to come work at a friend of a friend's brokerage and start their land division. They do commercial but nobody at their company currently does land. I think this could be a huge opportunity for me as I've got the money saved up to sustain me for well over a year if I budget correctly.\n\nLand brokers would generally probably like to switch jobs with you tbh.  If you are doing land acquisition you must know some land brokers?  Have a lunch and discuss. \n\n1 year is like normal due diligence time on a land deal.  It can go much longer for tons of reasons, and this doesn't include the time it takes to get that listing, market it, negotiate it, etc.\n\nLand just takes FOREVER.  It also seems like it has the highest fail rate.  There is just more shit to go wrong, and it frequently doesn't happen until you get to planning/approvals.", "replies": [], "depth": 1}]