by Gagner | Jun 29, 2015 | Commercial Real estate investing, Multi-Family Investments
Selecting locations for commercial real estate investments Recently I realized that I mistakenly skipped posting part 2 of our commercial real estate series. My apologies and here it is….. In part 2 of our commercial real estate series, we will outline how to analyze and select specific areas to invest and ways to actually find the best properties in any location. Although this is an article on commercial real estate, most of these principles apply to any type of real estate investments (including single family homes). Paying close attention to the old adage “location, location, location” is one of the best ways to protect your asset’s value, take advantage of market appreciation and maximize cash flow. Those investors who only feel comfortable buying in their own backyard may be missing some of the best opportunities to grow their wealth quickly. So let’s take a look at how to analyze where to invest. There are five major factors that an investor should consider when selecting a particular area. They are: 1. population growth 2. employment growth 3. strong rent rates vs low purchase prices 4. business friendly environments (taxes, regulations, landlord laws) 5.high barrier to entry. As a note, 1-2% annual employment and job growth would indicate strong appreciation potential. Of course, it is difficult to meet all 5 of these criteria in any one location, so it makes sense to look at your resources, investment horizon and criteria in order to pick the best locations. Some areas will be better for cash flow (ie high rents vs lower price points), while others will be better for long-term appreciation (ie...
by Gagner | Jun 14, 2015 | Commercial Real estate investing, Finding deals, Multi-Family Investments
Commercial Real Estate investing basics – Part 3 In part 3 of our commercial real estate series, we will continue from where we left off last issue, by sharing strategies on how to find deals in the specific markets you have selected. Just as the principles for picking the right markets are similar across all types of real estate, so are the concepts for finding deals. This topic can be boiled down to the following: your success in finding real estate deals depends on how well you cultivate relationships with an effective network of professionals. The majority of this article will focus on the people that can help you find the best deals and how to find those people in any market If you are new to a market, you will need to make substantial effort to develop rapport with all types of professionals, including commercial RE brokers, property managers, appraisers, RE attorneys and property inspectors. But Before you pick up the phone to start making calls, develop a clear picture on what you are trying to buy. You should have a general idea about the type of propoerty (discussed in part 1), how much money you have to invest, property class (A,B,C,D), cap rate and the strategy you are looking to deploy (ie reposition, value-add, momentum play, etc). Sites like www.loopnet.com and www.showcase.com can give you an idea about prices and cap rates within a given market for specific property types and classes. Once you have a general idea about your buy criteria, use the same sites referenced above to identify some of the active listing brokers in...
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