1
Q
Tier I investors (Institutional)
A
Tier I investors are institutional investors: organizations that buy repeatedly, follow a disciplined process and have professional underwriting and capital markets access. They typically operate with an investment committee or formal approval path, and they measure decisions by risk and return rather than personal relationships.
2
Q
Characteristics you can often observe
A
- Clear buy box and consistent behavior.
- Sophisticated underwriting and strong market knowledge.
- Strong access to capital and financing relationships.
- High credibility with brokers because they perform.
3
Q
How to work with Tier I
A
- Be precise. Bring them opportunities that fit.
- Respect their time. Do not oversell. Give facts and risks.
- Build trust by being consistent and candid.
4
Q
Tier II investors (Professional)
A
Tier II investors are professional investors: experienced, business-minded buyers who may be smaller than institutions but still operate like pros. They tend to have a defined strategy, repeatable underwriting habits, and the ability to execute—though their capital sources, speed, or discipline can vary deal to deal.
5
Q
Characteristics
A
- A defined strategy, but not always disciplined.
- Underwriting is decent but can be influenced by optimism.
- Financing is available but may be deal-specific.
- Communication is generally good, but performance varies.
6
Q
How to work with Tier II
A
- Educate without lecturing. Provide context and comps.
- Set expectations early: timelines, deposits, diligence.
- Watch for “soft commitment” and test conviction.
7
Q
Tier III investors (Non-professional)
A
Tier III investors are non-professional investors: individuals or occasional buyers who may be new to commercial real estate, inconsistent in criteria, or highly emotional in decision-making. Some become great clients over time, but early on they often require more education and create more execution risk.
8
Q
Characteristics of a Tier 3 Investor
A
- Vague buy criteria, or criteria that changes constantly.
- Underwriting is shallow or inconsistent.
- Financing is uncertain or not pre-arranged.
- High emotional variance and negotiation noise.
9
Q
How to work with Tier III
A
- Keep interactions efficient.
- Do not let them consume prime time.
- If you engage, require proof of funds or proof of capital sources.
- Use them carefully: sometimes they can be useful as backup demand, but do not anchor strategy around them as you progress in career.
10
Q
Tier 1: Institutional Investors in the San Antonio MSA
Seek confirmation from official company intel.
A
- Institutional capital in San Antonio is primarily deployed through pension funds, REITs, national private equity, and life insurance companies.
- Marcus & Millichap’s Institutional Property Advisors division serves this tier on deals above $20M.
- In Q4 2024, institutional capital returned to San Antonio’s multifamily sector, with nine transactions of 200+ units occurring in that quarter alone — signaling renewed confidence after a cautious period.[8][11]
11
Q
San Antonio–Specific Patterns Deal size: $20M–$100M+ per asset.
Seek confirmation from official company intel.
A
- In San Antonio, this typically means Class A or large Class B multifamily communities (200– 400+ units), institutional-grade self-storage portfolios, and large industrial acquisitions along the I-35 corridor.[12][13]
- Preferred submarkets: Stone Oak, The Rim/La Cantera, Northeast I-35 corridor (New Braunfels/Schertz), and Northwest San Antonio — areas with strong demographics, high-quality housing stock, and proximity to employment centers.[7][8]
- Asset class focus: Overwhelmingly multifamily. San Antonio’s multifamily investment market saw 32 transactions totaling 6,036 units through Q3 2025, with total sales volume of approximately $55M and average pricing of $94.3K per unit and $100 per square foot.
- Institutional buyers are also active in self-storage, net-lease retail, and Class A industrial.[14][9][13]
- Current strategy: Acquiring stabilized or lightly distressed multifamily at a discount during the supply correction. The pipeline of units under construction dropped 76% from its 2023 peak, positioning the market for strong rent growth in 2027– 2029 — exactly the thesis institutional buyers are underwriting today.[15][8]
12
Q
Institutional Activities You’ll See as a Broker
Seek confirmation from official company intel.
A
- IPA-level engagement: these deals flow through Marcus & Millichap’s IPA division, often in collaboration between the San Antonio and Dallas offices.
- Extensive data requests before touring — trailing 12-month financials, submarket supply/demand data, concession reports, and comp sets.
- Long decision timelines, but large commission checks when they close. Post-close: institutional owners bring professional third-party management (Greystar, LYND, ZRS, etc.) and do not self-manage.
13
Q
Tier 2: Professional Investors in the San Antonio MSA
Seek confirmation from official company intel.
A
- This is the backbone of the San Antonio investment market and Marcus & Millichap’s core client base.
- Professional investors here include high-net-worth individuals who own 5–20+ properties, local family offices (many tied to healthcare, construction, or auto dealership wealth), experienced syndicators (like REEP Equity and similar local operators), and regional private equity groups.
- They transact in the Private Client Market ($1M–$10M) and Middle Market ($10M–$20M).[18][11]
14
Q
San Antonio–Specific Patterns for Professional Investors
Seek confirmation from official company intel.
A
- Deal size: $1M–$20M, with the sweet spot at $2M–$8M.
- This captures 50–150 unit multifamily communities, strip centers, small industrial properties, and self-storage facilities.
- Property type breadth: professional investors in San Antonio are active across all asset classes — multifamily, retail strip centers, industrial ex/shallow bay, self-storage, and net-lease retail (QSR, auto parts, dollar stores).
- Many target value-add multifamily: 1970s–1980s vintage properties where light interior and exterior renovations can push rents.[17]
- Geographic range: Active across all San Antonio submarkets, including areas institutional buyers won’t touch — Inner West Side, South Side, East Side, and emerging corridors like the Far West Side along Potranco Road and Highway 90. Their local knowledge is their edge.[19][20]
15
Q
Professional Investors Processes Specific to San Antonio
Seek confirmation from official company intel.
