Commercial Real Estate – An Exciting Prospect

All commercial properties share a common perspective. It is to derive means of profitability. The ground principle provides assurance that business aspirations are well met on the part of businessmen and the person who had invested in the whole infrastructure unit. Different properties have various functioning methods, few professionals like to buy or take it on rent. It is more of an individualistic approach and business requirements also play a vital role in it. Commercial real estate includes offices, raw land and likewise areas of pure commercial value. Just to make it easier to understand, it is entirely different and opposite from residential properties. The respective industry is gaining further ground and has taken a giant stride in the last five years or so. The percentage ratio has been increased by 20% to say the least.

Definitely! Like all other business ventures, it had its own share of luck and witnessed quite a change however adversities are always meant to sharpen the skills of business entrepreneurs who graciously accept the challenge and provide window of opportunities to others. The concept of investment properties is turning novice into the shoes of industry experts. There are number of factors involved while one is trying to look out for an appropriate site for apartment buildings. World economy is essential to the success factor however the impact of local economies is also proving to be critical over here. Various other factors such as lease term, number of people involved and the state of local market are also worth mentioning. Real estate development has opened the floodgates for different types of investments to be made in the sector. The single most influential factor is to choose the right type of property. Location holds the key here as it is going to attract larger amount of audience as compared to any other project. The surrounding area should have access to common household activities. It is always advisable to take the assistance and expertise of professional individuals so as to bring uniformity level into existence.

Among other factors, try to read all lease laws carefully as these legal policies differ from place to place. All over the world, the idea of investment properties is becoming more and more popular. Land has always been considered as the top most investment. Real estate world holds no restriction in place for other business professionals to foray into the business. This seems to have brought all the revolution as big corporation houses are bringing different forms of culture and competition forth. The industry is witnessing the biggest phase as more land is going to get covered and being practiced into the segment of real estate development.

Commercial Real Estate Success – The First Step

“The gem cannot be polished without friction, nor man perfected without trials.” — Chinese Proverb

One of the things to help you reach your commercial real estate and your wealth goals in the next year is really decide which track is best for you at your current place in your “investment life.”

I have a lot of investors contact me with the same question, especially in recent months…

“How do I get into some great commercial real estate properties that will start building my wealth ASAP?”…Or something to that effect.

First, decide what your track is. What do I mean by track? I mean deciding how to proceed based on where you are AND what your expectations are.

Be realistic with this and schedule some time to work on planning for your wealth goals this year. If you are reading this article, I can guarantee you have heard 1,000 times to write down your goals. But I would make another suggestion that is critical to your success – write down what you DO NOT WANT from your investment business.

For example, on my list I have the following items:

I do not want a large amount of unnecessary overhead expenses.
I do not want to be a “hands on” landlord.
I do not want to be involved in the day-to-day property management operations.
I do not want a large number of employees.

You get the picture. What you will find is identifying what you DO NOT WANT is just as important as identifying the goals you want to achieve.

The reason this is so critical is if you choose a wealth goal that violates one of your “DO NOT WANT” list items, you will not achieve it. Many investors fall prey to what I would call ‘other people’s goals” – whether those be of a spouse, business partner, or friend. I have even seen very experienced investors make this mistake.

Make sure you include these items in your planning:

1. Make a list of “DO NOT WANT” items for your commercial real estate business.
2. Make sure your “WANT” list does not violate these rules.

This is one of the best way to get to your goals, faster. No question about it. So, decide where you really want to be and GET SERIOUS about accomplishing all you can in THIS YEAR. Remember, if you are not where you want to be at this point you have no one to blame other than yourself.

Do you want to learn more about investing in commercial properties? Click the link below for my FREE 7-Part Investment e-Course. I’ll also send you my FREE special report and teleseminar access “How to Buy Apartments and Commercial Real Estate With No Or Low Money Down.”

Is Commercial Real Estate Investing For You?

The two major issues that stop investors from pursuing commercial real estate deals are no time and no money. In my experience, I’ve started off with practically none of these resources available to me, but as I broke these barriers my investing career started to flourish and I became a millionaire in under four years. You can sure bet that I’m glad I got started and once you start seeing results, I know you’ll feel the same way too.

