Most real estate investment brokers find a start in the business part-time. They explore the residential space before they land on a commercial investment property. That’s because it tends to be easier to buy a single-family home or maybe a duplex and rent it out. Some even ease into it a little slower and start house hacking by renting a room to a roommate.
Commercial real estate has a reputation for being more complex, but it doesn’t have to be. The game’s rules are still the same, and it is sometimes even easier with significantly less competition.
Finding your first commercial real estate deal can seem daunting. Still, by remembering a few key strategies, you can run a successful commercial real estate investing business in no time.
How to Get Started With Commercial Investment
Finding your first commercial real estate deal does not have to be difficult. Success in this business is a numbers game. Keep looking, and you will find great deals. Successful real estate investment brokers have several different strategies for finding deals. They don’t give up when a potential deal fails to pan out.
Here are several strategies to find the right commercial investment property. The beauty of these is that they are amazingly effective for beginners, yet they are the exact strategies that seasoned veterans use.
Work With Investors Who Have Their Financing Ready to Go
Your job as a broker or an investor is to provide value to others by preparing to move quickly when an opportunity presents itself. When property owners need or want to sell their commercial real estate, speed is often just as important as the sale price, if not more so.
Many property sellers must sell on short notice, especially if their property or business faces distress. If an owner of a business is behind on their mortgage or facing other financial issues, being able to sell on a tight schedule is of great value to them.
If you find a restaurant for sale, for example, one may get a great deal on it simply by being able to close on it immediately. Already having an established relationship with investors ready to close will give you a leg up on the competition. Many sellers will gladly take a lower offer guaranteed to close as soon as possible instead of a higher offer with financing contingencies.
Before you begin your property search, establish relationships with lenders or other investors that can provide you with, or have themself, the means to close on an expedited timeline when you find a property.
Find Motivated Sellers
Many people find success simply by networking, either in person or online, to find motivated sellers to sell their property. Property owners find the motivation to sell for many reasons. Perhaps they are behind on taxes. Their business is failing. They do not have the funds to perform needed repairs, maintenance, or other reasons. If you find one of these sellers, you can often provide them with a ton of value simply by letting them unload their commercial investment property to you.
As an investor or broker, you can search county tax records to find tax delinquent properties and then contact the owners through phone or mail to see if they are looking to sell. Many data aggregator businesses also curate and sell lists of these properties to save you the work.
Find an Underserved Niche and Become the Expert
Many new brokers or investors make the mistake of trying to be an expert in everything. The best choose a niche and then focus their energy on becoming an expert in that area. You will learn how to analyze the deal by focusing on something specific. Focus on a certain type of property or a specific geographic area.
For example, learn about the Phoenix market if your niche is commercial retail space in Phoenix, AZ. It is better to be an expert in Phoenix than mildly knowledgeable about the office, retail or warehouse real estate market in the broader U.S.
If you’re looking to buy a restaurant for sale, you can find many underutilized buildings that were formerly restaurants in your area. A restaurant property for sale is an attractive opportunity for property developers and hospitality companies.
Establish Relationships With Other Brokers
Whether you’re investing yourself or just acting as a broker, you should be trying to establish quality relationships with other real estate investment brokers. Successful networking can help you add commercial office space to your portfolio.
You can establish these relationships best by meeting them face to face. Email, online forums, and even phone calls are a great way to get your foot in the door, but people like to do business with those they trust, and it is difficult to build trust without meeting face-to-face.
You can provide the broker with value just as much as they can help you. If you find a potential deal that isn’t ideal for you, consider a referral and let another broker know. When you help them out, you will be the first person they think of when they find a commercial investment property in your niche.
Success in commercial real estate investing is a numbers game. It is like baseball, where those who fail 70% of the time end up in the Hall of Fame. You can massively increase your chances of success if you automate your process and focus your daily activities on a few profitable and effective techniques.
It would help if you got to know investors who have their finances in order first so you can quickly close on a deal. Always be on the lookout for signs that a seller wants to sell. Actively seek out properties that show signs of distress. Become an expert in a niche so you can thoroughly analyze potential deals.
Lastly, make it known to others in the industry what you do and try to help others when you find a deal that may not be right for you. Real estate investment brokers will gladly return the favor when they find a property in your niche. Don’t be afraid of turning to a commercial construction manager to help you renovate a property.
About NAI Glickman Kovago & Jacobs
As the leading commercial realtors in central MA, NAI Glickman Kovago & Jacobs focuses on commercial property management in Worcester County. We have an award-winning restaurant, retail, office, industrial, multifamily, and medical real estate management record.
We can also assist with land acquisition and development as a commercial brokerage. Our deep local knowledge comes from decades of business partnerships with commercial contractors and key community vendors. Whether buying, selling, or leasing, we can find the right commercial investment property to fit your needs.
Contact us today if you need help finding commercial property for sale, brokerage, commercial construction management, or local property management services in Worcester, MA. You can also follow us on Facebook, Instagram, and LinkedIn for more updates about our commercial retail space listings.