What would you need to set up a Commercial Brokerage?
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[{"id": "dxazuu7", "text": "Capital is definitely not the biggest need for a brokerage group.  The biggest things are probably experience, information, and relationships.  You need to know your market very well, specifically you have a ton of great sources(relationships with other brokers) for lease/sale comps depending on which side you're brokering, relationships with buyers and sellers, and experience with your niche.  No one is going to use a broker who has never worked on a deal before no matter how charming or good people skills you have", "replies": [{"id": "dxb0csq", "text": "I agree completely on this. I\u2019m looking for physical needs also. Like access to Costar, office space, phone, etc. ", "replies": [{"id": "dxiutcj", "text": "You just named them basically.\n\nThese expenses add up for sure, but are minor when trying to do a brokerage.  \n\nIf I want to start a oil change place I gotta pay for that kinda shit too, but I can probably hire a manager and techs more or less from a generic add.  \n\nIf you start a brokerage your agents bring the deals and will all have significant experience and books of business.  You need a reason for them to come to you or they will simply bleed you for every penny (all of these guys can go independent or to any of your competitors in a second).  The reason is probably a master broker who can bring business to them or you providing support in other ways.  \n\nAs odd as this may sound, brokerage is not about the clients at all.  It is about the agents.  You need to recruit deal makers, and \"well we will give you a desk a  phone and costar\" is pretty god damn minimal in terms of recruiting.\n\nI agree with the other folks to find some vets, give them equity in this op and fund it for them.  They know all the agents and deal makers.  Incentive them to be successful and let them do their thing.  Whoever who select there is going to have decades of connections and knows how to do this already, just give them capital.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dxb2ct9", "text": "If you had a large amount of Capital why would you deploy it building out a brokerage team? You\u2019d be better served investing it in CRE directly rather than creating a services company ", "replies": [{"id": "dxb6xzb", "text": "This is a large CRE investment company and they want to start a new brokerage arm. The duties of the brokerage would mainly be finding real estate to buy, and tenant repping on the side. ", "replies": [{"id": "dxbbi6w", "text": "If this is the case, the absolute best solution would be for them to approach existing brokers in the market, and ask if they'd be interested in entering into a partnership, whereby the investment company would fund the experienced broker the out of pocket expenses to set up shop. \n\nThis is by far cheaper and more sensible option. To be honest it doesn't even cost that much, they'd just need a desk, a phone and a computer. You could arguable do it from a home office. The expertise and relationships are the crucial factor.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dxb5h5e", "text": "Said with the upmost respect, if you need to ask this question, you're probably not ready to set up a commercial brokerage. \n\nYou can throw all the money in the world at it, but unless you have the relationships, experience and market knowledge, it's a non starter. \n\nPretty much every single new commercial shop is set up by someone who has been a VERY successful commercial broker for a number of years. Not to mention the if you expect to be the head broker you need several years of licensed sales experience just to get a brokers license.\n\nYour best options would be A) simply invest in CRE, or B) if you're dead set on running your own shop, you should join up an existing brokerage as a junior agent and get at least 5-10 years under your belt.", "replies": [{"id": "dxbavme", "text": "Agreed. You really don't need any capital at all to start a new brokerage other than to get the proper licensing - everything else is just hustle and grit. ", "replies": [], "depth": 2}, {"id": "dxbbea1", "text": "or C) hire a very successful, experienced broker to run your shop and ask them what you need.", "replies": [{"id": "dxbbkv7", "text": "Funnily enough this is exactly what I just said in another chain on this thread. This is by far the most sensible option. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dxbjlv2", "text": "Holy fuck, if you have a lot of money, they are literally the worst things to buy. All the knowledge and customer base comes with the brokers. It is like buying an insurance company, only to have all the insurance agents leave. You bought nothing. ", "replies": [], "depth": 1}, {"id": "dxlur3o", "text": "Very location dependent. If you're in a major city or if you're suburban. Are you retail or are you something else. The sector I started in, in Manhattan ran lean, mean and green. But if I wanted to transfer that team to what I do now, I'd be wasting time and capital. Hell, it didn't even work as a model in Philly. Totally depends on your sector. \n\nWith that said. If you have the capital and the market is small, just buy your competition out. It's much cheaper than starting it from scratch for that kind of market share", "replies": [], "depth": 1}]