It might sound crazy but there are certain things commercial
real estate brokers have to do to thrive in their career and if they don't do them
it's not that they just won't do well but they could end up having no career at all.
So in this video i'm going to show you a number of things you can do and after watching this
you'll be ready to go off and make more money. I'll start by making a few general points first
I'm going to use broker and agent interchangeably as the actual definitions vary market to market
i'm in a market where we're technically agents but most people refer to themselves as brokers
so if i say broker or agent i'm really just referring to someone who's licensed to sell
or release commercial real estate second industrial real estate which is the focus of my
channel is a subcategory of commercial real estate the other main subcategories are office retail
multi-family and land this is very important to note and i'll explain why in more detail shortly
the vast majority of commercial real estate deals are done through commercial brokerages which trade
exclusively in one of these asset classes there are some great agents that work at residential
offices which can be successful in commercial real estate but the international regional and
boutique commercial real estate brokerages account for large percentages of the deals that get done
next most commercial real estate agents are 100 commission based i'll elaborate on this more as
it's common in the industry for new agents to earn a small salary when they first get started though
but if you want to make a lot of money you'll need to do it through earning commissions
lastly your personal situation will be unique so take everything i say with a grain of salt
i'm trying to address this video for new commercial agents as a whole but i recognize
everyone will approach this differently my goal with this video is simply to provide
some insights into the process and equip you with some questions you might want to ask along the way
or should i say questions you should ask along the way so with that in mind i'll introduce you to
one of the biggest paradoxes in the industry and that is that every commercial brokerage puts an
emphasis on recruiting new agents yet it is still difficult to get hired let me unpack that a bit
and this will also help tie together a few of the earlier comments that i made
the commercial real estate industry operates similar to other professional industries such as
law or accounting and this is where the firm takes a percentage of everything the professional earns
in most large brokerages the firm will take 50 percent of the agent's gross revenue
and this usually decreases as production goes up it varies across markets but it's not uncommon for
a brokerage to take 50 up to call it 250 000 in production then reducing it to 40 up to another
threshold with potentially going even to 70 30 80 20 or considerably a hundred percent to the agent
although that's not overly common let's set up a hypothetical situation so that this sinks in
let's say the brokerage splits are as follows 50 50 to 250 000 60 40 to 500 000 70 30 over 500 000
if an agent does 250 000 in gross production the agent would pay 125 000 to the brokerage
and keep 125 000 for themselves keep in mind that these numbers are also pre-tax if the
agent did six hundred thousand dollars in production in this particular brokerage
the splits would be as follows two hundred fifty thousand dollars times point five
equals a hundred and twenty five thousand two hundred fifty thousand times point six equals a
hundred fifty thousand one hundred thousand times point seven equals seventy thousand
i have to emphasize this is only an example and every brokerage will have unique splits
but in this case the agent would keep three hundred fifty thousand dollars and the amount
going to the brokerage would be two 250 000 so naturally you'll want to ask any brokerage you're
considering what their splits are not only will this tell you how much you'll keep but also tell
you how much you'll be paying the brokerage on your production this reveals why brokerages focus
so heavily on recruiting hiring developing new agents is not only necessary for the long-term
sustainability of the brokerage but high producing agents also bring in a lot of revenue to the firm
obviously i don't speak for every brokerage out there but i believe most brokerages will have
a few common objectives when hiring new agents one the agent has the potential to be a revenue
producer two the agent will follow the rules that is though they won't cause any issues or embarrass
the brokerage and three the agent will be a fit with the office culture brokerages will want to
ensure you're a good fit but don't neglect to evaluate whether the company will be a good fit
for you as well and to determine that here are a few things that i'd recommend you try to flush out
first ask what asset class you'll be working in and whether you'll be doing sales leasing
or perhaps even both most brokerages will want you to specialize in a particular asset class
so ask early if you want to work in a specific area or if you have an option to even choose
you may not have any say in the matter and it may turn out that you really enjoy the one you end up
getting into in the first place but at the very least this is something you should find out in
advance there may be a number of reasons why a brokerage would want you to go into a specific
asset class but i think the two main reasons are that they're trying to grow that particular area
of their business or there's a senior broker who needs help on their team this leads to the next
point of finding out in advance who you'll be working with and i can't emphasize this enough
if you get paired up with the wrong broker you will hate your job i'm gonna do a live stream
next week on this topic and i'm gonna tell a handful of horror stories about this very subject
but make note of this this might be the single biggest factor that will make or break your career
if i was starting all over again i would want to know who the senior broker is and also learn about
their track record of developing other brokers if i felt i had leverage in the situation i
would even want to meet with the senior broker and other members of the team to see if there is a fit
i will caution you that asking questions like this might cause some ripples and a brokerage looking
to hire an agent might just go down the path of least resistance and hire someone who isn't
asking these questions it boggles my mind how many new agents join a brokerage without asking these
questions though on the topic of giving yourself the best chance for career success i would
also ask the brokerage about the services and support they provide the brokerage will be taken
a percentage of your earnings so you want some comfort that they'll be supporting you along the
way they might willingly offer you this during the interview but flush out what technology they use
what the support staff offers you in terms of marketing and administration
as well if they have any training programs or incentives to complete industry designations such
as the ccim or sior designation imagine talking to two different brokerages only to learn after you
made your decision that one has a robust training and development platform while the one you chose
did not if you've watched any of my other videos you'll know that i'm earnestly trying to provide
as much value as i can without making this channel about me to that extent i don't know if i've ever
even mentioned the company i work for nor the city i even live and work in and don't worry
i'm not going to start now either but i just want to mention that our company has over 300 offices
all over the world and i can't guarantee anything but i'd be happy to make an introduction for you
if we have an office in your local market just shoot me an email at griffisscre gmail.com
and i'll line it up for you even if it doesn't lead to a job opportunity at the very least you'll
have another person in the industry that you can ask questions to as i mentioned earlier i'm going
to do a live stream on thursday november 18th at noon eastern time i'll go into this topic in
much more detail and we'll also be able to answer any questions that you have one thing that you'll
want to know is what happens if you're starting as an assistant how long does that program last
what's the salary what are your expectations as an assistant and what they're going to teach you
along the way i'll address this and other points in that live stream next week i'll close with
this last point if you're on the fence about this industry i can't think of another career
that i would have enjoyed over this past 16 years as much as this one i absolutely love the
process of taking a deal from start to finish and having some success in this business has allowed
me to build out my own portfolio of industrial properties there is no guarantee for success but
everyone has the potential for it to maximize your chances of success i'd highly recommend
you choose the right brokerage at the beginning thanks for watching remind her to check out that
live stream on november 18th if you want to hear more see you in the next video yeah that's good