Where to Find Commercial Real Estate Listings
4 questions to ask yourself as you look for new commercial real estate investments.
There’s no shortage of real estate to invest in, but what is the best way to find new opportunities? And how can you vet potential investments to make sure they’re solid and also right for your portfolio?
If you’re just getting started as a real estate investor, or you’re an experienced investor looking for a strategy to help you source new deals, here are four key questions you should ask yourself to help find the right investments for you.
1. What are Your Ideal Investment Criteria?
One of the best first steps you can take to start narrowing down potential investments is to identify the investment criteria you want to prioritize. This could include location, asset type, market characteristics, and even your target returns.
Some investors prefer to focus on real estate that’s close to home, or in cities they’re familiar with. Others care less about the specific location and more about the type of market (at Excelsior Capital, for example, we look for investments in secondary growth markets — outside of traditional Gateway Markets — with populations of 500,000 or more).
If you want to minimize your risk by investing in real estate that tends to perform well even in a downturn, this should inform the deals you look at. If your priority is to take advantage of a favorable market or generate high returns in your first few years of investing, you may prefer to invest in assets that may be more volatile, but also have the potential to generate higher-than-average returns.
2. What Type of Deal Do You Want to Invest In?
There are many different ways to invest in real estate, including real estate investment trusts (REITs), funds, and sole ownership.
At Excelsior Capital, we provide access to direct co-investment through real estate syndication. We’ve found that this strategy simplifies the investment process and maximizes investor tax advantages, while also allowing people to select the specific properties they want to invest in.
The investment strategy you choose will partly depend on whether or not you’re accredited, how much you want to invest, and the level of liquidity you desire. Thinking through all of these factors before you start actively searching for a property to invest in will help you narrow down your search significantly.
3. Who Do You Know, and How Can They Help You?
Don’t get so caught up in looking for opportunities “out there” that you miss the opportunities you can find within your own network.
If you’re just starting out and don’t have many brokerage contacts or connections, focus on building your network first. Spend some time researching the firms that are investing in the market and product types you identified in step 1, as well as people who work with the deal structure you selected in step 2. Don’t be afraid to cold call or email people at those firms, but once you get in touch with them, make an effort to cultivate the relationships for the long term.
As you build your brokerage network, you’ll find yourself starting to hear about more deals you might not have found otherwise, including off-market deals that are less competitive and may have more advantageous pricing. Real estate is ultimately a relationship business, and so the more people you know, the more opportunities you’ll gain access to.
4. Which Investments Make Sense for the Current Market Conditions?
Many people are asking if now is the right time to invest in real estate, but this is actually the wrong question to ask.
Even when the market as a whole seems less-than-favorable, there are still opportunities to generate positive returns. Self-storage facilities, medical office buildings, mobile home parks, and multi-tenant office properties in suburban growth markets are four categories of commercial real estate assets that are proven to be especially durable, even through economic downturns. (Learn more about those asset types here.)
Under the right ownership, most commercial real estate properties will appreciate in value over the long-term. This is one advantage to investing in commercial real estate instead of residential, because commercial real estate performance is aligned much more closely to growth than to inflation.
By choosing investments that can withstand a downturn or recession, you can continue to build wealth regardless of how the markets are performing. The question is not, “Should I invest in commercial real estate right now?” but rather, “What commercial real estate investments are positioned to perform well in our current landscape?”
To learn more about our investment strategy and portfolio, please fill out this form to get in touch with a member of our team.
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