As a commercial real estate broker, investor, and developer, I get asked by new investors
all the time: How do you find so many investment opportunities?
There aren’t any deals out there! And, for most investors, that statement is
true. Investing in commercial real estate can be
a lot of fun and it’s certainly rewarding, but coming across a good deal is often the
most frustrating part of this process. From what I’ve seen, however, most investors
simply don’t take the right approach. Here’s my beginner’s guide to finding
commercial real estate deals.
If you’re not taking the right approach when it comes to starting the search, then
you’re already behind. You can’t just make a post on Facebook,
announce what you’re looking for once at a real estate investors event, or tell the
occasional real estate agent you come across. Finding your next investment opportunity needs
to be at the forefront of your mind.
Make Your Search Known, Then Make It Known, Again
﻿Like I said - announcing it once then throwing your hands up in the air in defeat when no
deals fall in your lap cannot be your strategy. Some of the most successful real estate investors
I’ve ever met reach out to their database on a consistent basis to let everyone know
what they’re hunting for. In fact, I knew a prominent single family
investor in Nashville that asked just about every person he came across how much money
they’re looking to invest in real estate, regardless of if they’d expressed interest
in it or not! If you never ask, you’ll never know, and
if you don’t become your own evangelist first, no one else will.
Be Curious About Every Opportunity You never know what you’ll find in a deal
that others have simply missed. Be prepared to turn over every stone - just
because something has been sitting on the market for a while and “everyone has seen
it and passed on it” doesn’t mean there isn’t opportunity there.
Underwrite every opportunity that comes your way because they could be few and far between
depending on your investment criteria. There’s an old mantra in real estate that
“you have to comb through 100 deals to find 1 that fits,” and there’s certainly truth
to that statement.
7 Ways To Find Commercial Properties
Looking for commercial properties? Whether you’re an investor, broker, or business
owner, here are the 7 best ways of finding commercial deals.
Commercial Brokers Commercial real estate brokers are likely
your best option when on the hunt for commercial property since they’re doing some, if not
all, of the other methods I’ll list below. Brokers are paid commissions on deals that
they source and close, so they’re highly incentivized to keep their ear to the ground
for available opportunities. The world of commercial real estate is often
shrouded in mystery since there is no single database that maintains, tracks, and lists
all of the available opportunities like you’ll find with the MLS in residential real estate.
So, these brokers work their hardest to keep a running list of any current and upcoming
availability so that they can work to pair buyers and sellers together.
And, if you’re the one buying a property, their commissions are charged to the seller,
so you don’t even have to pay for their services.
Networking Again - since there’s no database, you’ll
need to work on your own. Get to know other real estate owners in your
neighborhood or the area you’re looking to acquire property in by networking at industry
events or neighborhood meetings. Let them know that you’re on the search
for commercial investments. The more eyes and ears you have out there
working for you, the better - you simply never know when something will come available. I’ve
seen property trade hands off market like this many times before - the buyer met someone
at an event that just so happened to be interested in selling something.
Social Media Social media is essentially a digital bulletin
board - take advantage of that! Not only can you post what you’re searching
for on your page, you could also share it with likeminded groups where you’ll find
potential sellers or individuals that know other owners willing to sell.
There are countless numbers of groups online, from Facebook to Bigger Pockets, where you
can broadcast your search to the public. Social media is one of my favorite methods
for getting ahold of a decision maker, especially if a business owns its own location, since
the ownership or a manager is often running their social accounts.
Cold Calling “Cold calling is dead!”
For some cases, it certainly is. But if you’re looking to get ahold of a property owner,
it can be a direct path to the seller. You can find telephone numbers for the property
owners by scanning White Pages, checking out their website, or connecting with them through
social media. LinkedIn is ideal in this scenario since contacts
will often have their phone number on their profile page after you’ve connected.
Then, call on them and just ask if they’re interested in selling the property. They may
not be interested in selling at that time, but situations can change rapidly, so have
them keep your number just in case. And don’t forget to follow up!
Mailers Snail mail is definitely the sleeper in this
group. Most investors (and people in general, for
that matter) don’t even think to take advantage of this method.
It can be impossible sometimes to find the proper owner in commercial real estate since
these ownership entities are often hidden behind the barriers of an LLC or through the
office of a real estate attorney. However, tax records have mailing addresses
for the ownership of every property, so if you send a certified letter, you know your
message will be delivered to the right person. Physical mail has also decreased in popularity
since the advent of email, so send those letters and postcards to owners and yours may be one
of the few pieces of mail they receive regularly. Drive The Market
Sometimes there’s no better way to find investment opportunities than driving around
in the market. I keep an eye out for properties that look
as if they’re falling apart, the landscaping hasn’t been cared for in quite some time,
or the oldest building on the block. More often than not, those owners either live
out of state or they may not have the wherewithal to maintain the property, which could mean
a buying opportunity for you. Get out, knock on the door, and speak with
the owner if they’re onsite. If not, follow up with a cold call and a letter!
As a real estate investor, you should get in the habit of driving your market as often
as possible. Not only will you continue to increase your familiarity with the neighborhoods
you’re looking to buy in, but you’ll also start to recognize which properties have changed
ownership or which pockets seem to be gaining traction.
Online The internet could be one of the easiest ways
for investors to find potential investment opportunities.
While there is no single database with information, you can browse different websites that allow
brokers and sellers to list their properties for sale.
Be sure to check the MLS, CREXi, and Loopnet to see what’s out there.
Keep in mind, though, that these websites often have outdated or incorrect information,
so you will have to do a fair amount of research on your own before making any decisions.
Is there a large boutique brokerage in your city? Like my firm, The Cauble Group, they
likely have a page on their website like our Nashville Listings directory that showcases
their available for sale and for lease properties. Don’t forget to check Craigslist, either
- I’ve been surprised by properties that pop up on there every now and then.