Simply Junior

To build your commercial real estate business as an office in your local town or city, and to gain the right market share for yourself, you are going to need a ‘Strategic Marketing Plan’. Before you create the plan, you will need a ‘Strategic Marketing Position’.

In this way will you make an impact on a consistent basis with the right prospects and players of the commercial property industry. Simply you want the market, the business owners, the property investors, and all the local tenants and buyers, to know that you are the best out there and can help them with their special property need.

So before you start to consider your marketing plan it is worthwhile considering what makes you better than the other agents and brokers in the area. You should have a real reason in being different in your property business, and your prospects must know you for that. This is both an issue for the office and for you as an individual. Everyone in your office should be pushing the same story when they talk to prospects.

Do not say that:

You are the best in the area, and you know what you are doing You are honest with the client from the outset You communicate with the client every step of the way You have operated locally for 20 years and know everyone in town, etc

These generic statements are just that and are of no relevance to the people that you want to attract. Your reason for serving the property marketplace has to be significant and of benefit to the people that you deal with.

You can specialise in a single property type to achieve that relevance to the prospects that you want to attract. Consider statements like this:

We specialise only in retail shopping centre leasing and sales so that the properties we handle can optimise their rental performance, sales turnover, and landlord return given the local demographic and community. We know the industrial leasing and sales market and have a database that captures all the businesses and properties locally for that very reason. This helps out property clients know what competition they are up against, and how they can adjust and target the real opportunity available out there. Office property sales and leasing is our specialty because we have tracked the majority of local major buildings and tenants for some years now, and because of that we know who the major players are, and when they will need to relocate or dispose of critical assets.

This valued approach gives the client or prospect real comfort in knowing that you have something they can use. If you run a typical commercial real estate office, your major services to the clients you serve could be repackaged and focused as:

Professional advisory services in the strategy behind leasing, selling, and managing commercial property in the local business community. You incorporate the trends and sentiment of the local business community plus the decisions and directions of planning authorities so that your clients make the right property decisions based on facts. Target marketing of commercial properties for sale, and lease, using special marketing packages that offer the investment client real impact beyond the standard ‘advertise and wait’ approach that many other agents or brokers use. Property management services offering significant income and expenditure solutions that package and target the asset to the client’s investment cycle of property holding and expected returns.

This rebranding approach is like a business plan in one or two sentences. You give your office a reason to serve the local property investors and those landlords that need your help. When you and your staff start to live and work within the ‘brand’, the market starts to see that you are really different and better than the rest.

Introduction:

The Financial Accounting Standards Board (FASB) on August, 17, 2010 released their “exposure draft” requiring companies to record nearly all leases on their balance sheets as a “right to use” asset, and a corresponding “future lease payment – liability”.

The short answer is yes but it comes with a qualifier because it depends on which market you are talking about and how much improvement that you are expecting. As you may already know, the real estate marketing has been taking a battering in recent years and Georgia Foreclosures are at an all time high. In fact, many banks and other lenders are having trouble identifying clear ownership of Georgia Foreclosures because they have changed hands so often and so many lenders have went out of business.. With things being this bad it will take a lot of improvement to get it back to normal. You have to keep that in mind because although there will be overall improvement in 2011, it doesn’t mean that it will be banner year.

In the residential real estate, conditions have already improved for people wanting to buy Mountain Home Properties and many other residential properties. Some Mountain Home Properties that were considered luxury homes are now available at prices that middle-income buyers can afford. Mortgages are much harder to qualify for but if you can get a mortgage or have the money to spare then you can get some fantastic deals on Mountain Home Properties. By 2011 Georgia Foreclosures will probably be even higher because the market is still evening itself out. Most reports forecast that the real estate market will keep correcting itself through 2010 and 2011 will show the first real sign of improvement.

The commercial outlook has an even sunnier future. There are still a lot of commercial Georgia Foreclosures but studies are showing that more renters are making commitments as the months go by and 2011 will mark the first real progress for commercial real estate in years. The downside for commercial property owners is that the rents for these properties are lower than they have ever been.

Overall 2011 will see a healthier real estate market but one that is much more selective. In the past there were more realtors selling Mountain Home Properties than you could count. Many of them were part-time realtors and others were less than talented. The last few years of difficulties have culled the realtor herd and it has left the truly exceptional ones standing. That means that they are more selective about the clients that they work with and the properties that they represent. The upside for buyers is that they are much more likely to find you the right Georgia Foreclosures and Mountain home Properties to invest your money in.

Several real estate investing strategies exist, but not all generate profits, nor are they suited for every investor. To succeed in this market, investors should engage in thorough research to understand the pros and cons of each available strategy.

The most popular real estate investing strategies include residential homes, commercial real estate, and probate properties. Each type of property can be used in various ways. How investors generate a return on investment will depend on how much time they want to spend maintaining the property.

Residential homes can be used as vacation rentals, long term rentals, or combined with owner will carry financing. Vacation properties require more hands-on care than residential rentals. Investors will need to fully furnish vacation homes, maintain utilities, and thoroughly clean after each use.

