Reonomy helps investors search properties and connect with owners in any market nationwide, including specifically within Opportunity Zones. Learn more here.
|TABLE OF CONTENTS|
|Finding Multi Family and Commercial Investment Properties|
|1. Commercial Real Estate Listings|
|1.1 Multiple Listing Service (MLS)|
|1.3 Ten-X Commercial|
|2. CRE Investment Companies|
|2.1 Cushman & Wakefield|
|2.3 Colliers International|
|3. CRE Investment Software|
How to Find Targeted Multi Family and Commercial Investment Properties
The fact of the matter is, commercial real estate investment can have high barriers to entry.
Given the magnitude of every investment decision, one of the biggest hurdles to overcome is finding investment property for sale, where the numbers pencil out, and the long-term benefits are evident.
Another hurdle that can be difficult to overcome, of course, is coming up with the up-front capital needed to purchase a commercial property.
Most lenders require you to put down at least 25% of the purchase price. On a $1 million investment, that’s a $250,000 payment right out the gate, without including cost of due diligence, attorneys’ fees, and closing costs.
It’s imperative for real estate investors to thoroughly scour the market to identify the investment property for sale that presents the most opportunity.
The best ways to do so are to:
- Search both on and off-market for targeted assets.
- Work with investment companies if and when needed.
- Back yourself with the right set of investment software to analyze opportunities and connect with owners—and scale the process over time.
Below, we’ll look at the best options for investors of all sizes—from hobbyist buyers of duplexes in small markets, to institutional firms buying office building portfolios in primary markets, and everything in-between.
Commercial Real Estate Listings
Finding a good deal can be like finding a needle in the haystack. Real estate investment companies often have entire teams of people sifting through opportunities at any given point in time.
As a starting point, investors and brokers can begin looking through commercial real estate listings on the following websites:
Multiple Listing Service (MLS)
The Multiple Listing Service database, otherwise known as MLS, is an aggregation of investment properties for sale around the country.
It is where many individual investors and brokers initiate their search.
MLS syndicates data to multiple third-party websites, like Realtor.com and Redfin, which makes these listings available to everyone, even your 75-year old Aunt Mary who has never owned a piece of real estate in her life.
MLS is a subscription-based platform. Having a membership gets you immediate access to listings as they come to market, typically before they’re syndicated to other online platforms.
One way to leverage MLS is to sign up for automatic alerts. Define your investment parameters (e.g. multifamily properties with 5+ units, mixed-use projects, or vacant land, for example). You’ll get an email or text alert as soon as a new listing within those parameters hits the market.
Still, subscribing to MLS only puts you one step ahead of the rest of the competition. To avoid the bidding war, contact the listing agent immediately.
Get a copy of all pertinent property-related data, such as a copy of the most recent rent roll and all operating expenses. Build your pro forma and run numbers quickly.
If it looks to pencil out, see about doing an exclusive showing and then, if you want to move on the deal, make an early and aggressive offer. Otherwise, using MLS to find investment properties for sale is no different than casually perusing the syndicated websites that other investors are browsing.
There are two other variations of MLS to be aware of:
CIMLS is the commercial investment MLS. Just as MLS is used to find residential, mixed-use and land deals for sale, CIMLS is used for people looking specifically for commercial opportunities.
Meanwhile, Commercial MLS is a regionally-focused version of MLS used by those searching for commercial real estate listings in the Washington and Oregon areas.
LoopNet is one of the most widely-used commercial real estate listing platforms, used by those interested in both investment property for sale as well as properties for lease.
The properties listed on LoopNet tend to be larger (in terms of actual size and price). For instance, MLS will often have 1-4 unit rental properties available for sale, while LoopNet will advertise more 5+ unit multifamily properties.
The platform includes a bevy of other asset types as well.
LoopNet is also a subscription-based service. There are multiple tiers, with the lowest providing just access to the listing and basic details, with the highest-priced option offering more robust data such as comps, owner records, mortgage information and more.
Ten-X Commercial is an online platform that not only provides access to investment properties for sale, but also provides end-to-end services for those who want to purchase commercial real estate directly through the website.
Ten-X is one of a new breed of online commercial real estate purchasing platforms, and one that has really risen to prevalence in recent years.
In many ways, Ten-X Commercial acts as a middle man between buyers and sellers. It essentially serves as an online broker for those wondering how to find investment properties.
Ten-X brokers these transactions for a minimum fee agreed to in advance, or a transaction fee equal to a percentage of the winning buyer’s offer (sales price), whichever is greater.
This provides transparency for those concerned about closing costs stacking up.
