Hiring Agents in the Current Market
Two months ago, after 8 years in the industry, I started my own brokerage firm in Atlanta. We started March with 3 new listings, totaling $8MM. Incoming calls have been slow but the activity has picked up exponentially this week and is very encouraging as we face our new reality. I'm a believer that "7 is the new 6 Cap" and expect all asset classes to take a significant haircut once transactions pick up.

I have spent a fair amount of time prospecting existing agents, offering leadership opportunities and splits that would be unreachable with large shops because of their significant overhead. The conversations have been positive and working closely with a few young guns to build out my team. We will be getting some major disposition opportunities, working with a owner-user that has a strong balance sheet of buildings that will not be reopened after the crisis and I will be more than willing to share the commissions as I need manpower to get these sold.

I've studied some of the newer firms that grew tremendously after the 2008 recession and eager to learn how they were able to grow/attract agents in a time of layoffs and consolidation. There is significant opportunity to grow in this down cycle and curious as to how to effectively grow my brokerage, hiring the right people that will take our firm to the next level. 

Open to any advice/feedback and glad to help in any way I can.  I am convinced that those who work diligently in this time will see future success and I look forward to helping agents break in to the industry.
[{"id": "fmq669o", "text": "I\u2019m on the ownership side. Have you considered reaching out to young acquisitions guys at investment/development firms? Chances are, their 2020 bonuses and promotes vanished, and many may view this as an opportunity for a fresh start.", "replies": [{"id": "fmq6wnu", "text": "Absolutely. These guys are typically more knowledgeable than prospective agents but often they are not ready to be commission only salespeople. I'm having multiple conversations with prospects currently with investment/development firms. I don't want to see anyone get laid off but we will be ready for those guys when it inevitably happens.", "replies": [{"id": "fmq8zmw", "text": "Well it seems like you have a growing book of business and if new members are able to participate on those deals, that could be a huge incentive. For what\u2019s it worth, I am an associate on an acquisitions team, I would view a small, entrepreneurial firm like yours as a boiler room, cold calling, lone wolf opportunity and would turn it down. But if you are able to sell existing business and a legitimate need for new agents, that could attract a lot more talent.", "replies": [{"id": "fmqakjc", "text": "I appreciate your feedback and understand the challenges we face in growing. The first one or two agent hires will be a tough sell but I am confident that personal training and sharing my existing listings will attract good candidates.  We have a polished approach (background in banking) while many of the \"lone wolfs\" are hack hybrid commercial/residential agents with one-page flyers and gmails.\n\nI position the firm as a startup/boutique, we are not chasing REIT/Institutional listings and have been very successful attracting private syndicators and wealthy individuals. \n\nThe job market for BBA/MBA 2020 graduates is not strong, similar to when I graduated in the recession. All I need is a few hungry agents with nothing to lose and we will emerge as a reputable team in the Southeast.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fmqey3h", "text": "I\u2019m in Atlanta. What brokerage?", "replies": [{"id": "fmqggmb", "text": "Rise Property Group. The website will launch next week, check us out on LinkedIn.", "replies": [{"id": "fmqmpct", "text": "Do yourself a favor and stay lean for a while.  We're not even close to bottoming out, and why bother competing against desparate companies when you can just wait them out.  Stay small and profitable.  Scale when you HAVE to have more people because you're flooded and there's much less competition to pick up the slack.", "replies": [{"id": "fmqnzxh", "text": "I appreciate the virtue of staying lean. I consider myself very fortunate to have set myself up for more listings and simply need manpower to underwrite, value, and market my existing and future listings. \n\nI see incredible opportunity in this crisis to add serious talent who might have been a fit for a developer or big brokerage one month ago. Put the right puzzle pieces together and we can be a formidable player, stay small and we will have to pass on lucrative opportunities. Bring up the right people and pay them well is a recipe for success.", "replies": [{"id": "fms47yi", "text": "Last line. Wish more brokerages would realize this - it\u2019s so rare that if you give entry level employees a small piece of the pie or a good salary in exchange for their work they will work 10x as hard and triple check their work. Hiring agents to do underwriting and not paying them is a recipe for them walking out the door, seen it happen multiple times", "replies": [{"id": "fmshp9v", "text": "During the last recession I took a job with a boutique investment and brokerage firm and this was exactly what happened. I was underwriting investment deals left and right with promises of fees when they transacted. Seemed like a good set up until you realize the hit rate on distressed assets was incredibly low and many of them had no fee attached. Took too much time away from brokerage work which was the actual money maker.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "fmrhjgr", "text": "cant find a job listing for your company anywhere...not an expert on hiring, but i think that;d be a good start lol", "replies": [{"id": "fmsjoys", "text": "We are building the airplane while in flight. I did not plan on hiring so soon but good candidates are available. Time to strike while everyone is laying off. \n\nWebsite launches next week. I\u2019ll post it next week to let all these savages critique.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fmqjxt8", "text": "I\u2019m a 25yo broker in Colorado and I\u2019ve been approached by managing brokers of 2 competing firms.    In the past month.  I can tell you that the two main things I\u2019m personally looking for if I were to switch firms are a good mentoring situation and a split higher that 50/50 which is what I have currently.", "replies": [{"id": "fmqn426", "text": "Thank you for the feedback.  