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Commercial Real Estate

Discussions about real estate tend to focus on residential real estate; commercial real estate, except to seasoned investors, typically seems to take a back seat. However, commercial real estate is also a great option for investing in real estate.

Commercial real estate includes a large variety of property types. To a majority of people, commercial real estate is only office complexes or factories or industrial units. However, that is not all of commercial real estate. There is far more to commercial real estate. Strip malls, health care centers, retail units and warehouse are all good examples of commercial real estate as is vacant land. Even residential properties like apartments (or any property that consists of more than four residential units) are considered commercial real estate. In fact, such commercial real estate is very much in demand.

So, is commercial real estate really profitable? Absolutely, in fact if it were not profitable I would not be writing about commercial real estate at all!! However, with commercial real estate recognizing the opportunity is a bit more difficult when compared to residential real estate. But commercial real estate profits can be huge (in fact, much bigger than you might realize from a residential real estate transaction of the same size).

There are many reasons to delve into commercial real estate investment. For example you might purchase to resell after a certain appreciation level has occurred or to generate a substantial income by leasing the property out to retailers or other business types or both.

In fact, commercial real estate development is treated as a preliminary indicator of the impending growth of the residential real estate market. Therefore, once you recognize the probability of significant commercial growth within a region (whatever the reason i.e. municipal tax concessions), you should begin to evaluate the potential for appreciation in commercial real estate prices and implement your investment strategy quickly.

Regarding commercial real estate investment strategies it is important that you identify and set investment goals (i.e. immediate income through rental vs later investment income through resale) and that you know what you can afford and how you will effect the purchase.

It would be wise to determine your goals then meet with your banker (or financier(s)) prior to viewing and selecting your commercial real estate.

Your commercial real estate investment strategy was devised around purchasing vacant land, you might find it more profitable to buy a property such as a strip mall or small plaza that you can lease to retailers or a property that you can convert into a warehouse for the purpose of renting to small businesses.

Commercial Real Estate

Purchasing commercial real estate is a much more complex process more so than purchasing a home or just purchasing land. But, it doesn’t have to be so difficult. One of the best decisions that you can make is to higher a real estate agent that specializes in commercial real estate sales.

This individual should have experience in working with the type of property that you are interested in buying or selling. There is more to take into consideration, after all, than just the value of the building and the land.

A commercial real estate agent will help you to purchase real estate for a business or for rental property by doing his homework. It is essential for him to determine if the area is worth the cost that is being asked for it.

If the value of the land and building are not going to benefit you, he or she needs to determine this through a series of reports and then present it for you. One of the key elements of his job is to find the prime location for you to put down your business that will make it as successful as possible.

If you are looking to sell your commercial property, the right commercial real estate lender will help you to get the best price for it. In addition to helping you to determine the value now and into the future, the real estate agent must also determine if the best way to market your property.

It is unlikely for a buyer to just drive by and bid on the property. Investors need to come from far and wide and for that a specific and skilled agent is required to provide the right marketing potential.

Interview the commercial real estate agents that are available today. Find out what they propose to help you with and the cost of it. Most importantly, determine if what they have to offer you is what you really want. Find out more about their experience and their success.

Finally, determine if they are the right person by developing a plan of action with them to insure that this commercial real estate transaction goes as smooth as possible.

Commercial Real Estate

When it comes to finding the right commercial real estate agent, it’s not easy. The right agent can mean the difference between saving literally thousands of dollars in commission as well as making you millions of dollars. The right agent can save you time, which is money.

When you are ready to hire a commercial real estate agent, ask some key questions. First, ask the agent to send you information about himself or herself. By looking at the agent’s promotional materials and brochures, you can get a good idea about whether the person will be successful in terms of helping you find the right commercial real estate property or sell one you already have.

Second, ask the commercial real estate about his or her credentials, certification and education in terms of selling commercial properties. If the agent is a Realtor who has worked primarily with residential listings, you might want to wait until he or she has more experience before being a test subject. Commercial real estate deals are not only bigger deals that carry a higher price tag, but they require more expertise and specialized training and knowledge.

Third, ask the agent the average length of time it has taken for him or her to sell a commercial real estate property from the time it was listed to sold. To keep the matter in perspective, ask how he or she compares with the average of other people working in the same city or town. Just because he or she has sold properties in a few weeks, does not mean you will get the most money out of your deal. It may just mean it’s a seller’s market.

Fourth, ask whether the commercial real estate agent or broker has a support staff handling any of the major details. You may think you are hiring one person only to discover all of the grunt work and showings are going to be carried out by another agent. If that’s the case, make sure you interview the support staff as well to make sure it meets your needs.

Finally, find out how the Realtor or broker will determine the best listing price for your commercial real estate property. Or, if you are interested in buying a piece of property, find out if the Realtor has any vested interest in the property. Ultimately you want to make sure your agent is exclusively working with you and has your best interest at heart.

Commercial Real Estate

In order to make a successful commercial real estate investment you need to know the right questions to ask and the right way to ask them. Since purchasing commercial real estate is a negotiation between the buyer and the seller (and probably their prospective brokers), it is important that you, as the buyer, are prepared. Asking the right questions could help you avoid owning an underperforming asset.

Remember, both parties are trying their best to get what they want, but their goals are diametrically opposed. The seller is trying his or her best to get the highest possible price, while the buyer is trying just as hard to get the property for the least possible amount of money. There’s an old saying in the business: “All sellers are liars, all buyers are thieves.” While I don’t believe in either scenario as a way to do business, those commercial real estate investors who are able to create a win-win transaction will enjoy huge advantages over their more combative competition. And the key to doing that is in your questioning technique.

The key is to ask plenty of open ended questions of either the seller or his agent and to not accept a simple “yes” or “no” answer. If you ask an open ended question and get a yes/no answer, your immediate reaction should be to follow up with additional open ended questions! Obviously, if you keep getting yes/no’s to your questions, it may be time to find a more cooperative and serious seller.

Some of the leading questions smart real estate investors use include: