Building Your All-Star Apartment Syndication Team and Hiring a Real Estate Broker
Today, Theo will cover another important part of your apartment syndication team, finding and hiring a real estate broker. Who should be on team for real estate syndication. This team member will most likely be your best source for deals, so getting in with a good broker is HUGE for your syndication business. Learn how to choose a real estate broker, and don’t forget to subscribe to the Best Ever Show on iTunes.
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How to Choose a Real Estate Broker
Joe Fairless: There needed to be a resource on apartment syndication that not only talked about each aspect of the syndication process but how to actually do each of the things, and go into it in detail… And we thought, “Hey, why not make it free, too?” That’s why we launched Syndication School.
Theo Hicks will go through a particular aspect of apartment syndication on today’s episode and get into the details of how to do that particular thing. Enjoy this episode, and for more on apartment syndication and how to do things, go to apartmentsyndication.com, or to learn more about the apartment syndication school, go to syndicationschool.com, so you can listen to all the previous episodes.
Theo Hicks: Hi, Best Ever listeners. Welcome back to another episode of the Syndication School series – a free resource focused on the how-tos of apartment syndication. As always, I am your host, Theo Hicks.
Each week, we air a two-part or four-part podcast series about a specific aspect of the apartment syndication investment strategy. For the majority of the series, we will offer a document, spreadsheet, or some sort of resource for you to download for free. All of these free documents, as well as past and future Syndication School series, can be found at SyndicationSchool.com.
This episode will be a continuation of the four-part series entitled “How to Build Your All-Star Apartment Syndication Team.” In part one, which is episode 1548, you learned the six ways to find your prospective team members, as well as the process for hiring the first two team members, which are a business partner and a mentor. Then, in part two, which is episode 1549, you learned the process for hiring the third team member, which is a property management company… And, in this episode, which is part three, we will be discussing the process for hiring a real estate broker.
By the end of this episode, as well as the previous two episodes, you will learn how to find and hire a business partner, a mentor, a property management company, and a real estate broker. In the next part, part four, we will discuss the final three team members, which are your attorneys, your mortgage broker, and your accountant.
The free resource for this four-part series will be a Building Your Team Spreadsheet, which is a spreadsheet that allows you to log your various team members and make sure you are hiring everyone that you need. That is available for you to download for free, either in the show notes of this episode or any of the other three parts, as well as at SyndicationSchool.com.
The Process of Hiring a Real Estate Broker
Let’s get right into it: the process for hiring a real estate broker. First, what is a real estate broker’s responsibility? Well, primarily, they do five things… And these are the five things that all real estate brokers will do.
Source Deals and List Your Property for Sale
Number one is they will source deals with the purpose of wanting to represent the owner of the property, and to list that property for sale to the public. These are considered on-market deals, which are deals that are listed by a real estate broker. There’s an offer memorandum created, and it’s mass-marketed to the entire population, I guess, technically.
Set up the MLS
Now, this is slightly different than for single-family residents, because when you are investing in single-families or in smaller multifamilies, typically you’ve got a real estate broker or agent who’s representing you, and then they’ll set you up in the MLS. The deals on the MLS are listed by a different broker, so there’s two agents involved – your agent, and then the selling agent… Whereas for apartments, the more likely scenario is that you are going to reach out to a ton of brokers. You’re gonna work with 5, 10, 15 different brokers, and if you end up submitting an offer on one of the deals they have listed, then they are likely going to represent you. So, a little bit different that single-families or smaller duplexes and fourplexes, where an agent is representing you as a buyer, and then the seller as well. For apartments, it’s usually the one broker representing both parties.
Create an Offering Memorandum (OM)
Another responsibility is they create the offering memorandum (OM), which we briefly mentioned. This is the sales package that the broker puts together that essentially highlights the investment. So it’s got information on the market, the property, the financials, things like that.
Manage Contracts and Agreements
They also help the owner of the property when the listing is live to the signed contract. They will work with the owner between the time the property is listed for sale, and between the time the contract is signed, with things like confidentiality agreements, scheduling and conducting the property tours, answering potential buyers’ questions, and things like that. They will also manage the offer process, so from offers to contracts being signed. They’ll schedule the calls, the offer date, and they’re the ones that accept the offers and relay those to the owner. They’ll coordinate the best and final sellers call, and essentially everything that is involved in the offer process, they will help manage that.
Close the Deal
Then, once the contract is signed, they are responsible for ensuring that the deal makes it to the closing table, and then also as you’ll repeat that process for you in the back-end. So if you buy a property from broker A, then they will be your point person for getting the property to the closing table, and then 5-10 years later when you sell the property, you’ll likely use that same broker to list the property for sale.
Those are the five primary responsibilities that, more or less, every single real estate broker will do. Now, there are additional services that a real estate broker will provide to you once you’ve proven yourself worthy of the services. Those are – most importantly, they are a great source for off-market deals… Again, on-market deals are deals listed by a real estate broker to the public; but at the same time, since real estate brokers are sourcing deals, before putting it on market, they might send that deal to a list of premier investors or people they know can close, and bring them the deal first to see if they wanna take a look at it, see if they wanna buy it, and if not, they’ll put it on the market.
Most of the rest of this podcast will be a conversation on how to get brokers to send you those off-market deals, which involves winning over their trust and portraying yourself as a credible, serious person who can close on a deal. We’ll talk about how you can do that here in a few seconds.
How to Choose a Real Estate Broker Based on Market Advice
Another additional service a broker could provide is offer advice on particular markets, and submarkets within that market, and neighborhoods within that submarket, as well as help with deals. The deal depends on the situation. If you are working with the same broker who’s listing the property, then they can definitely help you to an extent with the deal, but at the end of the day they want to sell that deal, so trust their information, but also verify that what they’re saying is correct and it’s not biased because they wanna sell it. But if you happen to find a real estate brokerage who’s also a property management company, and you bring that property management company on, then whenever you’re looking at deals, you’ll have the eyes and ears of a broker to kind of review the deal with you, in addition to your property management company reviewing the deal.
That’s one example where they could help you with the deals, but again, if you’re working with the actual listing broker, do not take everything they say at face value. Trust what they say, but you wanna verify that what they’re saying is correct.
Hiring a Real Estate Broker Based on Opinion of Value and Commission
They can also provide a broker’s opinion of value (BOV) when you’re ready to sell, or considering selling. After you buy the property from a listing broker, and every year or two you should get a broker’s opinion of value, or at least determine what the value of the property is, to see if it makes sense to sell – ideally, your broker will help you out with that.
They could also invest their commission in the deal. This is what actually happened for Joe’s first deal that he did – the real estate broker invested a portion or all (I can’t remember which one of those is true) of their commission into the actual deal. This is great because it provides alignment of interest with your investors, because if the listing broker is investing on the deal, then the perception is that it’s a really good deal, because why else would the broker put their money in the deal.
And then lastly – and I kind of already mentioned this – they could potentially fulfill the role of another team member. For example, my property management company – and most property management companies are also going to be brokerages, too… So the property management company I work with, the wife is the president of the management company, and the husband is the president of the brokerage… So I kind of get to rely on both of them whenever I’m underwriting a deal; they help me check my assumptions, or tour the property with, but at the same time, since he’s a broker, he’s also out there looking for deals, so every once in a while he’ll send me deals.
Then there’s another brokerage that I talk to who also has an equity raising arm of their brokerage. They have the ability to help you raise funds for your deals as well, as an example of how they can fill another team member role.
