What you should look for in Commercial Real Estate today!

When the market was hot in a growth area, raw land was the king of the hill. For some investor with deep pockets, land banking of raw land is their current strategy. Others are staying on the side lines, knowing it will be a few years before residential construction starts up again. Some developers and builders are selling off inventory to reduce their expenses.

There were two recent acquisitions that catch my attention.

In the first transaction, luxury destination club Quintess announce a $210 million equity commitment from an unnamed investor to pursue luxury residences and residential development sites around the world. This infusion of capital is the largest of its kind for this Colorado-based company in its 10 year history.

“There are so many distressed properties out there,” remarked the Vice-President of Quintess. “Like every other investor, you don’t want to catch a falling knife, but it’s certainly easier for us to get in on the ground floor of five-star resorts.”

I love the visual. And he’s right. You’ve got to be VERY careful attempting to catch a falling knife, but there are many investors flush with cash just looking to take advantage of this market.

The second huge transaction in this market segment was made by a privately held Dallas investment group who announced the purchase of five resort communities, in three states, for approximately $181 million from Centex Homes. When fully developed the acquired portfolio will be worth about $1 billion. Nice.

These five communities will be re-branded TerraMesa Resorts and are located in The Hollows on Lake Travis and The Waters at Horseshoe Bay Resort, both near Austin; Pointe West in Galveston, Texas; Bear Lake Reserve in North Carolina; and South Peak Resort in New Hampshire.

Other investors are looking for properties that have some current cash flow and the numbers show that after the purchase, there will still be a little cash flow, as the property is rehabbed and management problems are fixed.

Savvy investors I meet, are now looking at hitting a little single here, a little single there, not a home run (big payday).

Not surprisingly, they are looking at cash flow. They are looking to expand their portfolios by including properties that bring in cash.

They don’t have to be in the best shape, but they should be producing some income. They are now looking at office buildings, apartments, self-storage units, and mobile home parks.

So as a scout, I still look at raw land, but I have added looking for office buildings, apartments, self-storage units, and mobile home parks to my searches.

To your scouting success.

Are you Scouting?

Are you scouting for Commercial Property? If you are, are you making progress? Who are you scouting for? Do you have your investors lined up to make the deal happen?

Are you scouting for Commercial Property? Did you get trained or did you figure it out on your own?

Where are places where you can get trained? You can go to a 4 or 5 day live seminar for $4995.00, but will you know how to look for a commercial deals? You can then attend to a day or two day seminar on the how to evaluate a commercial. When what?

O.K., now you are a property scout. What are looking for? Raw Land? Apartments? Office building? Industrial or warehouse? Self Storage? Mobile Home Parks? What are your requirements?

Who are you scouting for? A single investor, a group of investors or a company? How deep are their pockets? What is their criteria for each type of property?

A lot of questions, huh?

Well good news! There is a place you can find the answers and and get help when you need it.

It all starts with a visit to http://visit.dirtintocash.com

There is a great organization that stands behind the training and the scouts that have been certified.

Check it out and start scouting for real.

Ted

Are you scouting hard or hardly scouting?

Are you scouting hard to find properties or are you hardly scouting, thinking that a property will just magically appear? What are you doing to make it happen?

I had a friend of mine said one of his favorite quotes was “You can’t hire someone else to do your push-ups for you.” If you’re planning on reaping the rewards of stronger muscles, and bones, and toned arms, chest and back - you’ve got to do those push-ups yourself!

Some of you might be thinking, “Geez, how profound!” But its amazing to me how many people are willing to make excuses for their lot in life, but not be willing to take the responsibility to change it!

One of the most pervasive myths in American culture today is that we are entitled to a great life. Somehow our lives are to be magically filled with abundance, and great career options, and joy, and wonderful relationships.

To a certain extent, I agree. We should have abundance, and great career options, and joy, and wonderful relationships and super health. The difference between what I believe and what others might believe, is that I believe we are in charge of creating those things in our lives rather than being entitled to those things.

In the words of Jack Canfield, “If you want to be successful, you have to take 100% responsibility for everything that you experience in your life. This includes the level of your achievement, the results you produce, the quality of your relationships, the state of your health and physical fitness, your income, your debts, your feelings - everything!”

