“Every sale has five basic obstacles: no need, no money, no hurry, no desire, no trust.” – Zig Ziglar
Locating high-potential deals is one of the most difficult and challenging, yet most important aspects of commercial real estate (CRE) investing. The savvy investor must find the best possible deals in order to maximize the return on invested capital.
The goal of any real estate investor is to consistently locate high quality deals; if you can achieve this, you are able to do fewer deals per year while making a better return on those deals. Great deals are characterized by a return that equates to a certain minimum acceptable multiple of your initial investment; where that number lies will of course depend on you as the investor.
It’s a given that you should always use trusted and reliable sources to locate your prospective deals. Although there are many options you can use to find candidate properties, as they are available in every city and state, identify and concentrate on resources with the most up-to-date and accurate information. Below you will find ideas to assist you in finding the deals that best fit your property investment criteria. Of course, some resources will work better for you than others, depending on the situation and your particular area of specialization.
1. CRE Brokers
One of the best and most common places to find commercial property is through a commercial real estate broker. Over time, you can cultivate a relationship with a specific broker or firm to whom you can turn with a criteria sheet or specific information on the types of properties you would like to purchase. You can find brokers locally, regionally or further afield, and there is nothing stopping you expanding your reach by approaching brokers in other states. Most will be more than happy to contact other brokers in search of listings that best fit your criteria.
One advantage of working with commercial brokers is their access to pocket listings, or listings that are about to go on the market but have not yet officially been listed. This is a great way to get a jump on the competition and find excellent deals.
Another place to locate potential properties is, of course, the internet. There are many sites that show hundreds of commercial properties for sale in any given geographical area, ranging from raw land, to large retail centers, to apartment complexes, to mixed-use and more. Data can be filtered according to your specific deal criteria. These sites will tend to show information on both the property and the associated broker, so you can easily reach out to the broker to learn more about the property.
One of the best sites for this is Loopnet.com, which lists literally thousands of CRE brokers all over the United States. A simple search for commercial real estate brokers in Houston, for example, yields over 4,000 results with their respective contact details and areas of specialization and, perhaps most importantly, even active listings in many cases. Loopnet does have other useful tools and services available only to its Premium Members; but even a free account enables you to view contact details and send direct messages to any broker that you want to talk to.
Use this method as a way to build your base of contacts, and soon you’ll have a huge number of brokers and agents at your fingertips. There are, of course, pricier and more extensive alternatives such as Costar (which owns Loopnet) and Xceligent, which you will at least want to consider as you weigh their benefits against your business budget.
3. At Auction
Auction houses are another great place to locate properties of all conditions and types. The advantage here is that you can often find excellent deals on commercial properties that would be more costly if listed with a broker. Sign up for mailing and e-mail lists of the auction houses, so they notify you of properties that will soon go to auction. This allows you time ahead of the actual bidding day, to investigate the property as an investment proposition.
Auction houses sometimes provide the option to purchase a property at a certain price before it goes to auction. No-one can predict what opportunities might come along, so it is a good idea to stay in contact with several auction houses in case one of these deals comes your way.
In practice, as an active real-estate investor you should naturally be using a combination of the above methods, and any others that work for you. As with any business, the more contacts and sources you have working for you on a number of different fronts, the more opportunities will come to your attention. Whether your focus is primarily local, regional or national, you should constantly be evaluating new ways to expand your range of options and associates. What better way to find targeted, up to date, information that could possibly bring you your next big commercial real estate deal!
For more information on this and other matters related to commercial real estate financing, please contact Commander Capital Funding Group today on (888) 748-7731 or firstname.lastname@example.org.