If you’re considering a potentially hot commercial real estate deal, you’ll want to tread lightly so as not to get burned. Commercial real estate is a worthwhile investment, and you can certainly obtain substantial monetary benefits from investing wisely. But landing a deal is a little bit like landing an airplane; if you don’t have the right approach, you could crash and burn. Below are things to consider as you plan your approach and capitalize on the deal.
Learn the Inside Scoop
There is a reason real estate is a profession; it’s a very complex business. If you want to have any shot at landing a beneficial commercial deal, you’re going to have to know what the real estate professionals know. Experts in real estate management, like Kevin Kerekes in New Jersey, know that having inside information can be the difference between negotiating a great deal and being left holding the bag, so be sure to network with a professional and do your research before signing on the dotted line.
Have a Plan
There’s an old saying that if you fail to plan, you plan to fail. There may be some exceptions to that rule, but real estate isn’t one of them. Be sure you know what you can afford, what you want to make, who the key players in the deal are, how many tenants on board, the space you need to fill, and other details before you approach the deal. Knowledge is power, and you’re going to want a lot of both laid out in a solid plan when you go to sign on the line.
Spot the Deal
It almost goes without saying that in order to approach a good deal, you have to recognize it. The best deals are the ones that include an exit strategy; you should always be able to walk away if things start going south. Look at things as a landowner does, constantly looking for damages, repair requirements, risks, and so forth.
Find Motivated Sellers
If you’re excited about a deal, and the seller seems hesitant or disinterested, something is wrong. Sellers that are highly motivated, particularly those who are ready to sell below market value, are the key to success. Rarely a deal happens in real estate where the seller is not enthusiastic, so look for those characteristics right off the bat.
Be an Investigator
There’s nothing wrong with doing some digging and knocking on a few doors to find out what a neighborhood is really like. This is often called “neighborhood farming”, and is a completely legitimate practice. You wouldn’t buy a car without looking under the hood; why would you purchase a property without knowing what the neighborhood around it is like?
Finding, evaluating, and obtaining real estate deals is not rocket science. But successful real estate professionals know that communication, relationship building, and partnerships are the key to any successful deal, and if you can practice these successfully, you’ll be in good shape to recognize, approach, and land a good deal on commercial investments.
Kevin Kerekes writes about commercial investments along with urban development and planning. He spends time with his wife and kids as well as putting in extra time at the gym most days.
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