Im begining investor,how do i know if a property is a deal ? what are the most important things to look for ?

In Buying Property - Asked by Gilbert T. - Apr 26, 2009
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Answer(s)

Paul P.
Broker/Agent
Stamford, CT

Deals come in many varieties: upside through improvements, low price and good cash flow from a distressed seller, low price because a property is poorly managed and has not reached its potential, etc. Many people take years to find out what a good deal really is. I suggest you invest in an income capitalization course from your local appraiser association chapter. This will teach you about investing for cash flow. Call any commercial property appraiser and ask how to find a local course.
You shoul also read the book Confessions of a Real Estate Entrepreneur by Jim Randal. All of my new agents MUST read this before they begin working for me. It is the best primer on commercial real estate that I have ever read.
Finally, if you don't want to read or attend classes, work with five or six different commercial agents in your area. Look at a lot of properties. You should probably NOT look at properties that need rehab or other significant repair or repositioning money. Stick with non-residential leased properties that have stable tenants. Go over the logic and financials on each property with the agent and learn from them. When you see enough of them you will get a sense of what is a good deal or not. Please visit our web site and email me if you have further questions. Thanks and good luck.

Apr 27, 2009
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Robert R.
Owner/Investor
Yardley, PA

Depends on the property type, i.e, multi-family, land, commercial /retail, etc, etc,

Apr 27, 2009
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mike w.
Owner/Investor
Joseph, OR

In an effort to keep it simple I would tell you to have them show you the money.
Don't look at gross look instead at net after bills.
Don't pay money for the future pay only for the past. No one can predict the future but they all will talk about the future upside.

Apr 27, 2009
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Paul S.
Broker/Agent
Glendora, CA

Look at what the property is doing now. Remember the future is the future. There are many measures that you can compare properties to each other with (such as cap rate, IRR, capital accumulation, etc.) to help determine which is best on paper. But there are many intangeables that can change the outcome. Be conservative with your numbers in the future. Always, always remember that whatever you estimate in the future will be wrong because it is the future. Use numbers and estimates as a gage for comparison purposes but don't think they are cast in stone.
If you would like more help contact me a paulsylvester@remax.net or 626 485-5163.
Paul Sylvester, CCIM

Apr 27, 2009
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Scott R.
Broker/Agent
Manhattan Beach, CA

A deal is first and formost always in context to its local market. There are virtually no across the board ways to simply distiguish a "good deal" with out having local insight and perspective. You must absolutely first locate a few areas you are willing to invest in then study those markets, learn the benefits and risks as well as the sales statistics of those markets. Naturally, speak with a couple local brokers who specialize in the product and locale.
For more information, feel free to visit www.rhequities.com and email or call me.
Best regards,
Scott

Apr 27, 2009
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Jason F.
Broker/Agent
Phoenix, AZ

Whatever you do, stay away from pro-forma packages. These are the lies brokers use to get you to transact a deal. The best advice is to educate yourself. Without real knowledge, you will only allow others to talk you into something you don't understand.
And, please, stay away from rental houses and no money down cash flow schemes.

Apr 28, 2009
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Billy G.
Broker/Agent
Beaufort, SC

Don't quit your day job....

May 7, 2009
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Tai L.
Broker/Agent
San Diego, CA

Drive around the radius (competition, do rent surveys, look for new construction), personally do a physical inspection and due diligence. Are you going to manage it or hire a property management company?

May 22, 2009
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