My Process of Hiring and Finding a Real Estate Broker
So how do you find your real estate broker? I discussed this in part one, which is episode 1541, and I talked about the six ways to find your team members… But here’s exactly what I did to find my real estate brokers in Tampa. A little bit more specific, since I mentioned in part one finding these team members – whether it’s a property management company, a broker, a mentor, an attorney – there’s really only a certain number of ways to find them, and it’s going to be very similar, a few iterations… But I wanna provide an example of exactly what I did to find my real estate brokers in the Tampa Bay market.
Research, Research, Research
First, obviously, I created a list of Tampa brokers, but exactly how I did that is I googled “top Tampa Bay real estate commercial brokers”, and essentially went through 10-20 pages of Google, and whenever a website came up, I would open it up in a tab, and by the end of it I had 20 tabs open of potential brokers to work with.
I also searched for commercial brokers, real estate brokers, multifamily brokers on Bigger Pockets, and created a list of a handful of people there. Then I did the same thing on LinkedIn. Now, LinkedIn is gonna be a little bit harder, because there’s gonna be a lot of results… So I started doing it, I got through a couple of pages, and realized that most of the people that I came across worked for the companies that I already had opened in a Google tab. So I just used Google and Bigger Pockets, but LinkedIn is another source you could use as well.
Contact the Brokers and Get on Their Lists
Once I created my lists – I created the name, the website, the e-mail and the phone number… And I contacted the local team. For some of these brokers – they’re national brokerages, and I needed to make sure I actually found the Tampa Bay office, instead of just reaching out to the general phone number or general email address. And then obviously, for the Bigger Pockets or LinkedIn I would have reached out to the actual individual via direct message.
And here’s exactly what I’ve said to every single person, and I had a 100% response rate… This is exactly the email I sent to every single person. I said:
“My name is Theo Hicks, and I’m reaching out because my business partner and I are actively seeking multifamily opportunities in the Greater Tampa Bay Area. We both have previous apartment experience. I work with a 400 million dollar apartment syndicator, helping him with investor relations, co-authoring an apartment syndication book and managing a consulting program with over 80 active apartment syndicators, underwriting hundreds of deals in the process.
I also own a portfolio of multifamily assets in Cincinnati, Ohio. My business partner has a background in raising equity, we have our equity, debt, and management lined up, and now all we need is a deal. With that said, I was wondering if you could have one of your directors contact me, so that we can discuss our company’s investment parameters and business plan in further detail, as well as learn more about CBRE Tampa.”
Obviously, that last sentence is gonna change based off of the company and based off of the person that you’re reaching out to. I believe for this one I was reaching out to the office manager, so I asked her to direct me to a person that could help me.
Now, what’s important to include in your opener, and which I included here, is number one, you want to let them know what types of real estate you’re looking at and where; I mentioned I’m looking for multifamily in the Greater Tampa Bay Area. Also – and this is probably the most important – is to let them know about your experience; I let them know that I work with an investor, I’ve had investing experience myself, I work in a consulting program, I’ve written a book about this… And then I also talked about what pieces I already had in place. I mentioned how I already had equity lined up, I already had debt lined up, I already had a property management company lined up… So I wasn’t just reaching at random because I just randomly thought “Hey, I’m gonna start reaching out to brokers.” No. They read my statement and realize that I’ve put in effort, I’ve talked to investors, I’ve talked to mortgage brokers, I’ve talked to property management companies, I’ve got everything lined up and now I’m just ready to find a deal. All of this shows that I’m serious, educated and credible, and that I will have the ability to close on a deal.
Work with Qualified Commercial Brokers
Now, you should work with every qualified commercial broker that you find, because again, you want to work with as many brokers as possible, because the more brokers you work with, the more deals you will find. Because unlike the MLS, where all the real estate agents and brokers will post their listings there, most of these commercial brokerages will have their own listings service; their own website has their listings… So it’s not one centralized location for all of them, at least not something that I have found.