There are many real estate gurus who will tell you that you need to commit many hours per week in order to get your real estate business off the ground. Lots of time commitment with no pay off is a quick path to failure. Why? It’s hard to stay committed enough as it is and if you start to feel like you’re spinning your wheels and not getting anywhere, it becomes easier to say that investing is not working out especially when you’ve got other commitments and priorities you’d rather be doing.

While you do need to invest some time in moving forward, it’s not as much as you think it is. Start with doing something you can do regularly and stick with it until you see results. Now you do need to be doing something that generates a deal like calling property leads or doing direct mail and as you start to see results, it’ll be much easier to commit more time to finding other deals.

The second most common reason investors don’t pursue commercial real estate investing is that they believe they don’t have the money to do so. I started in real estate having less than $800 but the one thing I learned was that the better the deal was, the less people focused on me and the more they focused on the deal.

There are multiple financing sources available. You just have to learn how to access them. Your lender will give what it can and the rest will be made up with money partners. You may be thinking that you don’t have great credit or that you don’t know anyone who would want to invest with you but the key is to be open to finding other options. Remember if the deal is good enough, people will want in on it.

With all that being said, there are a few other qualities that can make or break a successful real estate investor.

1) Willingness to learn – successful investors take the time to learn about properties and their market conditions. They take the time to find out better ways of structuring deals to increase their profitability. They make mistakes. They learn and they move on making sure to not make the same mistake twice.

2) Able to move past psychological barriers – successful investors have a “can do” attitude. They are solution oriented and don’t stop dead in their tracks because they don’t have an answer to a problem they face.

3) Are people oriented – real estate is a relationship business. A successful business is one that has a network of contacts and experts who are used regularly to create more and more profits. That means we act with integrity and we make it easy for people to want to do business with us.

Commercial real estate investing is for anyone who is willing to do something in order to reach their financial goals. Whatever you don’t have, you can obtain with the right attitude and the right system in place.

How to Close a Commercial Real Estate Sale Or Lease

In commercial real estate it pays to have a basic plan that allows you to focus on and refine your closing procedures. Far too many people in the industry start to close when they think that the time is right and then use a random process. They do not close well. They are not practiced and they are not refined to the requirement of closure.

You always know when you are dealing with a real professional in the industry. They are professionally direct and helpful in the way in which they interact with the other party. Their dialogue is selective and focused. They are very skilled. To achieve this level of performance it requires sometimes years in the industry, although you can fast track the process with simple practice.

What we have done here now is to give you a solid process of closure and performance that can be utilised for sales, leasing, and other commercial property matters. This list can be practised and can be improved to suit your market and your business style.

1. Put out feelers early in the conversation to understand what the other person is thinking. Take notes if this is your way of capturing key elements of the conversation.

2. Note body language of the other party in the conversation. It is surprising what you can see in the actions and posture of the other person. They invariably let out visual hints regards their thoughts and feelings on the property and the discussion. It is not so much what they say but what they show in the process of conversation that you want to interpret. As you chat with them it is the big picture of response that you get including the body and the posture that you need to assess.

3. Closing starts from the initial meeting. Once a person is qualified and becomes the attention of your conversation, then you should always then be closing in small conversational ways that are in reality a series of small acknowledgments. It has been shown that the major sale is in fact a series of smaller selected decisions that the client or prospect is taken through. This can be done with subtlety.

4. Ask questions with reference to

a. Price awareness
b. Rent awareness
c. Outgoings awareness
d. Returns on investment
e. Confirmation on finance
f. Property need
g. Location need
h. Development or refurbishment needs
i. History of property ownership or investment
j. Timing need
k. Knowledge of the market and the area
l. Knowledge of property construction
m. Exposure to tenant and other property negotiation in the past
n. Other properties that they have inspected
o. Other properties that they have owned
p. Awareness of property performance issues
q. Knowledge of leases and documentation strategies
r. Knowledge of sales and marketing methods
s. Solicitor and Accountant support
t. And anything else of relevance

5. Make the other party feel confident in your ability to help them by displaying market knowledge and property performance awareness. Talk about the market and what you have seen recently of interest to the other party. Make the conversation a balanced dialogue of questions, answers, and opinions. In the world of professional negotiation this is called ‘pacing’ and infers that your conversation is moving with the other person. Remember that the conversation is about them and not about you.

