by Theresa Bradley-Banta

Note: I am not a commercial broker nor is this post an advertisement for the services of any particular broker or advisory firm. This post covers my top advice for getting the best out of your relationship with a commercial real estate broker.

It also includes 10 great questions to help you hire a commercial broker.


Let’s be honest. Is it really possible or advisable to cut out the “middle man”?

  • A commercial broker can provide you with a wealth of information about local markets.
  • A commercial broker can provide you with many warm introductions.
  • A commercial broker can be your diplomat.

Have you ever heard a single-family investor say, “I save thousands in fees by cutting out the Realtor when I buy and sell investment properties!”

But is this wise? And does this hold true in the multifamily and apartment building investment world?

It’s always possible to find that rare property where you deal directly with a buyer or a seller. But it’s important to know that networking is one of the very best ways to source potential deals. You must network to find the hidden gems. You must network to learn the many nuances particular to submarkets. And you must network in order to build a great team.

Brokers understand the local apartment markets

A good commercial broker will know the history of the deals being done in local markets. They will know of the apartment building owners who have had success with their investments—and why. They are intimately familiar with:

  • Current and historical market vacancies.
  • Average rents and historical rents.
  • The sizzle that rents units: What amenities are in demand? Are renters looking for units with wood floors or in unit washers and dryers?
  • Supply and demand: A broker will know how many new apartment units are coming on line and whether or not the market can adequately absorb the new construction.
  • Which markets to avoid.

Caveat: Don’t stop with one interview. To fully understand a submarket plan to interview a minimum of 5 commercial real estate brokers who specialize in that market. Then follow-up your market research by interviewing 2 or 3 apartment building property managers who manage properties in that submarket.

Brokers know the service providers and the vendors in the local apartment markets

Networking with local apartment market brokers is your golden opportunity to obtain warm introductions to a very specialized class of contractors and vendors—those who work exclusively in the apartment industry.

Your broker can provide an invaluable service by referring and recommending the following specialists:

  • Apartment building inspectors and structural engineers.
  • Property management companies that manage apartment buildings exclusively.
  • Lenders who finance the majority of local apartment deals.
  • Contractors who handle repairs and maintenance on apartment buildings. This can include roofing; concrete and asphalt; and boilers and other major building mechanicals to name a few.

Great Tip: It is critical to know that some of your best apartment building deals may come from your personal relationships with these specialists. You must expand your connections in order to source your own deals.

A commercial broker can be an extraordinary diplomat

When you communicate with a buyer or a seller over complex issues such as negotiations, due diligence and property inspections your broker can act as the intermediary. This is especially crucial when you have delicate issues to present to a buyer or a seller. This alone can be the means by which a deal actually reaches the closing table.

Before committing to any brokerage relationship take some time to get to know the local brokers in your target markets.

Here are the questions to ask your commercial real estate broker—before you hire:

What apartment markets do you work in?

Most commercial real estate brokers specialize in specific submarkets. They do not list and market apartment buildings citywide particularly if they work in large metropolitan areas. Ask how long they have specialized in their markets of choice and why they like the markets they work in.

What apartment submarkets should I avoid and why?

To be a successful investor you must drill down to specifics on each apartment submarket you invest in. I have seen investors purchase properties in markets that the local property managers refuse to take on. It’s that important.

What types of apartment buildings are in your favorite markets?

This is especially important if you are new to a market. Have a discussion with your broker about the various property types in his/her markets. This will enable you to determine what you will need to do in order to be competitive.

  • Style: What types of properties are in the market? This includes building materials and construction; average property age; and unit types such as studio, one bedroom and two bedroom units.
  • Condition: Have most apartment buildings been upgraded? Is it common to find properties that may need significant upgrades and renovations?
  • Class: Are most properties older class B or C properties? Are the properties new, recently built Class A buildings? What amenities does each class offer?

What can you tell me about local apartment inventory?

Ask about the current supply and demand of existing rental units. Is there a shadow rental market such as single-family rental housing that could negatively impact occupancies in apartment buildings? What is happening on the construction front? A large uptick in inventory could negatively impact your property operations.

What stage is the local apartment market in?

Have a conversation about how the local market has performed over the past ten, fifteen and twenty years. Most real estate markets go through cycles of Recovery, Expansion, Hypersupply and Recession. What stage is your submarket in today and how will that affect your buying decision and exit strategies? How have the cycles affected your broker’s clients? What does he/she expect to occur over the next 10 years?

Can you tell me about local apartment deals that have closed?

Have a conversation with the broker about the deals he/she has personally closed and about those deals that were closed by his/her competitors. Who bought or sold those properties? What were the asking prices and the final sales prices? How long was each property on the market?

Which of your clients have done really well?

This may be one of the most critical questions you ask before you hire a commercial broker. The answers will definitely help you decide if this is the broker for you. Ask:

  • When did your client buy the property?
  • When did your client sell the property? Did they use him/her to sell?
  • What were their investment strategies and goals and did they meet them?
  • If they have not sold the property how are they doing with leasing, operations and cash flow?

Spend some time on this topic. If your broker has only done one deal…well, then you know. If he/she has done many deals drill down to how well their clients have done with their investments. This is also a great time to get referrals for the vendors and service providers those clients are using. For example, which companies are they using for property management, leasing, marketing, maintenance, renovation, etc.?

Who is financing local apartment deals?

This is fairly self-explanatory. Your broker should be able to put you in touch with lenders who are financing deals that actually close. Ask about the rates and terms that are being offered. Very important: Find out what types of deals are not closing and why.

Can you tell me about the current listings on the market?

This is more than likely the number one conversation your broker will want to have. Don’t let your conversation begin and end here. It’s natural that any broker you speak with will want to let you know about their listings but notice the question isn’t, “Can you tell me about your listings”? You are inquiring about all of the current listings on the market. Who has deals out there? Are properties selling or are they languishing on the market? What does the broker know about each listing? You may be surprised to find your broker knows a great deal about many of the properties within a submarket.

Can you provide the following submarket research?


  • Rent comparables: This is a study of market rents. What does each type of unit command in rents within a specific submarket? Ask your broker to include concessions in their research. For example are owners offering free rent, free utilities or reduced deposits in order to rent units?
  • Sold comparables: This is a list of recent apartment building sales. Be sure you receive all recently sold comps not just hand picked apartment building sales. If some properties sold below market you want to know about it.
  • Information on current listings: What does the broker know about each property? It’s history? It’s location? Who bought the property? Who brokered the deal? How much is the property listed for and is the seller likely to receive that price?
  • Local multifamily market research: Most brokerage firms offer detailed market and submarket reports. If your broker is part of a large national firm they may also offer nationwide apartment market reports.

Lastly, you will want to know all of the current and historical statistics for use in property analysis such as capitalization rates; gross rent multipliers; operating expense ratios; lender debt service coverage ratios; and more. This is a topic for another post. If you want information on the best analysis tools for screening real estate markets and apartment buildings you will find everything you need to know in my book Invest In Apartment Buildings Profit Without The Pitfalls.

Related Article

Using Apartment Building and Multifamily Property Listing Services to Your Advantage


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Theresa Bradley-Banta writes about investing in real estate while avoiding the pitfalls that plague many new investors. She is a 2017 PropTech Top 100 Influencer and winner of 14 American and International real estate awards for her website and real estate investing programs. As featured on: The Equifax Finance Blog, AOL’s Daily Finance, Scotsman Guide, The Best Real Estate Investing Advice Ever Show, Stevie Awards Blog, Rental Housing Journal, and Investors Beat among others.