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Ask any investor in multifamily, if they will tell you, how do they find commercial properties to evaluate? You will get several different answers because there are many different sources to look at property. Commercial real estate does not have a centralized listing of every property is available like the MLS is for residential real estate. You need to dig around a little bit – sometimes a lot. Lets look at three sources.
- The first source and the easiest is Loopnet.com. It is a free or low cost service that you can subscribe to and review brokers’ commercial property listings. It is quick and easy. That is the good and the bad of the service. The bar, for getting information, is so low that everybody is on the service. They is a lot of competition for properties. You will really need to search hard to find a great deal.
- CoStar is another service, but this is a paid service that provides a lot of information. This is an expensive service that commercial brokerage companies use. The competition for the properties will be less because of the price. It is not a service that someone starting out in commercial real estate will use.
- The 3rd and best source of deals is the old fashion way: brokers. They have access to all kinds of information and properties. They can be an invaluable source of deals, but it takes time to develop a relationship. You need to show that you are someone who will close deals. A broker is paid on commission and their time needs to be spent with people who will analyze deals and can close when the numbers look right. That is why you will find that you need to work harder at first to get their attention and information. Knowing the right questions to ask is part of it. You need to do your homework to show the broker you are a player not just a wanna be. Until you are a known quantity you are low on their totem pole.
So unless you know a broker in another state, if you are investing out of state like us, start with Loopnet. Yes it will take longer but you have a variety of properties to look at and enough information begin your preliminary numbers. As you purchase properties the brokers will see that you are someone who closes and they will devote more time to your questions getting you information. Small steps.
