To be successful in the field of real estate, you have to learn the ins and outs on how to find real estate investors that suit your terms.
Commercial real estate is booming. Real estate investors are searching high and low for properties to buy with attractive rental yields. As a realtor, you need to keep up with how the market is changing and what your clients want. Having a list and learning how to find commercial real estate investors can help you become more like an insider when it comes to how the market works.
Investing in commercial real estate can prove to be a lucrative business, but how do you go about finding the right property and investors to buy it?
First of all, there are different types of commercial real estate. Knowing your client's needs can help you find them something that suits their budget and needs.
What each investor looks for in an investment depends on how long they will hold onto the property for. For example, there is short-term investing which means holding onto a property for around five years before selling it off again. The returns may not be as high with this type of investing because commercial properties have longer ownership periods (10 to 20 years) which will give you more time to see how your investment pays off.
Companies are buying up properties where they plan to have offices or factories in the near future. Buying these buildings before the business moves in is known as pre-leasing, and it lowers the risk of investing because you know how much rent a tenant will pay you every month.
Property portfolios also offer commercial real estate investors some reassurance. You can get into this kind of investing by collecting several low-rise office buildings or houses that you rent out. These may not be big investments, but building up a healthy portfolio overtime means that each investor has something to fall back on in case something goes wrong with one of their individual projects.
How to Become Successful in Commercial Real Estate Investing
The key to becoming a successful commercial real estate investor is to start small and grow your business along with the market.
A very important factor on how to find commercial real estate investors is how often you get out there and meet new people. You should attend every possible seminar or convention that has something to do with investment or business because it's where most of the investors go too. Getting out into the world and meeting new people is how many people find their business partners.
You also need to be comfortable with how social media works because it's how many people advertise their properties and how you can get the word out about how great your commercial property is.
In these days, investors are looking for short term returns and they want them fast. That's why how quickly you are able to sell off your commercial property will affect how much money you make in the end.
The longer a property sits without being sold, the more money it loses in value. So how do you price your properties so that they sell fast? One thing that could help is putting together a package that includes everything an investor needs to know about the property like historical data or legal agreements.
The real estate investing market may seem intimidating, but how you find commercial real estate investors can help you get more familiar with how it works. Once you have the right information and tools at your disposal, you'll be on your way to putting together a strong investment portfolio.
Why It's the Right Time to Invest in Commercial Real Estate
One of the biggest reasons why it is a good time to invest in commercial real estate is because the interest rates are at an all-time low. While this might have discouraged you in the past from investing, now could be the right time. If you've been on the fence about how to find commercial real estate investors, this would be a prime opportunity for you to get your feet wet and see how things go.
While some people think that retail is dead, others disagree. Many business owners are looking for store front locations because of how certain areas are booming with traffic flow and how they provide ample parking opportunities. Having a portfolio of these kinds of properties can help you reach your investment goals easily and allow you to cultivate a list of commercial real estate investors that could keep growing over time.
How to Find Commercial Real Estate Investors
Not all investors are easy to find. Most of the best quality investors spend a lot of time researching and making connections before they start looking for properties. They don't want to waste time on bad deals which is why they end up doing most of their business offline and by word of mouth.
You can look for local news websites that feature stories about people who have recently purchased investment properties in your area or region. If you want, you could create professional looking flyers and post advertisements on places like craigslist asking if anyone has any leads on how to find commercial real estate investors.
If you are an agent who wants to find commercial real estate investors locally, there are some ways you can quickly build your list of potential clients.
Trade Shows – There are many real estate investing trade shows that you can attend. The best part about the professionals who go to these conferences is that they are there to learn how to make more money, which means if you approach them at the right time and ask for a referral, they will be all too happy to give your contact information out to their network of friends as a courtesy to you.
Networking– You can also use networking events such as chamber of commerce meetings or alumni association events in order to meet commercial real estate investors in your area. The beauty of this kind of event is people often do not mind talking business over dinner or drinks after being introduced by mutual friends who vouch for what a great agent you are.
Local Investor Clubs– You can even join local investor clubs in order to meet people who specialize in commercial real estate investments. These groups are generally very active and always looking for how they can increase their network of investors who will ultimately use them as a sales force if they become involved in commercial real estate development projects.
Commercial real estate investments will always have their place in the market. Some people do not want to invest in residential properties because they wish to diversify how they make money and how much risk they take on. There are also tax benefits that come with investing in commercial properties, which is a big incentive for many investors seeking out rent payments. These types of investments are generally going to be more profitable than stocks or traditional mutual funds over one year, two years, and three years or more time periods when looking at average annualized returns.
The key on how to find commercial real estate investors depends on how confident you are in what you have to offer them. If you can't come up with a good pitch about how much money they will make when they invest, they won't be interested in listening to anything else that you have to say about your properties.
Read the Entire Real Estate Investing Series
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- How to Be an Effective Landlord in Real Estate Investing
- The Truth about Passive Income Real Estate Investing
- How to Get Rich in a Year: 7 Things Worth Investing Your Time
- The Great 2021 Real Estate Reset and the Only Properties I’m Buying
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.