Isn't Commercial Property Really About the Numbers?

I was in a meeting just the other day and the speaker was saying, "Listen guys, it is really all about the numbers, it is simple math." I got me to thinking. Are not, all of businesses about the math at the end of the day?

Every commercial building started with the land and an idea of what to do with the land, did it not? Next came the money men, did the numbers work to start the project? Would he make his money back after getting it zoned and entitled? Then the builder is brought in, could he build the building with in the budget? Would the developer make his money based on his projections of construction? Could he get a loan to pay off his construction loan? Then the leasing and management company, could they lease enough of the building to start paying for itself? When they got it fully leased, did it make the money it was projected to make?

All these things came down to math at the end of the day. Did they make more then they paid out? Is that not the true nature of business? Win and take the money to the bank? Lose and close up shop, file bankruptcy and start again.

Look at some of the developers in this current real estate down turn, a lot have folded, some are still standing, much smaller in size, however; they are still in business and still selling homes.

Commercial buildings have been built, only to stand vacant, because the tenants downsized or closed up shop.

At the end of the day it is all about the math, dollars and cents. Do the numbers work?

This is part of the training provided by the National Association of Commercial Real Estate Property Scouts. Check them out at http://www.nacreps.org/

Ted,
Professional Commercial Real Estate Property Scout

What is Commercial Real Estate Scouting?

O.K., you are looking for commercial property. You find one, o.k., now what? Do you have the investor or partner to buy the deal? How do you know it is a deal? How do you know, what to do?

Commercial Real Estate Property Scouting is a learned art and a practiced art. You have to know what you are looking for to know if the property you found is a deal or not. So you do you know? You get yourself trained.

So how do I get trained? You can buy books on the subject and learn the mechanics. You need a money partner or investor to make the deal work. What are their critirea? What do they think is a good deal. Every broker or owner thinks they have the best deal, and they can show you on paper. Unfortunately, paper does not pay the bills or buy the property.

You can attend a boot camp on how to find commercial property and the basics of how to tell if the property is a viable deal. Again, I ask, how can you know for sure it is a deal and who will buy it?

If you network with people and find partners and investors and do your homework, verify the numbers and other information you have gathered, then maybe you can put a deal together.

So to be a professional commercial real estate property scout, you have to get trained and find investors that will look at your deals. You have to find out what makes a good deal for them. You then have to scout for the property that meets their requirments and verify the numbers and particulars that make it a good deal. Then the investor has to make the offer and get an accepted contract. The deal has to close and you as the scout get paid. Then you are a Professional Commercial Real Estate Property Scout.

You can find out more at http://www.nacreps.org/ They provide training and have investors that will take the deals.