So you want to work with all the qualified brokers you can; make sure you get on their lists. Then, obviously, once you find a deal, you’re likely going to work with that listing broker until you close, as well as, again, on the back-end when you sell the property. But ultimately, it’s up to you; you can work with one broker, you can work with as many as you want… You can work with one broker on the front-end and a different broker on the back-end, but this is just kind of the general recommendation of what you should do.
Now, before we get into the qualification process and how to actually win these brokers over to your side, so they start sending you off-market deals, I wanted to quickly discuss how they actually get paid. Real estate brokers are paid via commission, and a good rule of thumb is to expect to pay them or expect for them to be paid by the seller 3% to 6% of the purchase price if the apartment is less than 8 million dollars. If it’s over 8 million dollars, expect some sort of flat fee of around 150k. Typically, the seller is the one who’s paying these fees, so when you’re selling the property and when you’re underwriting the property make sure that you are accounting for this fee in your disposition summary.
How to Choose and Qualify a Real Estate Broker
Now, how do you actually qualify a broker? Your goal of these broker conversations, after you’ve done that initial introduction script that I mentioned – you’ll likely hop on a call with them and have a kind of informal interview of them, and they’ll also be interviewing you at the same time. The goal for you is to determine the broker’s level of experience, as well as their success with apartment communities that are comparable to the types of deals that you actually want to invest in.
If you’re a value-add investor, you want to find a real estate broker who finds and lists value-add deals, because obviously, that will increase the chances of you finding a deal that meets your investment criteria… Because what you’ll notice when you start searching for commercial real estate brokers is that not every single one lists value-add properties, let alone multifamily. For example, you will come across some that really only list retail, or only list offices, or land, or self-storage, but they don’t really focus on apartments… So even if they list one apartment a year, you should probably subscribe to their list, but when you’re interviewing them, the ones that focus more on multifamily (and particularly value-add multifamily) should get more of your attention than a brokerage who lists one multifamily property every year, and most of their stuff is office space.
Here is a list of questions to ask the broker – or at least these are questions you should ask yourself, and then find the answers to them, whether it’s from actually asking the broker or doing some investigations on their website. And again, just like I said in the previous episodes, when you’re talking to them don’t just run down this list and robotically ask them every single question; bring them up more organically, and do some research before you actually speak to them to find the answers to some of these questions first.
How Many Successful Closes Have They Had?
One thing you wanna know is how many successful closes they have done in the last 12 months, because obviously the more deals that they’ve done, the more experience they have and the more active they are… Which means you have a better chance of finding a deal that meets your investment criteria.
You’ll also want to know of those successful closes what were the average number of units. Again, does that align with your investment criteria? If they’re closing on an average of 20 units per close, and their investment criteria is 100 units, then that broker might not be the ideal fit for you, or at least you shouldn’t spend a ton of time working on that relationship as you would someone who averages exactly 100 doors per sale.
What Percentage of Their Deals Are Value-Add?
You also wanna know what percentage of the deals they list are value-add, for example, if that’s what your investment strategy is. Ideally, the majority of the deals that they list are in alignment with your investment strategy. If you’re looking for turnkey properties, then the majority of their properties listed should be turnkey, and same for value-add and distressed.
How Long Have They Been a Real Estate Broker?
You also wanna know how long they’ve been working as a real estate broker, as well as how long they’ve been focused on multifamily. Again, the longer they’ve been working, the more experienced they are.
Where Are They Located?
You also wanna know where they’re located, which you shouldn’t have to ask them that question. You should be able to find that online, ideally. And more of a requirement, your broker needs to be local to the market you’re investing in, or at least have a team nearby. If you’re investing in a smaller city or smaller market, then they should have an office in the closest big city. It’s gonna be difficult to work with a broker in Chicago if you’re trying to buy houses in Florida. It’s possible, but it’s gonna be more difficult than it would be to work with someone who’s actually local to Tampa because they’ll understand the area a lot better.
How Many Listings or Deals Do They Have?
