Investing in commercial real estate in 2013

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Commercial real estate investors ready to turn the page

Thwarted by a continued uncertainty, a languid recovery and a challenging environment for investment, investors are looking forward to put the past behind them and turn over a new leaf, according to a new annual report titled “Expectations & Market Realities in Real Estate 2013—Turn the Page,” which was published as a joint venture between the National Association of Realtors (NAR) and Real Estate Research Corporation (RERC), Deloitte.

The report states that investors have come to realize that this particular atmosphere will possibly remain for some time and that attunements may be necessary to maximize performance and yield of commercial real estate in this sluggish economy. One such adjustment made by investors is the wholesaling of commercial real estate.

Wholesaling commercial real estate opportunities in 2013

Investors are increasingly considering wholesaling commercial real estate in 2013 in order to achieve significant profits in a short time.  In what way is the commercial real estate market transforming at this juncture? What are the best opportunities to realize this year? Find out now.

The requirement for wholesaling commercial real estate in 2013

Commercial real estate has fallen later compared to residential following the bursting of the bubble. Hence, it has taken a slightly longer time to bounce back but the common agreement is that the commercial market has reached its lowest point, has established new bedrock to gather momentum and is ready to start growing once again.

The growth of the economy may not be the speediest at the moment but there are numerous determinants functioning to propel the commercial property sector. Fresh startups are capturing space in order to launch while large existing organizations are planning to shift base in a major way since they are now not fastened to old fortresses due to a dearth in talent and technology. Investors from all across the globe are beginning to channelize their funds into establishing commercial properties.

This highlights the growth in both the demand and the amount businesses and investors are ready to pay just to get that extra space, particularly as they hurry to make the most of yields prior to cap rates getting tapered off and the interest rates shooting up. Simultaneously, mortgage lenders will possibly impel foreclosures on the properties as both demand and values go up. This atmosphere is conducive for wholesaling of commercial real estate so as to achieve sizable and speedy profits.

What’s the difference?

There are three vital differences when it comes to wholesaling commercial real estate properties compared to single family dwellings.

Financing

The mortgages on commercial properties are entirely different compared to that of residential. This indicates that they are much easier to get at present and depend more on the property and not the individual purchaser. Underwriting for such loans can be seen to be softening up in the same way as it’s getting difficult for residential investors.

Marketing

Diving into multifamily, industrial or retail property or even office indicates marketing to an entirely different demographic compared to individual dwellings. Find out what they require and what’s of significance to them.  Also, get to know the best marketing mediums to reach out to them.

Due Diligence

Due diligence is slightly different too. The determinants which have to be taken into consideration are little different. Lender requirements may also vary. These include environment reports, rent rolls and appraisals. Get to know the difference and you’ll do well.

Where should you invest?

Look around for distressed properties, non-performing loans, distressed tenants, proximity to transport hubs and large businesses and government initiatives in various locations before making an investment in commercial real estate.