Ten-X Commercial offers deals of all types and at different price points. For instance, an 86,000 SF office park in Monterey Park, CA sold on the platform back in October 2017 for $10.5 million.
Meanwhile, a small retail strip center recently closed for $3.45 million through the website. Whether you’re looking for multifamily, office, retail, industrial or hotel deals, Ten-X has investment properties for sale worth exploring.
It’s also worth considering the benefits of going off-market to search for investment property for sale—or perhaps more precisely, investment properties likely to sell (based on a number of proven qualifiers).
Reonomy’s property search allows you to find properties of any asset type (other than single family homes), in any market in the United States.
Properties can be searched and identified by:
- Multiple sub-categories of every asset type.
- Building and lot size and age.
- Whether the asset is within an Opportunity Zone.
- Sales and debt history.
- Current business tenants.
- Tax history and growth/decrease.
- The name of the owner.
Once you’ve identified what looks to be an ideal investment property, you can dive into individual research profiles to learn more about the property, its owner, and its owner’s full portfolio.
The Reonomy platform can then be used to access the contact information of those associated with ownership—including the individuals apart of an owning-LLC, so investors can reach out directly to decision-makers.
|Listings Platforms for Specific Asset Types:|
Commercial Real Estate Investment Companies
Online listing platforms may be fine for novice and smaller-scale investors, or those considered “hobbyist” investors.
However, those looking for more substantial commercial real estate investment opportunities may want to consider working with a commercial real estate broker.
They work with owners to list properties and procure the buyers. They also work with investors to help them find ideal buying opportunities. They’ll even help arrange the financing across all asset classes.
Other brokerage firms are more narrow in focus. Perhaps they focus solely on the hotel industry, or on buying/selling multifamily housing. Here are a few of the top commercial real estate investment companies that can help you find investment properties for sale.
Cushman & Wakefield
Cushman & Wakefield has more than 400 offices in over 70 countries, so this full-service brokerage firm is certainly a force to be reckoned with. Cushman & Wakefield has an in-house research team that is always monitoring the market, looking for changing markets and evolving investment opportunities.
The company prides itself on offering client-centric solutions for commercial real estate investors of all kinds.
CBRE is one of the leading commercial real estate sales brokers in the U.S. Their website allows users to search for U.S. commercial property sale listings by property type, location, and specific deal criteria.
As of June 2019, CBRE had nearly 2,200 commercial real estate properties listed for sale on its website – ranging from retail pad sites in Aurora, IL to a high-volume grocery anchored retail center in Mission Viejo, currently listed for north of $2 million.
Colliers International provides a full suite of services for commercial real estate investors.
They will not only help lease or sell investment properties, but they’ll also provide robust investment management services to institutional investors, endowments, foundations, family offices and high-net-worth individuals seeking to generate greater returns on their investment portfolios.
In total, Colliers has more than $20 billion of assets under management across the U.S. and Europe.
Commercial Investment Software
After learning how to find investment properties through these various channels, the next step is for a commercial real estate investor to analyze the deal. Finding a deal is half the battle.
Making the numbers work is the next feat to overcome. Here are a few of the tools real estate investors and brokers can use in their due diligence process.
Argus is an open and integrated platform for valuation, budgeting, and asset management solutions used by professionals in the commercial real estate industry. At a basic level, it can be used to create pro formas.
It can also be used for asset and portfolio management, budgeting and strategic management, valuation and cash flow analysis, and investment and risk management.
Argus is one of the more sophisticated commercial real estate investment software applications. In fact, there are so many nuances to Argus that they even offer Argus Certification courses!
That said, many of the Argus features can be used on the fly by people who have a strong understanding of how to use Microsoft Excel.
If Argus is the most thorough commercial real estate investment software, PropertyMetrics bills itself as the “easiest way” to analyze commercial real estate.
The software allows users to build pro formas, step by step, and then provides insights about the cap rate, internal rate of return, and net present value.
PropertyMetrics also helps users create equity waterfall models, which is often a critical piece when formulating the capital stack.
VTS is a software designed specifically with investors in mind. VTS helps commercial real estate investors track deals and monitor their leasing pipeline to improve conversion rates.
By providing high-level oversight of an investor’s portfolio, VTS helps investors make better deals by leveraging real-time tenant, market and sales data.
In the end, the right combo of the above platforms and companies can help any investor make sure that they are making the most lucrative, informed decisions possible, for any asset class, in any market.
Reonomy can be used as a tool for investment identification, as well as an investment software tool for analysis. Where Reonomy differs from any of the other platforms mentioned in this article, is that it can also provide detailed owner contact information on top of doing everything else.