You also wanna know how many value-add apartment listings – or whatever your investment strategy is – that they currently have, just to give you an idea of how many potential deals they list and you’ll be able to look at, keeping seasonality in mind. Usually winter, this time of the year, is when these things are the slowest. So if they don’t have a ton of deals listed for sale in the winter, don’t be too concerned; but if it’s in the middle of May and they have no listings, then that should be a concern, or at least a red flag.
What Is Their Typical Deal Timeline?
Also, you wanna ask them if they can walk you through a timeline of a typical deal, just to get an understanding of how that works… So how long after finding a deal do they usually have it listed for sale, how long from the time the property is listed for sale until they call us to offer, what’s the tour process, do they have an open house that you can go to, do you have to call ahead to schedule, and when you should go to the property, will you be able to see? And then also ask them what the offer process is – is there just going to be a call to offer, and that’s it? Is there gonna be a best and final sellers call? How does the offer process work?
You also wanna know how they actually find their deals. This is more for comparison purposes, so compare the way broker A finds deals to broker B, to see which one you should focus on building a relationship with more. You also wanna ask them what stage the local apartment market is in – is it a buyers or a sellers market? What are the cap rates and how are those trending? Are we at the top or at the bottom of the cycle? …just to gauge their understanding of the actual market.
What Do They Specialize In?
You also want to ask them what they specialize in. As I mentioned before, the term “commercial broker” means that they could focus on multifamily, retail, office, land, skyscrapers, condominiums… Any commercial real estate mentor that’s not single-family home, or I guess four units or lower, that could be their specialty. Ideally, they specialize in what your investment strategy is, so they specialize in multifamily, or more specifically, value-add multifamily.
How Do They Structure Their Fees?
You also wanna ask them how they structure their fees – what commission do they charge, and are there any other fees that are charged for using their services? You wanna know if there is anything in particular that they do differently than other brokers in the real estate market, for comparison purposes.
Do They Have a Property Management Company?
You also wanna ask them if they can provide you with a property management company, mortgage brokers, attorneys, accountants, referrals. Number one, that will obviously give you potential team members to interview, and that’s gonna be great — if they’re a really good broker, then they’re gonna give you really good referrals… But it also gives you an idea of how tapped into the market they are, and how tapped into the big players they are. If they don’t have any property management or mortgage broker recommendations, it’s not really a good sign. It shows they’re likely inexperienced.
Do They Offer On-Market and Off-Market Deals?
And then lastly, you want to know if they offer both on-market and off-market deals. So are all the deals listed the exact same? So they find them, they create a marketing package, and no one sees it until the sales package is listed, or is posted on their website? Or do they send the deals to a list of preferred investors first, as an off-market opportunity, before listing it on market? When you ask this question, follow up by saying that you completely understand that they’re not going to send you off-market deals until you’ve proven yourself. That’s the transition to the next part of this episode, which is how to prove yourself to the broker, how to win them over, and eventually have them send you their off-market opportunities, or at least increase your chances of being awarded the deal… Because brokers are going to be one of the best deal sources. They obviously aren’t going to send you these off-market deals right away, or really enthusiastically answer your questions until you’ve proven that you can fulfill their need, which is to obviously make money, and then make money by you closing on the deal. So don’t expect off-market deals, don’t expect brokers to instantaneously respond to your questions until you’ve proven yourself worthy to receive those off-market deals. To accomplish this goal, there’s a few things that you can do.
How to Hire a Real Estate Broker and How to Set Yourself up for Success
Here’s a list of things you need to do before you even reach out to these brokers, to set yourself up for success.
Have a Property Management Company
Number one is to have a property management company, or at least have an idea of who you’re gonna work with. You don’t need to have a signed contract or anything, but have an idea of at least one management company you can work with; having two or three is even better. That way they have an idea of who is going to manage the deal after it’s closed on.
