Commercial Real Estate Brokerage Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Commercial Real Estate Brokerage Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Commercial Real Estate Brokerage business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
Your Business Planning Package will be available for download after your purchase.
Product Specifications (please see images below):
- Bank/Investor Ready!
- Complete Industry Research
- 3 Year Excel Financial Model
- Business Plan (26 to 30 pages)
- Loan Amortization and ROI Tools
- Three SWOT Analysis Templates
- Easy to Use Instructions
- All Documents Delivered in Word, Excel, and PDF Format
- Meets SBA Requirements
Commercial real estate is continually in demand among real estate investors that are looking to generate a very high return on their investment. It is well-known that the capitalization rates for a commercial property are significantly higher than their residential counterparts. As such, commercial real estate brokerages are able to source economically viable and profitable properties on behalf of their client base. These brokerages are typically able to generate commissions ranging anywhere from 5% to 7% of the face value of the transaction depending on whether or not the individual or the broker is an exclusive listing agent for the property.
The barriers to entry for a new commercial real estate brokerage are considered to be moderate. Usually, a real estate agent that wants to enter this field as a broker must have at least two years of experience in order to acquire the broker’s license. The startup cost associated with this type of business typically ranges anywhere from $50,000 to $100,000 which is primarily used for the establishment of an office, working capital, professional fees and licensure, and other related expenses to starting this type of real estate brokerage. The demand for the services typically remain strong in any economic climate given that real estate investors that are very well-capitalized are we seeking opportunities to acquire properties on the cheap.
Even during times of economic recession, commercial real estate brokerages are able to thrive as foreclosures happen and other matters that occur require the quick sale of commercial buildings. One of the nice things about owning and operating this business is that they are also able to provide some level of residential sales as it relates to apartment buildings, duplexes, triplexes, and other multifamily residential units. When difficult economic times occur, many commercial real estate investors will focus on acquiring large-scale multifamily properties in order to produce a stable amount of income on a month-to-month basis.
A commercial real estate brokerage SWOT analysis should be produced as it relates to the business plan and the marketing plan. As it relates to strengths, commercial real estate is almost always a produce revenues and profits given the continued demand among real estate investors to source high capitalization commercial properties. The startup costs are considered to be moderately well when the barriers to entry are conceptually moderately high given the experience required by the individual agent to establish a new commercial real estate brokerage. The gross margins generated from services typically range anywhere from 75% to 95% depending on whether or not underlying marketing costs are considered part of the cost of goods sold.
For weaknesses, these businesses are almost always insignificant competition with other real estate brokerages for listings. As such, it is imperative and incumbent upon the entrepreneur to develop a large-scale marketing apparatus that allows these businesses to quickly showcase listed commercial properties to potential buyers. This is expensive to establish but the usage of the Internet allows for much quicker viewing of properties on a daily basis.
For opportunities – many commercial realty brokerages will recruit highly talented agents that will work on behalf of the business. This is really the only way to grow given that there needs to be a significant amount of people on staff in order to accommodate a greater number of listings. Additionally, many commercial real estate brokerages will acquire already existing businesses in order to expand through nonorganic means. While this is an expensive way of growing, the results can be substantial provided that the owner can properly transition the business. One of the other ways that commercial real estate brokerages expand as well is by offering property management services to their clients. This is important to note because property management services can generate highly recurring streams of revenue on a month-to-month basis. In most states a business that is licensed as a real estate brokerage can act in a property management capacity without any further licensure required.
For threats, changes in regulations and real estate law can impact the way that these individuals conduct operations. However, real estate is one of the largest industries within the United States and it is very unlikely that substantial loss will change that would impact the way that he commercial real estate purpose operates.
A commercial real estate brokerage business plan should be produced that showcases the anticipated profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. This financial statement should be developed over a three year to five year period. One of the most important things to note within the business plan will be the sporadic nature of the company’s revenues given that brokerages operate on a commission basis. Also included within the business plan should be a discussion regarding injury research. In 2019, commercial real estate brokerages are expected to generate nearly $72 billion of revenue. The industry employs over 1 million people and has provided payrolls in excess of $50 billion in each of the last five years of operation. The growth of this industry is expected to remain strong over the next 3 to 5 years as interest rates have remained low and the opportunity for profitable investments remains very strong among commercial real estate investors.
Also included in the business plan should be a demographic analysis of the types of buyers be targeted by the business. This includes discussing the net worth and capitalization base of the real estate investor, age, annual revenues, annual profits, and the number of properties at these businesses by on a year-to-year basis. This information can be easily sourced from a number of online channels as well as by doing local research.
A commercial real estate brokerage marketing plan also needs to be developed as well and this is one of the most important aspects of the company’s startup documentation. As discussed above, real estate is a highly competitive field – and as such, it is important that a very large scale encompassing marketing plan is developed so that the business can quickly showcase properties to properly qualified buyers. Foremost, the business should have an expansive online presence not only through a proprietary website but also for major social media platforms as well. It is common for a commercial real estate brokerage to maintain pages on FaceBook, Twitter, Instagram, LinkedIn, Loopnet.com, the multiple listing service, and many other platforms that allow for individual will say programs to post listings of properties for sale. In many cases, a new commercial real estate brokerage will hire or outsource a social media manager in word to ensure the maximum visibility for both the business, its agents, and properties that are being listed for sale. One of the nice things about being a licensed broker is that they are now a number of platforms that allow only licensed brokers to post properties for sale on the platforms. This is one of the ways that a commercial Realty programs can effectively differentiate itself from other competitors within the market.
The company’s proprietary website should be expansive and allow for the easily upload of images, and other information regarding properties that are for sale. This website should be made listed among all major search engines with a specific focus on Google, Bing, and Yahoo. A search engine optimization firm can be hired in order to ensure that the commercial brokerage website can be found easily when a regional or local searches done for commercial properties for sale. Although this process is lengthy, expensive, and does take a significant amount of time – the results can be significant as it relates to the return on investment for the marketing budget. These days it is almost imperative that a qualified pay per click and search engine optimization firm are hired in order to ensure maximum visibility for the business.
One of the other ways that many commercial real estate brokerages are able to generate revenues immediately is through the ongoing relationships with other brokers. In most sales are two agents one representing the buyer and one representing the seller. As such, most real estate agents and brokers have significant contacts within the industry so that individuals can source potential buyers for properties very quickly. It is important that the owner operator maintain an extensive database of contacts and referrals so that when a property comes onto the market and is listed by the brokerage it can be easily sourced to a buyer via a third-party agent.
Commercial real estate is one of the most exciting aspects of property investing and will remain so for the foreseeable future. As such, commercial real estate brokerages really do not face any level of risk as it relates to the day-to-day operations of this business. Although interest rates are rising the high capitalization of the commercial real estate parcel ensure that these businesses can remain profitable at all times. The demand among individual investors to have a qualified commercial real estate broker operate in conjunction with them is significant as well and will remain so.