Here's how to generate Commercial Real Estate’s Easiest Money
Some of the easiest revenue you can create for yourself as a CRE agent is referral fees. Yet when I talk to agents, most of them have earned little, if any, referral income. Earning this extra income takes very little effort, and in the end it can add up to a nice increase in your revenue.
Here are the six places I'd go if I were starting from scratch today.
Start with Your Own Firm
If you're at a big national firm, this one's sitting right in front of you.
This one is a bit of a no-brainer, but when I talk with agents, I hear that some will simply tell a potential new client, "That's not my asset class." What they should say is, "I'm not the best agent to help you with that, but I'll connect you with the best in that asset class in your market." Most big firms make it easy to send deals around and split the fee. I always suggest you know what those referral fees are in advance, even when it's within your own brokerage firm.
Plug Into a Referral Network
Now, what if you're at a boutique or regional firm and there are no out-of-area offices to refer to? That's where a referral network comes in.
Here's how I think about it. Your client calls and says they need a warehouse in Phoenix. You could Google "Phoenix industrial broker" and cross your fingers. Or you could call a broker you already know is good, because somebody vetted them for you. One of those feels a lot better when it's your client on the line.
And it goes both ways. When that Phoenix broker's clients need something in your market, guess who they'll call?
That's honestly why I started the CRE Affiliate Network. I kept hearing from independent brokers who were losing out-of-state deals just because they didn't know anybody there. That's a silly reason to lose a deal.
Don't sleep on your associations either. CCIM, SIOR, ICSC, NAIOP, AIR CRE. Go to the events, grab a drink, swap cards. Do that for a few years and you'll have somebody to call in almost every market.
Make Friends with Residential Agents
If I had to pick one source most commercial agents are ignoring, it's this one.
Think about who residential agents hang out with all day. Dentists. Doctors. Contractors. People who own restaurants and landscaping companies. People with money and real estate.
Sooner or later, a lot of those folks need commercial help. Like the couple with four rental houses who are sick of fixing toilets and want to 1031 into a NNN property. Or the dentist who's tired of paying rent and wants to buy her own building. Most residential agents would love to send you that deal. They just don't know you exist.
And your commercial clients buy houses too, so you've got something to send back.
So how do you get started? I'll tell you my guilty pleasure: I hit a few open houses most Sundays. I tell the agent I'm just a nosy neighbor, work into the conversation that I'm in CRE, and get their card. Later, I send them a nice email thanking them for letting me tour their open house and letting them know that if they ever need any CRE help, I'd be happy to assist. You can also ask a local residential office if you can do a quick 15-minute talk at their sales meeting about the commercial deals hiding in their client list. They're always looking for speakers.
Once the deals start coming, take care of them. Agree on the fee up front, and be generous about it. Keep them posted along the way, because residential agents hate feeling like their client fell into a black hole. And pay them the day you get paid. Nothing gets you the next referral faster.
Don't Forget the Lenders
This one kills me. Many of the deals you work on need a loan. Acquisition, refi, bridge, you name it. And what do most agents do? They text the client a lender's name and move on.
Stop and think about that for a second. You found the client. You built the trust. You brought them the deal. And somebody else gets paid for setting up the money.
In commercial real estate, it's pretty common for lenders and mortgage brokers to pay a fee to whoever brings them the loan, depending on how it's set up and what your license allows. So get to know a few good ones: a local bank, an SBA lender, a debt fund, and a mortgage broker who can shop the whole market. Then just ask them, "How do you work with brokers?" They hear that question all the time.
If your firm has its own capital advisory or finance team, even easier. Keep it in-house and share in it.
One thing, though. Never let the fee pick the loan. Your client needs the right financing, period. Do right by them and the money takes care of itself.
Get to Know a Couple of Property Managers
Here's one people don't think about. Many times when your client buys an investment property they want someone to manage it. And a lot of property management companies will pay you a referral fee for bringing them a new account.
I also suggest talking to them about referring business to you. Many of them will have a clause in their contract saying they'll be the one to sell the property. But you can work out a deal in advance: if you bring them a client and that client later sells, you get the listing. DO THIS ALL IN ADVANCE, IN WRITING!
Team Up with Business Brokers
This is one we've done for years, and it's truly easy money. We have a great relationship with a business broker, and we usually have multiple deals referred to them at any given time.
When a business sells, there's almost always real estate in the mix somewhere. The buyer needs a new lease. The seller owns the building. Maybe it's set up as a sale-leaseback.
A lot of business brokers don't do real estate at all, and they need someone to handle that part. That's you. Get to know a few in your area and you'll start getting pulled into deals you'd never have found on your own.
And when one of your clients says, "I'm thinking about selling the whole company," now you know exactly who to call. One of our agents once referred a deal to a business broker. It was a fairly large deal and took over a year to get done. Our agent had forgotten all about it, and then the check came in. That was a very happy day for that agent.
A Few Ground Rules (So Nobody Gets Mad Later)
I love referral money. I've also seen it wreck friendships when people get sloppy. So a few quick rules.
Put it in writing. Before you make the intro, sign a simple referral agreement. Who's the client, what's the deal, what's the fee, how long does it last? It takes ten minutes, and it saves you from the "wait, I thought we said 25%" conversation a year from now.
Pay through the brokerage. In most states, real estate referral fees have to go broker to broker. No cash, no side checks, no Venmo.
Check the rules before you take a fee on something new. Loans, management contracts, and business sales can each come with their own licensing rules, and they're different state to state. A quick chat with your managing broker goes a long way.
Tell your client. If you're getting paid for a referral, say so. Clients almost never care. What they care about is finding out on their own later.
Final Take
Most commercial agents get paid one way: list it, lease it, sell it. That's the business, and it always will be. But the agents I've watched build the biggest books? They've also got money coming in through the side door.
And none of this costs much. A few phone calls. A few cups of coffee. And the habit of taking really good care of the people who send you business.
Here's my challenge. Pick two from this list. Sometime this week, call one person in each and just ask, "How can we send each other more business?" That's it. I'd bet one of those calls turns into a check before the year's out.
Joe Killinger is a partner at Commercial Brokers International and founder of the CRE Affiliate Network. Come hang out with me on YouTube, Instagram, and X at @JoeKillinger, and check out more at joekillinger.co.