I\u2019m committed to mentoring new agents and believe that 50/50 model is about as dated as 6% commissions in residential. I\u2019d trade Atlanta for Colorado in a minute but my entire network is here and FILA. Both are markets are fast growing and should see a strong recovery.", "replies": [{"id": "fmquh4g", "text": "I agree with all of that, vest of luck!", "replies": [], "depth": 3}], "depth": 2}, {"id": "fmr5o0m", "text": "How's the overall CRE opportunities in Colorado? Looking to move to the Denver or Boulder area within the next year. Currently in MF debt underwriting.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fmqo7p3", "text": "Almost all brokerages waive several months of desk fee to get new employees started. A few offer no commission if meeting agreed target. Some new agents want leads. Other agents want an in house lender.", "replies": [{"id": "fmqta58", "text": "Great ideas", "replies": [], "depth": 2}], "depth": 1}, {"id": "fmqpxd9", "text": "Not directly what you're asking, and probably not the greatest time to consider adding a new vertical to a new company, but have you considered a commercial property management arm to your business?  Good management is going to become critically important in the next several months.  Understanding the dynamics of how to interact with commercial tenants is huge right now.", "replies": [{"id": "fmqt9d7", "text": "I\u2019ve considered adding it. For the near future I would prefer to outsource to a partner, it\u2019s a low margin business and others already do it well. Landlord leasing and debt/equity are much more appealing in the short term.", "replies": [{"id": "fmr2g5o", "text": "I dont know how it may go this time, but last time having in house pm for recieverships and reo was a huge factor in getting listings.  Id also reccomend considering this more or just hiring someone to handle it in house.\n\nThats actually how I got into brokerage.  I was working for a large multifamily owner/fee manager on our special asset team (we were taking recieverships and disaster properties for fee).  My brokerage wanted someone who could handle pm and understood that side because the banks wouldnt list without pm services.  That was in 08.\n\nAlso pm is low margin on stable properties.  I was getting like 800 a month to basically drive by vacant industrial buildings and pay the utils and make sure someone cut the grass.  Not sure if that will happen again but last time theyd pay whatever you asked for pm.  They wanted valuation/pm/brokerage all packaged.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fmqr5qq", "text": "Id rethink the entire thing tbh.  Brokers got killed last time generally and will this time too.  We live on volume not great deals.  Volume is about to plummet.  \n\nYou have 3 listings and some promise of an inside line on one client who will have distressed.  Every experienced broker has that or more.  You can grab some newbies maybe and get free labor.  Those experienced developer/acquisition folks are not going to jump to brokerage , they will go to whoever is buying, banks, etc.\n\nI'm in a similar position to you and am focusing on getting out of brokerage and raising capital.  I sold distressed properties last time, I want to buy them this time.  Id suggest considering doing the same.\n\nWhy bother listing good deals when you can purchase them and take the fees, am, and equity?  The only reason is you dont have the funds and tbh if you have been doing this this long you should be able to raise them.\n\nId abandon recruiting green brokers and start hitting your book for money and set up a deal on your liquidating clients properties.", "replies": [{"id": "fmqt33i", "text": "You sound like you know what you\u2019re talking about. Not a bad idea at all and something I\u2019ve frequently considered. I have my own personal portfolio of several section 8 rental homes and agree now is a great time to be buying. \n\nSyndicating deals would be a new venture. My focus is on growing this business and I am still early in my re career with most of my experience in commercial lending. I\u2019m looking to build this in the short/medium term with long term of owning/managing my properties. Not looking to financially ruin myself or my reputation so early on, I\u2019ll wait for that next cycle. Of course if the right deal comes along, I\u2019m ready to purchase but the blood is just hitting the water.", "replies": [], "depth": 2}, {"id": "fmr62iz", "text": "This is the way", "replies": [], "depth": 2}, {"id": "fmrgoja", "text": "curious what your strategy will be to identify those distressed buying opportunities. I'm young/early in my career but in a similar position to you and (along with my firm) we have capital raised. trying to formulate a strategy to identify acquisition opportunities. feel free to pm me. would love to hear your take", "replies": [], "depth": 2}], "depth": 1}, {"id": "fmrp3if", "text": "Long term things are going to be great.  It\u2019s the new California out here and Boulder is San Francisco but that means strong competition.  If you have a undergraduate degree in anything substantial you\u2019ll probably be able to get a job as an associate broker somewhere.  Don\u2019t discount working as an assistant while you get your license either.", "replies": [{"id": "fmsp6db", "text": "I actually didn't even realize Boulder had any CRE firms, I assumed all of them would be in Denver. I think I'd actually prefer being in Boulder than Denver if possible so I'm intrigued. Do you have any info on how the Masters of Real Estate from CU Boulder places in the area? Kind of considering going that route", "replies": [], "depth": 2}], "depth": 1}, {"id": "fms09lt", "text": "A couple of things to consider.  Will you be strictly running the shop or a competing broker?  New agents won't want to compete with there boss. \n\nIs your training formal or in the form of, \"hey follow me around\"\n\nBe careful with you splits.  a 70/30 split means you are running a 30% margin without taking on the first expense.  Factor in staff, rent, supplies and technology and you will soon be making no money.  Better to figure out what your seat cost will be and then find producers that can cover that and then some so you make a profit.   \n\nWhat asset class are you focusing on?  Anything that is multi tenant you will need a strong property management arm.  In my opinion this will be your number one recruiting tool for agents.  If we hit a recession deals will go bad and court appointed receivers will be needed.  Those receivers appoint the leasing and sales agents.  Receivers with these in house won't foolishly appoint agents outside of their own shop.  You need a management arm to become the receiver.  Working on behalf of local or regional banks may be your only source of pipeline for 2-3 years.\n\nWho is your customer, the property owner, your agent, the lender, your family?  This matters\n\nWhat is different about you, why should someone hire your firm?  If you don't know then your customers won't either.", "replies": [], "depth": 1}]