Why Most "Buyers" Will Lose Out On The Best Commercial Real Estate Deals

Investors commonly hear about steals in the Las Vegas commercial real estate today like apartments selling for $ 10,000 per door or retail centers at $ 40 - $ 50 The reason for this is passive buy it is not buy anything. This reason for this is simple - the average private investor simply is not prepared to buy a really troubled asset. Investors poking around Las Vegas commercial real estate assets notice that opportunities are available in all asset classes for pricing that is well below replacement cost.

For instance, retail centers can be purchased at $ 70 - $ 100 per sf, office and industrial at well below $ 75 per sf and multi-family properties at $ 15,000 - $ 20,000 per door. For a savvy cash buyer, this represents huge This opportunity to come in, buy well located properties at steep discounts but in order to do this, we have to hold an asset through this cycle and have a sound strategy for lease up. space within that sub-market, the costs to lease up and realistic market rates.

This is not possible due to this property is easily rentable, it will not be as severely distracted and should An old friend of mine, Ron, who made a killing after the real estate crash of the 1980 s had a simple formula for buying troubled properties.

1. Do not "low-ball" properties because banks and other sellers will label you a bottom feeder and stop dealing with you. Offer realistic pricing and show that you are capable of closing.

If you need more than 60-90 days to close, you & # 39; re probably not competitive in this market place. To really steal properties and / or notes, you have to be prepared to close much quicker.

3. Once you & # 39; ve bought something, offer extremely low lease rates to start coupled with high responsibilities to lease up the property.

4. Most importantly of all, do not be afraid to pull the trigger due otherwise miss the "bottom"!

What exactly will likely happen is that as the economy improves, so will Will it be a good time to prime, the REIT & # 39; s and other institutional buyers are quietly buying good properties The performance of many assets and the opportunity to buy at the bottom will have come and gone with most investors being standing by chasing pricing that never really exists in the first place.