Have a Mortgage Broker or Lender and Passive Investors
You also want to have a mortgage broker or a lender, so they know how you’re going to fund the deal, and that you are qualified for financing. You’re also going to want to have verbal commitments from your passive investors. That way, they will know how you’re going to fund the loan down payment, the renovations and the other fees associated with closing on the deal.
Have Your Mentor or Consultant Handy
Lastly, you’re gonna want your mentor or consultant, because assuming you haven’t done a deal before, you’re going to need to leverage their experience, expertise and credibility with the real estate broker. Those are the four things you need to do before you even make your list and start reaching out to brokers.
Bring up Your Relevant Experiences
Once you’ve done those four things, then when you’re actually interacting with brokers, in that initial conversation – and ongoing conversations – first you want to bring up your relevant experiences… So what have you done in your past that will show a broker that you’re serious about closing on a deal? This could be real estate experience, this could be non-real estate experience, so business success, if you’ve gotten a ton of promotions, you’ve managed this much money in sales… Then you could also obviously leverage your team’s experience as well.
Tell Them What You’ve Done
Then, of course, you wanna tell them what you’ve already done, just to show them, again, that you’re serious, that you’ve put forth effort already, and now you just need a deal to bring everything together… So who are your team members, who’s gonna fund the debt and what’s the debt going to be, what kind of terms can you get, how much can you qualify for, how much equity can you raise, and if you evaluated the market yet… Things like that.
Build a Personal Connection
Then lastly, work on building a personal connection with them, because that is the best way for them to trust you and for them to send you off-market deals. Obviously, you wanna do this genuinely. Joe’s go-to question is ask people what’s been the highlight of their week, but a lot of other people will build rapport with brokers by taking them out for drinks, having coffee with them, dinners and lunches, going golfing, things like that. So it doesn’t have to be strictly business, it can be some fun as well.
Winning a Real Estate Broker Over
Now, here are four other things that you can do to win over the broker without having to actually complete a deal. This is after you’ve found them, you’ve had the initial conversation with them, and you’ve told them about all the team members that you’ve brought on already, and your debt and equity… This is what you can do moving forward to start to build that connection with them, that trust with them.
Pay Them a Consulting Fee
Number one is just to pay them. You can offer a consulting fee of, say, $150 to $200/hour for their advice. Maybe you can say “Hey, can I pick your brain for half an hour and I’ll pay you $100?” Or “Hey, can you meet me at this property and take a look at it? I’ll pay you $200.”
Visit Their Recent Sales
Another thing you do is to visit their recent sales. This is a very good tactic to show them that you’re serious. Ask them for a list of their ten most recent sales, and then actually drive to those properties, drive around the property; if you want to, you can act like you’re a tenant and actually go into the units, but I personally just drove around the outside of the properties and looked at the exterior conditions, then I went online and looked at the interiors, looked at the rents… I essentially did a very high-level analysis of the property, and then I followed up with the broker, creating a pros and cons list as it relates to how that property compares to the type of property I wanna buy. In doing so, one, it is helping me learn more about the market and the types of properties this broker lists. Number two, it gives them the idea of the type of property that you want to buy, but number three, most importantly, as I mentioned, it shows them that you’re serious and that you’re putting forth effort and you’re not someone that just reached out, had that conversation and fell off the face of the Earth. You’re actually out there, boots on the ground, doing work.
Offer Them Information on How You Fund Deals
Also, you can offer them information on how you will fund a deal… Not how you find the deal – they’re finding the deals for you – but how you will fund the deal, so how much debt are you qualified for, who is your mortgage broker, how much equity can you raise, how will the compensation structure be for the GP and LP… And again, they wanna know that you can close, so if they know that you have enough money to close, then that’s just one more tick in the positive box for you as the investor, in the eyes of the broker.