6. Talk about other recent deals and properties of relevance in the precinct. Most particularly tell stories of importance. It has been shown that stories of the commercial real estate market are more compelling to the other party than just facts and figures. The person you talk to will remember and listen to a story far more than the numbers that you give. If you can put yourself and your business in the story in a productive way then all the better for your conversation, negotiation and closure.

7. Advise properly and honestly. When it comes to critical matters of property advice, you are the professional but you must be selective on what advice you give and to whom. If the matter is critical to the future or the decision of the other party, be wary of the constant threat of litigation from advice that you may give. Many agents and brokers have suffered the frustration of giving advice to the other party that has later proven to be the source of debate and court action. If in doubt, do not give advice, but rather let the other person make the choice on critical matters. Do not comment on things to which you are not aware or lack the full detail.

8. Be positive, confident, and enthusiastic. Within reason the other party will be comfortable dealing with an agent that is all of these, but professionally so. The more you know about the property and the industry, the more you can show confidence and enthusiasm in your communication with others.

9. Ask for a decision from the other party to list, sell, buy, or lease. Asking the other party these questions professionally is expected and should not be avoided. You need to know what direction should be taken in the connection with the other person and ask for it in a timely and confident way. If you ‘do not ask’ then you ‘do not get’. In the industry you will get many more ‘no thank you’ responses than straight agreements, so get used to the asking process and do not be put off by a simple ‘no’ answer. It is sometimes important to get a series of ‘no’ answers before you will get to the required ‘yes’.

10. Don’t be a ‘guide’ or a ‘chauffeur’ when inspecting or showing another property; it is not good for your image. You show a property for a reason and that is closure or qualification. Keep these facts at the central core of your dialogue to move things ahead.

11. Deal with objections efficiently and with relevance. To do this you must have all the facts about the property and the precinct. As part of this process always keep notes from the conversation, as many deals and discussions are relied on later by the parties. At the very least this method of recording conversations will help you in matters of disagreement and litigation.

12. Never stop closing and selling. When this is done professionally it is a respected component of the property communication. When taken and utilised in balance with the other parts of this topic above, you become more respected and observed in the industry. The sellers and landlords will value your skills and relevance to them. No-one wants to use a mediocre or generic salesperson to help them; they want the best and hopefully you can qualify well in that regard.

Whilst these things above may seem obvious, it is remarkable how many operatives in the industry do not register well on this scale of performance. Think about it and refine it to your needs, then start the practice.

3 Best Markets to Buy Commercial Real Estate

The greed in the United States has not only driven this country to a deep and long recession, but also sparked a global financial crisis of unparalleled proportions. This fact is well known and documented. It is also well documented that the commercial real estate market have been severely hit leading public traded REITs like General Growth Properties and large commercial property owners like the Lembi Group out of San Francisco to file for bankruptcy protection. The herd mentality says “sell, sell, sell.” During these times of great uncertainty, it will be the contrarians that will ultimately take advantage of the steep declines in commercial properties and actually be the catalysts to turn the economy around. So, if you have money and are ready to invest in real estate, where are the best markets and opportunities that promise to yield optimal risk adjusted returns?

The first market to invest in is urban in-fill locations. You may have been expecting me to offer up a specific city, but you’ll find great opportunities in a myriad of urban in-fill locations. Urban infill locations are places like Seattle, San Francisco, Los Angeles, and New York to state the obvious. These locations have large existing populations, strong job base and limited available properties. There are less obvious cities, but equally filled with opportunities like Redmond or Bellevue in Washington and San Mateo, Burlingame, and Los Gatos in California. Look for cities within 15 miles of the most urban city in your region.

The second market to invest in is tourist locations. When hurricane Katrina hit New Orleans, the real estate market in Louisiana was devastated. Properties sold in the French Quarter were selling for 1/3 of the price before the hurricane. Once the flood and the chaos quelled, real estate in the French Quarter tripled. There are other places to consider like Mexico. Mexican cities like Cabo San Lucas or Cancun are excellent cities in Mexico. While the Mexico flag flies in those cities rather than the American flag, there are great opportunities in this depressed market to buy real estate.

The third are college towns. Places like Westwood near UCLA or Berkeley next to UC Berkeley yield some of the highest and inelastic rents in the country. You can even buy depressed properties near state colleges like West Virginia or Fresno State. Even though the prices are low, the rents are high because students want to be near campus