Pros &amp; Cons of joining a boutique firm as a broker early in your CRE career?
Was curious if I could get advice on the good and the ugly about joining a smaller shop early on in your career as a broker. I don't have real estate experience so I'm looking to take what I can get. The firm is in a major metro area.
[{"id": "huiguju", "text": "Larger firms are really hard to make it in. It\u2019s so cut throat that a large portion of brokers leave after their first few years and end up owing the brokerage money. However, if you can get on a team with a good broker at a larger firm, they will treat you right and keep you in the game longer. your world of clients can get very big at the larger firms too. You deal with a lot of large clients and larger requirements which gets you in with a lot of Fortune 500 companies. If you\u2019re really good, you can make a ton of money at a large firm.\n\nThe smaller firms are usually more local and have a limited scope with a smaller but more loyal client base. They will occasionally deal with the larger clients every now and then, but less often than the larger guys. The comp structure may also be different and the owners may have more patience for someone who\u2019s starting out. They will also be more willing to teach you and you will be brought into more meetings with clients. You will have access to less deals though since the broker network is smaller, which means you will have to hustle twice as hard.", "replies": [{"id": "hukoi79", "text": "Every major brokerage shop draw I have seen is non-recourse, meaning if you leave with a negative balance the brokerage shop isn\u2019t coming after you to recover money you \u201cowe\u201d", "replies": [], "depth": 2}, {"id": "hulrs08", "text": "Most Sr. Brokers leading teams don\u2019t treat newbies well either. They churn and burn.", "replies": [], "depth": 2}], "depth": 1}, {"id": "huj6kkx", "text": "If your in a boutique firm joining CCIM and SIOR to expand your reach. If you don\u2019t have some cash flow and connections jumping into a larger brokerage is most likely going to chew you up and spit you out.", "replies": [], "depth": 1}, {"id": "humjejb", "text": "Out of college, I joined a large brokerage in a major metro as a \"broker in training.\" I quickly realized that in order to become a successful broker, I needed to understand the numbers and be able to talk to how money moves in and out of a commercial property. I jumped ship to another large capital markets intermediary where I became an analyst for three power teams at the company.\n\nI realized that the best and most successful brokers know how to intelligently speak about the numbers and understand the financial assumptions that go into a discounted cash flow. The best brokers also have a code of ethics they adhere to. Fortunately, I was able to get this experience under my belt because I was working for a team that was highly transacting which gave me many opportunities to work on large scale deals.\n\nIn conclusion, here is my list of pros and cons regarding large brokerages:\n\n**PRO**:\n\n* Generally speaking, there is more deal flow at large brokerages which gives you more opportunities to work on an array of deals. This allows you to learn quickly.\n* Most large firms are full-service and have a suite of in-house services like leasing teams, capital markets teams, researchers, etc. that are great resources for you.\n* Marcus &amp; Millichap is the only large brokerage shop I can think of that \"feeds you to the wolves.\" Most large firms like CBRE, JLL, Cushman &amp; Wakefield, etc. have new brokers join teams as junior brokers which allows you the opportunity to be a sponge and learn the business from a seasoned professional. This makes for an easier transition into a full production role with the added support and resources of your team. There are also many avenues you can take to become a broker without getting thrown into the mix right off the bat. For example, years ago when I interviewed with CBRE, I was told that many of their brokers start out in their research division, form relationships with certain brokers and teams, and then laterally move to a team that \"recruits\" them.\n* Brokerage teams at larger shops almost always have their own financial models that allows you the opportunity to get caught up to speed on the numbers. You likely will not be building your own model from scratch right away.\n\n**CON**:\n\n* Highly competitive though do not be intimidated by this. In my opinion, I observed the best brokers to have a finite understanding of analysis and underwriting, adopt a code of ethics, are persistent, do what they say, and under promise but over deliver.\n* Large brokerage houses have very high expectations. Generally there is a timeline for when you need to start producing deals or you get the ax. This can add a lot of stress when you are a new broker. My best advice is to pick a hyper-local market and know every building and every owner and introduce yourself to them. Start to carve out a territory that others are not operating in and be a resource to these property owners. The idea is to get them to think of YOU when they want to sell.\n* If you are working for yourself and not with a team, be prepared to spend some money when you get started on all your supplies.\n* If you are a woman (I am), you will need some thick skin. Be prepared to take a lot of shit, get questioned and critiqued on everything you do, and know you will never be \"part of the buys club.\" Do not let this phase you as it is actually an *asset*. Male property owners get tired of talking to male brokers all the time. They will give a woman the time of day more often than they will a man. And make sure you are overprepared!\n\nHope this helped. Feel free to DM me with any additional questions. I wish you the best.", "replies": [{"id": "hun6zti", "text": "Thank you so much for your in depth answer. There's definitely lots to consider especially because I'm less than a year out of college and only have a little under $10k to my name. I'm in a lucky spot and decided to move back in with my parents after graduation. I'm sure my family wouldn't let me drown if I were to give up my current salary (nothing special) to pursue this. I'm just in a weird spot in my life where I want to do things like buy a wedding ring, move out of my parents house, and many other things that can only happen from having good steady money. At the same time I feel like the best time to go for it is now, or else I'll never be able to make it in real estate. The big caveat is, my girlfriend is also a cre broker (large firm)... very early in her career and probably 1-2 years from starting to bring in serious money. Life is full of tough decisions!\n\n&amp;#x200B;\n\nTo add: I would like nothing more to get a job as a Capital Markets or Research Analyst to start and learn the industry inside and out. I've just heard how competitive it is to get one of those jobs and haven't gotten any interviews for applications I've sent in.", "replies": [{"id": "hvr2ji4", "text": "You made a very good point about money. Be prepared to make no money the first year you are a broker. You appear to be in a great spot financially speaking because you are not paying rent or any of the associated bills that come with living on your own.\n\nIt is important to note that money is never steady when you are a broker. As mentioned, you will make no money your first year. In years that follow, you might have great years and closed a ton of deals but that could be followed by another year of stagnant deal flow. If you are comfortable with this, then I say go for it.\n\nYou can \"make it in commercial real estate\" at any age - be it the brokerage side or principal side. Of course when you are young, you do not have the responsibilities that come with, let's say, having your own family, taking care of children, etc. In other words, you have the time now to work your ass off without additional life responsibilities distracting you. Though do not do not overthink your career path and career journey. The first thing you want to do is think about where you want to be in five years; personally and professionally. Then make the step, really ANY step, and start working towards that goal. You will likely find that your commercial real estate career path will shift overtime and that is OK because your goals are evidently going to change.\n\nIf you want a job in capital markets or research I highly recommend applying to large firms. If your girlfriend is willing, tap into her network and see if she can get you in contact with the appropriate people. If not, then start cold reaching out to brokers, analysts, etc. on LinkedIn or email. I found going into these kind of job interviews it went a long way when I could subtly name drop someone on the team I spoke with in the past.\n\nFeel free to shoot me a DM with any other questions and your resume and a sample cover letter. I am happy to review and send it back with edits.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]