So, you think commercial real estate is for you? Before you take the plunge, explore what it takes to become a successful commercial real estate broker.
As graduation and summer internships commence, often students ask if commercial real estate is the right career path for them. And if so, what they need to know to become a successful commercial real estate broker.
Commercial real estate can deliver big rewards, but those rewards are due to a broker’s hard work, dedication, and persistence since deals can take a long time to happen.
Before you take the leap into this exciting and life-changing career, here are some insights that will guide you through deciding whether commercial real estate is right for you.
Before jumping into this field, one of the first decisions you need to make is what specialization of commercial real estate you are interested in pursuing. This is the perfect time for self-evaluation and personality analysis since your specialization will determine the type of clients you interact with, your working environment, and required knowledge needed to do your job.
One of the exciting things about commercial real estate is that it can be approached from so many different areas and specialties. Just to name a few possible specialties – you can use your skills to analyze cash flows for new developments, broker transactions with industrial, office, or retail clients, or invest as a property owner in developing new ventures.
You can work in many different markets from major metropolitan areas, such as New York City, DC, Chicago, and LA, to mid-to-small local markets, such as Houston, Orlando, and Atlanta. Major cities have more opportunity and bigger deals and fees but those markets are hard to break into. Mid-size and smaller metro areas have smaller deals and fees but offer new brokers immediate results and payouts. Determining your specialty and desired salary will also help decide the best market for you.
A commercial real estate broker that works collaboratively within their firm’s group to achieve a common goal is most profitable. Mentorship and collaboration within a firm breeds success. Senior brokers will benefit from having a junior or entry level broker do market research and leg work. While junior or entry level brokers benefit from learning the ropes from their senior peers as they build their network. Clients benefit from a well-rounded knowledgeable team that only comes from sharing information. Brokers that work together are more likely to retain clients and make more money than brokers who don’t.
Establishing yourself with a reputation for being trustworthy and honest is imperative to your success. Additionally, associating yourself with a reputable company will generate more leads and positive responses to cold calls and emails than just your name alone.
Most brokers are trustworthy, driven, hardworking, social, patient, and persistent. They work hard to gain new listings and must move fast when opportunities present themselves. They often work long days and sacrifice nights and weekends to make a deal happen.
Brokers must wear many hats. They are “jack of all trades, master of none”. They are at times, and often all at the same time, a salesman, a lawyer, a construction contractor, an accountant, an engineer, and an architect.
Brokers are social and network face-to-face to seek out leads, convince total strangers to hire them, and maintain relationships with current and past clients.
Commercial real estate can pay out big but there are fewer deals in between each deal. Deals can take 6 months to a year, sometimes longer, to come to the closing table, if they ever do. This means you have to manage your lifestyle on commission. You will work hard every day knowing if you don’t close the deal then you won’t get paid, period. And when you finally do get paid, you won’t know when the next paycheck is coming.
If you want to make easy, quick money with minimal work hours, becoming a broker may not be for you.
However, if hard work doesn’t scare you and you enjoy people and success with big rewards than commercial real estate may be for you.