Know Your Numbers in Commercial Real Estate

Commercial real estate is one of the best markets out there for investors; however, there is more to it than merely purchasing property and selling it to someone else. When investing in commercial real estate, phenomenal returns and profits are possible, but it takes a coordinated combination of trends, timing, location, and the right price in order to be successful. Finding the right commercial property, in the right place at the right time, is what is essential for a great deal that will bring in a great amount of profit. If you know your numbers, you can definitely find commercial real estate to be a profitable market.

The #1 Factor The most important factor to keep in mind, if you want to be successful in commercial real estate, is finding the right piece of commercial real estate. When looking for the right piece of real estate, there are a variety of different factors that investors must keep in mind. It is imperative that you look at current trends in the market when it comes to commercial real estate so you can find the best areas to invest in. If condominiums or apartments are a huge trend in the market, then you may want to invest in this area of commercial real estate. If you take a look around the area and see a need for a shopping mall or strip mall, then you may want to invest in the commercial property needed to build one. When you find the current trends in your area, you will be setting yourself up to make an easy profit.

Finding the Best Place The second factor you need to remember when dealing with commercial real estate is finding the best place for your investment. Make sure that you consider both the property and the location of the property when you are making your decision. If the property is great but the location is bad, then you may lose money, and the same is true if the property is bad and the location is good. In order to make the optimum profit, you want to find the commercial real estate that has good property in a great location. Doing your due diligence can help you find out whether or not the property is a great property and whether the location is a good one as well. Taking the proper time and giving the right amount of effort to due diligence can help you find the best place that will make you money in commercial real estate.

Timing is Everything Although the right piece of commercial real estate and finding the best place are both extremely important factors, without the right timing your deal may end up less than satisfactory. The timing for investing in commercial real estate will have a great deal to do with actually finding the right property, evaluating current market trends, as well as a great location, and favorable costs as well. When you are doing a pre-purchase analysis of commercial real estate property, you need to consider geographic, economic, and cyclical trends before you decide to purchase the property. Even a great piece of property at the wrong time can be a disaster, so be sure you make every effort to have the right timing for your investing.

The Price is Right Another factor to be considered when investing in commercial real estate is the price. While the property may be great and in an excellent location, if the price is outrageous you will not want to waste your time. Investors in commercial real estate need to look for properties that are priced in such a way that a great profit is possible. Avoid wasting your time on overpriced commercial property, but spend your time looking for excellent deals on great properties. When you are able to find a great deal on an excellent piece of commercial property, you open the door to be able to make a very large amount of profit, which will increase your overall success as a commercial real estate investor.

If you are missing any of these key things in a deal, then it has a big chance of going sour. The best deals come when all of these deciding factors come together. The savvy commercial real estate investor needs to be prepared to move extremely quickly when these factors all come together so that they can get a quick deal and make a great profit. When you see a great piece of commercial real estate, in the right place, for a great price, and at the right time, then you know you have the opportunity to make a huge profit quickly. If all these factors align themselves at the same time, you will know that it is the perfect time for a great deal that will bring you a great deal of money. Remember, success in the commercial real estate market is relative to cash flow, and a deal that includes each of these factors will definitely affect your cash flow in a positive manner.

by Tony Seruga, Yolanda Seruga and Yolanda Bishop