Long term rentals don’t require as much maintenance, but property owners can incur expensive legal fees if tenants default on their lease or cause property damage. Nearly every landlord has experienced bad tenants and endured the time-consuming and costly process of eviction. On the other hand, conducting proper due diligence can minimize risks. At minimum, investors should obtain a current credit report, background check, and list of referrals.

One investment niche that is beginning to explode is that of offering seller-financing. Thousands of people have lost their home to foreclosure and cannot qualify for bank financing. Those who can qualify for a mortgage loan aren’t willing to pay full market value because the market is saturated with discount-priced foreclosure and bank owned homes.

Offering seller-financing can be beneficial to all parties involved. Sellers can obtain fair market value for their home by selling under a lease purchase option agreement or seller carry back trust deed. During the contract period, buyers tend to better care of the property because they are working towards purchasing it.

Owner will carry contracts usually extend for 1 to 3 years while buyers restore credit ratings. When the contract expires, buyers obtain a bank loan to purchase the property. If buyers cannot qualify for financing, sellers can extend contract terms or lease the home to other tenants. When buyers default on owner-financed contracts, sellers retain all funds contributed toward the purchase.

Several real estate investing strategies exist with commercial properties. This type of real estate is generally more expensive to buy and maintain than residential homes. Investors usually partner with other investors to offset costs and maintenance duties.

Some of the more popular commercial investments include apartment and condominium buildings, retail shops, and office buildings. Investors will need to carefully calculate the true cost of commercial real estate. Most require a dedicated staff to maintain the premises, collect rent, and attract new tenants.

Investors who do not want to manage commercial properties may want to consider investing in real estate investment trusts. Commercial REIT stock offers the potential for long-term capital gains and can be a good tool for portfolio diversification.

Lesser known, but potentially profitable real estate investing strategies are those involving probate properties. This type of real estate is held in probated estates. When estates are incapable of paying decedents’ outstanding debts or mortgage payments secured by the property, the real estate can be sold to eliminate financial burdens.

This investment niche requires investors to have a good understanding of state probate laws and the ability to scout out potential properties by searching public records. One of the easiest ways to learn how to buy probate homes is to network with other investors who specialize in this niche.

Although the real estate market is still downturned, there are plenty of opportunities for investors to generate profits. Calculating the pros and cons of each type of investment can help investors decide which real estate investing strategies to incorporate into their long-term plan.

Several key factors currently surfacing in Commercial Real Estate are moving quickly and if we look at these, we can see why multi-family/apartment purchases is a good investment class choice. In several areas of the country, demand is starting to reach the levels of supply. Occupancy rates are increasing. This upward occupancy rate trend will more than likely increase due to five main factors:

1. The economy is improving (very slowly). More jobs are coming online, making it possible for room mates and children who moved back in with their parents to go back into the rental market.

2. Echo-Boomers are over 70 million strong in this country and coming of age. The majority of these Echo-Boomers will be renters since the face of our national housing industry is being totally reconstructed with stricter purchasing requirements.

3. People are still losing their homes to foreclosure. They have and will continue to become renters for the foreseeable future.

4. There has been a virtual stop to any new apartment building construction with few exceptions. It will take time to turn that boat around and start these projects back up again; although any movement will now will be with greater caution than ever seen before to avoid over-building supply that helped to land us in our economic disaster since 2008. Obtaining permits, securing financing and construction, guarantee a slow start up for new construction.

A fifth, and the most interesting reason that points to why now is a good time to buy apartment buildings is that the CMBS (Commercial Mortgage Backed Securities) market is starting to pick up. This is a very important indicator of the turn around. If banks can once again package and sell their mortgages, then they will have more confidence in supply the financing to borrowers for new apartment construction. All indications show that this bond market is strong and deep.

The strong, larger banks will lead the way in the lending market, due to the weakness of many of our regional banks. This weakness is due mainly to the position these types of banks took by lending on commercial buildings and commercial construction loans which are in, or approaching default. The larger banks will start loaning again once they feel comfortable that money can be made and they can sell the mortgages off again. The regional banks are still foreclosing and agreeing to short sales on commercial buildings. As more loans hit their maturity 2011, 2012 and 2013, more of these apartment buildings will hit the market.

Another Perfect Storm…
We heard a lot about the “perfect storm” that brought down the Real Estate market and sent this country into recession. It looks like another perfect storm is coming; this time a good storm that will get us and commercial real estate back on track. What are this storm’s dynamics? We have two banking groups: the first group is healthy, has money to lend, but is waiting on the bond market turn. These are the larger banks. The other group is comprised of the local and regional banks that made loans now defaulting. Under each groups’ current lending environment we have comparatively cheap apartment buildings for sale today; much cheaper than replacement costs.

An overwhelming conclusion is that if you have cash, buy now! Buy now before occupancies rise and the large banks start lending again, because when that happens the assets will no longer be as cheap as they are now. Be smart and research each market and building thoroughly, but do start purchasing today! The recovery storm is under way and prices will rise again.

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