Follow up With the Broker
And then lastly – and this is kind of general, and this could fall into the other categories as well – diligently follow-up with the broker. If they send you a deal, underwrite it right away, and then reply back to them with their feedback within 24-48 hours. Go and visit the actual comps that they selected and give your feedback on those right away. If you do a property tour with them, don’t take multiple days to get back to them with any follow-up questions or feedback. E-mail them right when you get home. If you bring on a new team member, let them know; if you’ve just found a big investor, let them know. Anything that points to you getting closer to completing a deal, let the broker know. Again, it shows that you’re serious, but also, you don’t wanna go weeks at a time without contacting the broker, because then they’ll completely forget about you, so… These are ways to constantly stay in contact with that broker.
How to Choose a Real Estate Broker and What Questions to Expect From Them
Now, we’re running a little bit over, so I’m gonna quickly go over this last section, which are questions that you should be prepared to answer, because obviously, the broker is interviewing you just as much as you are interviewing them… So really quickly, here are the questions that you should be prepared to answer from the broker.
Who is Your Property Management Company?
Number one is who is your property management company; they’ll wanna know who’s gonna manage the property once it’s been taken over by you, and if they’re credible. They’ll wanna know how many units this property management company manages, what’s the average building size, what’s the biggest building size, what types of properties do they focus on, and are they local? They’ll also wanna know who is your business partner and what their experience is. Essentially, they’re gonna wanna know about all of your team members – business partner, property management company, if you’ve got a consultant or a mentor, anyone else on the general partnership, they’ll wanna know about that.
Have You Purchased an Apartment Building Before?
They’ll wanna know if you’ve purchased an apartment building before. Obviously, if you haven’t, that’s where you want to leverage your team’s experience – your property management company, your partner, and/or your mentor or consultant, which is why you need those three things, because you’re gonna need to leverage their expertise and their experience.
What Types of Deals and Markets are You Looking For?
They’re also gonna want to know what types of deals you’re looking for, and they’re gonna want to see you be specific. If you just say “I’m looking for a 100-unit deal”, that’s not specific enough and it’s gonna show them that you don’t really know what you’re talking about. They’ll wanna know how many units, what’s the cost, what market are you looking at, what’s the asset type (A, B, C class), value-add, distressed, turnkey… They’re gonna want to know what age of construction, construction type, roof type, things like that. Be as specific as possible with your investment criteria to show them you know what you’re talking about.
They’re also gonna want to know what markets you’re looking into. Similar to the investment criteria, don’t just say “I’m looking in Tampa” or “I’m looking in New York.” Say exactly what submarkets you’re looking at, what neighborhoods you’re looking at… Again, it shows them that you know what you’re talking about.
How Will You Fund the Deal?
They’re also gonna wanna know how you’re gonna fund the deal, so that’s the debt and the equity… And then they’re also likely going to ask you if you are willing to sign an exclusive agreement with them, so they can get you the best deals. Now, out of all the brokers I’ve talked to, none of them have said this, but you might come across this, and we always recommend that you don’t sign an exclusive agreement, because then you’re pigeon-holing yourself to working with only one broker, which means you are limiting your lead pipeline.
Overall, when it comes to brokers — you’ve gotta keep in mind that these brokers are likely contacted by investors all the time, so kind of figure out what sets you apart by other newbie investors. And then also, don’t expect for them to send you off-market deals until you’ve proven yourself. And for both of those – what sets you apart and how to prove yourself – have been the sole focus of this episode… So now is time to get out there and assume you’ve got your bases covered, which means you’ve got your team in place, and you can start looking for brokers so you can start finding deals.
That concludes part three, where you learned the process for hiring a real estate broker, and in part four, the final part of the series, we’re gonna discuss the process for hiring the remaining three team members, which are the attorneys, the mortgage broker and the accountant, and then we’re also going to talk about what order to actually hire these team members in.
To listen to parts one and two, as well as the other Syndication School series about the how-to’s of apartment syndications, and to download your free team-building document, visit SyndicationSchool.com. Thank you for listening, and I will talk to you tomorrow.