Commercial Real Estate investors compare finding valuable investment leads to panning for gold. Sift through internet information, talk to brokers, well meaning friends, other investors and motivated sellers to find real investment opportunities wastes valuable time and money. Its enough to make you give up lead prospecting before you start . . . until you use a pre-screen lead mechanism.
One investor cannot screen as many leads as a dedicated team with a common goal.
Investment knowledge shared by well informed resources is the shortest distance between your investment goals and high yield returns from your investment dollars. The idea that an investor that works harder than other investors will bring more leads from their prospecting efforts is false. I believe hard work is its own reward but I prefer to work smart if it involves lead generation.
Use your investment team to provide pre-screened leads and find the right deals faster.
Doing pre-due diligence with pre-screened deals saves time, effort and increases your ability to find investments that meet your investment criteria. Using money to make money yields greater returns than you working for money, use your resources to pre-screen leads and increase your market share.
Your investment strategy should be clear with your TEAM.
Commercial Real Estate brokers, field partners, property managers, legal and financial team members, appraisers and building inspectors are excellent lead resources and must be aware of your specific criteria for acquiring an investment property, especially when they research a market for a potential investment. Your winning team is a reflection of your skill to assemble the best resources in your network. Choose who you work with based on proven expertise and their ability to deliver the leads you seek. Your team is important and can help you make decisions about a market but you are ultimately responsible for where and why you invest.
Explain lead criteria:
I am looking for cap rates in this range, comparable to market cap rates. I am willing to pay this price per unit, I want the building to contain these physical characteristics. . .. Include your restrictions: I will not look at a property with a chiller cooling system in this market. , for example. Verify acceptable leads and acknowledge your team resources.
Have an efficient and automated process to locate leads.
My team of real estate agents, field partners, and other professionals deliver pre-screened leads. They know what I will buy and they will profit from a property I acquire. I do not spend time hunting for new deals. Pre-screened leads, allow me to do quick evaluations to decide if making an offer is warranted. I run the numbers to determine investment returns and determine my offer. It is important to move fast and make an offer when the opportunity presents itself.
Pan for Statistical Gold
Statistical analysis will also provide reliable data. Specific details about cap rate, price per square foot, and price per unit are important considerations. Sub-market analysis and location are equally important data. If you evaluate 100 properties when you are looking to buy only one, youre screening process needs improvement. Use the following statistical gold to target an investment market :
Rent Rates-historical rates (from a six year history) will indicate a trend and help you to predict future rents. (see: American Chamber of Commerce Research Association for cost of living rental factor for specific city data).
Vacancy- forecast changes based on fluctuations compared to six year historical patterning. Substantial fluctuation indicates a buy or sell market. ( Real Estate Broker can supply data or check Department of Commerce, Census Bureau, Washington, D.C)
Building permits issued- consisting of five or more units for apartment construction. (see city planning division for recent data check local library for resource records.)
Household income- indicates apartment value. As income rises, tenants ability to pay higher rents increases, eventually, affecting the value of property as net operating incomes (NOI) increase. Look for EBI or effective buying income statistic.
Employment- Look for employment data in County Business Patterns in the local library, or check the Chamber of Commerce resource statistics.
Number of Households- determine a more accurate number of renters than population. (see: Sales and Marketing Management from the local library for EBI number.)
Median Home Prices- available at the National Association of Realtors. If unavailable look for local historical data at the Chamber of Commerce.
Statistical data tools reveal market potential when you learn what to interpret from the numbers.
Market data and pre-screened team leads will provide valuable opportunities as you learn to experience and practice in various markets under varied market conditions.
Learn more from a proven Investor Education Resource:
Investor Tours University is a dedicated resource helping investors build wealth and achieve their defined level of success. We offer state-of-the-art commercial real estate investing education, tailored to meet the needs of investors with varied backgrounds and experience levels. Our faculty consists of a network of national experts in legal, tax, investment strategy, property management, acquisition and sales professionals who practice what they teach investors, which is how to achieve generational wealth using commercial real estate.
Monte Lee-Wen is an author, mentor, CEO and Founder of Investor Tours University. His website is http://www.investortours.com
ITU is a subsidiary of the Partnered Property Acquisitions Group, The PPA Group, of Austin, Texas. The PPA Group has holdings of over $40 million in commercial real estate with a projected target of over $100 million in commercial real estate acquisitions by the close of the forth quarter of 2007. Visit http://www.theppagroup.com
The PPA Group does business in all 50 states. Monte may be contacted at (512) 651-0513. ITU is the #1 educational resource for in depth commercial real estate investment education offering a proprietary investment system taught by Monte Lee-Wen.
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You are welcome to share this article, unedited, in its entirety with anyone. You may not remove this text. 2007 Investor Tours University.
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