Ok. That all sound nice. But what does it really mean?

It means you’ve got to manage the things you can manage. Monitor them. Evaluate them. Change them if necessary. You are the manager of the thoughts you think, the images you visualize, and the actions you take. If you don’t like what you’ve produced so far, then its time to monitor your thoughts. Evaluate them - are they more negative or more positive. If they are more negative, change them. You’ve got to monitor the images you hold in your mind. If they are images of lack, or fear, or worry over some negative outcome. Change them. Change what you dream about. Dream big! Dream positive! Dream wondrous dreams of a bright future! Finally, monitor your actions. If you are not doing the things that support your goals, then evaluate what needs to be done, and take the actions necessary to change them.

You must decide to take 100% responsibility for everything that happens in your life. That’s the hard part sometimes. You must acknowledge that you have created your experiences - your successes and your failures. If you accept that premise as true, think of the POWER you now possess! If you are responsible for all experiences in your life, you can change them and take charge of creating the future you want!

Of course, you’ve got to give up any excuses. You’ve got to give up the blame game. You have to give up complaining.

You must monitor your own reactions to the events that surround you everyday. As a Property Scout, searching for the best Commercial Real Estate Oportunity — you can get off track. But expect the best, and that’s what you’ll get!

It reminds me of an old story about a wise man sitting at the side of the road on the way to a nearby village. A traveler stopped and asked the wise man, “What are the people in this village like?” The wise man responded, “Well, what were the people like where you came from?” The traveler said, “They were mostly sullen, and angry - not at all friendly.” To which the wise man said, “These villagers are much like the ones where you came from.” A while later, a second traveler stopped and asked the wise man, “What are the people in this village like?” The wise man asked the same question of the traveler about what the people were like where he came from. The traveler responded, “Oh, they were very friendly, happy, helpful - all in all joyous people.” The wise man said, “These villagers are much like the ones where you came from.”

The point of the story is obvious. You get what you expect.

As Property Scouts, you will get what you expect. You work hard, you monitor your thinking, and your images, and your actions. You change what’s not working for you. You don’t make excuses. Your results begin to improve in ways you only imagined.

Is this easy? Nope. It takes focus and practice and awareness. It takes desire to achieve abundant results.

Remember, you’ve got to do your own push-ups if you plan on reaping the rewards.

If you are serious about scouting, check out http://visit.dirtintocash.com and get all the training and skill set to scout hard and find lots of good deals.

Looking High and Low

I get asked a lot, what is it like to scout for commercial property? I say scouting for commercial real estate is easy, because commercial property is everywhere. But how do you find the deals, is really what they to know.

The way I scout is totally systematic. State by state and property profile by profile. What that means is each type of property has certain parameters that have to be met. For example, when looking at raw land, you look to see if the property is in the path of progress. What is the price per acre? What is the as-is value? What is the highest and best use of the property? What will the property be worth after it has been entitled?

When looking for office building one key factor is price per square foot. The Net Operating Income (NOI) and capitalization rate (cap rate) are also key factors in determining the value. What condition is the building? Is the building located in an area where you will be able to rent up the building after repairs? You would not want to buy a building is a declining area.

In apartment building you go by the price per door and the NOI and cap rate. Again, the condition of the building, plus the vacancy rate are terminating factors. Management of the apartment complex is another major factor in figuring the viability of turning around the property.

Mobile home parks are figured by per door price along with the NOI and cap rate again. Also, what class is the park, A, B, C? What amenities are in the park? How old is the park? What size are the slabs? Are the spaces individually metered for electric, gas and water?

Assisted and senior living, the price per bed is critical. What is the occupancy rate? What is the NOI and cap rate? What services and licenses are in place?

Industrial and warehouses are pretty user specific. So you have to have a user in mind or know you can change the use of the building before you chase the deal. Price per Square foot is king, because most building are vacant or will be vacant soon. Again, location is very important and is that part of town still growing.

So at the end of the day. You have to look high and low, state by state and property by property.

The property deals are out there everyday and in every state, you just have to look.

If you really want to learn commercial property scouting, check out http://visit.dirtintocash.com

Happy scouting

Ted