A
- Sourcing: Broker-driven. Professional investors in San Antonio maintain relationships with 2–5 brokers across rms (Marcus & Millichap, CBRE, Foresite, Partners, local boutiques).
- They expect proactive deal flow — not just listed inventory but off market and pre-market opportunities.
- Underwriting: Quick and competent. They understand San Antonio cap rates by asset class — retail at 6.7–7.0%, industrial at 7.2–7.6%, multifamily Class B at 5.0–5.2% — and can assess whether a deal pencils within hours.
- Value-add execution: Many professional investors in San Antonio specialize in acquiring distressed or underperforming assets, renovating units, improving management, and stabilizing at higher rents. Marcus & Millichap’s recent sale of The Alto — a 1980s-vintage multifamily that achieved the highest per-unit pricing for its vintage in 2025 — is a textbook professional- investor play.
- Financing: Pre-existing lender relationships with regional banks (Frost Bank, Broadway Bank, Jefferson Bank), agency lenders through M&M Capital Corporation (MMCC), and bridge lenders for value-add deals.
- Decision speed: 7–30 days from receiving a package to submitting an LOI. They tour quickly and often make o ers within a week.
16
Q
Tier 3: Non-Professional Investors in the San Antonio MSA
Seek confirmation from official company intel.
A
- Non-professional investors in San Antonio are first-time or early- stage commercial buyers. This tier is large and growing, driven by several San Antonio–specific c dynamics:[11] Military families stationed at JBSA who purchased a home, kept it as a rental after PCS (permanent change of station), and are now looking to scale into a small multifamily or commercial property.
- San Antonio’s military community of 80,000+ creates a steady pipeline of accidental landlords.[2][3]
- Healthcare professionals earning stable incomes at the South Texas Medical Center, Methodist, Baptist Health, or Brooke Army Medical Center who want to diversify into real estate for passive income.
- Small business owners — restaurant operators, auto shop owners, contractors — who want to own the building they operate in or acquire a neighboring property.
- California/out-of-state transplants who sold a primary residence in a high-cost market and have $200K–$500K in equity they want to deploy into San Antonio investment property, often drawn by Texas’s zero state income tax.[26][23] Austin spillover buyers priced out of Austin’s investment market who can find cap rates 50–150+ bps wider in San Antonio for similar asset quality.[5]
17
Q
Non-Professional Investors: San Antonio–Specific Patterns
Seek confirmation from official company intelligence.
A
- Deal size: $200K–$3M. Small multifamily (2–20 units), single- tenant retail (taco shops, barbershops, nail salons), mixed-use buildings, and small strip centers.
- Preferred submarkets: Tend to invest close to home or where they feel comfortable — Northeast San Antonio, the Medical Center area, Alamo Heights periphery, and increasingly the Far West Side (Potranco/Highway 90 corridor) where price points are still accessible.[20][19]
- Motivation: Highly personal. Retirement income planning, building generational wealth (a strong cultural driver in San Antonio’s large Hispanic community), transitioning from residential landlording to commercial, or deploying proceeds from a California home sale.[23][26]
- Risk profile: Conservative. They prefer stabilized, cash- owning properties and are uncomfortable with vacancy risk. Many want “mailbox money” — monthly rental income with minimal effort.
- Knowledge gaps: May not understand cap rates, NOI, commercial lease structures (NNN vs. gross), 1031 exchanges, or the difference between residential and commercial lending.
18
Q
Non Professional Investors: Processes Specific to San Antonio
Seek confirmation from official company intel.
A
- Sourcing: Reactive. They find properties on LoopNet, the Marcus & Millichap website, or through a referral from a residential agent who doesn’t handle commercial. Some respond to Marcus & Millichap’s outbound prospecting calls.
- Education phase: Significant and unavoidable. You will spend time explaining how commercial properties are valued (income approach, not comps), what cap rates mean in San Antonio’s current market, how NNN leases work, and why a 7.0% cap rate retail property might be a better investment than a 5.0% cap rate multifamily.[6][24]
- Financing: This is often the biggest hurdle. Non-professional investors may not have a commercial lending relationship. They default to their residential mortgage broker, who cannot help. You need to connect them to MMCC or local banks that o er SBA 504 loans, portfolio loans, or seller financing for smaller deals. Frost Bank, Broadway Bank, and local credit unions are common starting points in San Antonio.
- Due diligence: They need hand-holding. Environmental concerns in San Antonio (particularly near former military sites like Kelly AFB, now Port San Antonio) are real and must be addressed.
- Property tax reassessment risk is another area — Bexar County Appraisal District is aggressive, and non- professional investors often don’t budget for post-purchase tax increases.
- Decision timeline: Long and unpredictable. They may take 2–4 weeks just to decide to tour a property, then another 2–4 weeks to submit an o er. Patience is required.
19
Q
Non-Professional Investor Activities You’ll See as a Broker
Seek confirmation from official company intel.
A
- High-touch, time-intensive client management. Expect multiple calls and meetings before a deal materializes.
- Emotional decision-making: they fall in love with a building’s aesthetics rather than its nancials, or they walk away over a $5,000 repair issue a professional investor would negotiate through.
- Price and commission sensitivity: they may balk at a 6% commission because “their residential agent charges 3%.” Educate early on the value of investment brokerage representation.
- Slow response times — they have day jobs (nurse, military o cer, small business owner) and real estate investing is not their primary focus.
- But the lifetime value is enormous: a military family that buys a $500K fourplex through you today will, if well-served, scale to a $5M multifamily deal within 5–10 years. This is Marcus & Millichap’s flywheel — the firm’s platform is designed to grow with these clients from their first deal to IPA-level transactions.
Pre Training Workbook Class
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