Although your chances of finding a good commercial real estate deal often improve with experience, there are a few preparatory steps that you can take to guarantee that you get the most favorable deal possible, regardless of your experience level.
You probably already know that commercial mortgage lenders usually want at least 20 to 30 percent down. Your commercial property investment is very likely one of the biggest and most important investments of your life. It should be treated as such, and the more time and energy you put into research and preparation, the better the chance that you’ll close on a great deal.
Look for motivated sellers
Sellers who are motivated to sell quickly are much more likely to offer you a property below market value. A motivated seller will reduce the chance of you having to spend several weeks on negotiations or paying above market prices for the property that you really want. They usually have some sort of personal or business circumstance that requires them to sell in a faster timeframe, and they will be much more likely to negotiate the price with you rather than playing hardball.
Get acquainted with key commercial real estate investing metrics
Becoming acquainted with key commercial real estate investing metrics can help you determine whether or not a particular investment makes financial sense. For example, the NOI, or Net Operating Income, of a property is calculated by subtracting operating expenses from the property’s first year gross operating income. The NOI of a property can help you determine its potential value, along with other key metrics like the cap rate.
Look everywhere that you can
Search for deals everywhere and use all of the resources at your disposal. Search the internet, read the classified ads, even hire real estate search experts or a South Florida real estate lawyer to help you find the exclusive investment properties that others might not be aware of.
Hiring a professional is particularly important if you come up emptyhanded with your own searches. An experienced South Florida real estate lawyer can help you spot the top commercial real estate deals in the South Florida market before competing investors snag them up.
Mark Schecter has several years of experience in finding and closing South Florida commercial real estate deals and can help you find great investments at below market prices. To ask any questions that you may have about commercial real estate investments, or to schedule a consultation, contact Schecter Law today by calling (954)-779-7009.