Month: November 2022

As the old adage goes: “Buy land because they’re not going to be making any more of that stuff.” But the process of buying land is a bit more complex than that.

Buying commercial real estate is an excellent way to diversify your investments. There are several different kinds of property to consider investing in, each with its unique benefits and drawbacks.

We’ll now take a closer look at why investing in commercial real estate is bright and how to use it to your advantage.

 

What makes commercial land so valuable?

Commercial real estate is a good investment because of its multiple benefits. First, buying real estate allows you to control how it’ll be used and make various ways of earning income from it.

Some companies rent out space for their building instead of buying the property outright. It allows you to charge tenants for using your land.

You could also sell some or all of the land if its value increases. This includes:

• Minerals use rights
• Land use rights
• Mining rights
• Forest rights

 

Land values don’t fluctuate as much as other investments, so they’re likely to increase over time, making them an excellent long-term holding for your portfolio.

Commercial real estate is a good long-term financial decision because you can borrow against it when you need cash. In addition, banks often consider commercial property an asset because it’s hard to lose and has a high resale value.

If you can get a loan without having to post any personal assets as collateral, you can use that loan to invest in other projects that generate even more income.

 

Some questions to ask when buying commercial land

Before buying commercial property, you should ask some important things. Here are some examples of these types of questions.

 

What will you use the land for?

What’s the reason for buying the land? You can construct a commercial building on it or lease it to people who hunt and farm. You could also sell off the ground and make a small profit, either now or later.

 

What value does the land have?

You need to know the collective values of the land and any features that increase its overall worth. For instance, commercial land in Dallas, Texas for sale near a major road might be worth more because of its ease of access than land in an isolated part of the woods.

But if there are many forested lands available, then it may be worth buying them so that you can sell the wood. Again, knowing the actual value of your property within its location, assets, and other features will benefit you in generating income.

 

What do you need to do to maintain the land value?

Land maintenance is just as crucial as getting the most for your investment. Therefore, an environmental assessment plays an enormous part in land investments and cannot be ignored.

If your investment fails to meet the environmental standards required for its use, its ability to generate profits will be significantly reduced.

Maintain your property, and it will retain its short- and long-term value.

 

Some things to look for when buying commercial land

Before buying commercial real estate, you should consider these factors when deciding whether or not to buy:

• Value for Money 
• Market Conditions
• Improvements or Developments
• History of Land
• How the Neighbors are using their land 
• Zoning Restrictions 

You’ll want to gather information about the state of the local real estate market currently and any potential future use for the property through CREOP’s commercial real estate om. You can do this through conversations with realtors, research, or working with an expert in the field.

Before buying any property, be sure to research its historical background thoroughly. For example, you want to know if there has ever been anything built on the land before and whether the ground has had any previous uses ~ all this information is available in the offering memorandum template of CREOP.

One important thing to remember when buying land is that each piece of land comes with its own rules and regulations. Make sure that the land you buy is suitable for the purpose you plan to use it for. For example, if you would like to build an office building, there might be restrictions on that type of property in that zone

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Is vacant land an investment?

Consider vacant land if you’re looking for an excellent way to invest in real estate. Before you buy, however, you must know what you want to do with the property.

That said, vacant lands carry many uses. For example, you could find a property developer to buy it to develop it. You could also lease it to a company that needs to build on it. Or you can keep it until the value increases, and then you can resell it.

Vacant land is one of the most flexible types of land investments. Consider working with a commercial realtor to help locate a property that fits your needs and financial objectives

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Which types of land use do people tend to be concerned about?

There are three main types of uses for which plots of land are divided up: residential, commercial, and industrial. 

• A residential zone island that’s used for residential development. People usually live there in either single-family houses or apartment buildings.
• “Commercial” means property zoned for business uses. It can be near properties zoned for residential or industrial purposes, depending on what is being constructed on the property.
• Industrial properties (often called “industrial” or “manufacturing”) are lands that are zoned primarily for industries such as factories and warehouses. Therefore they may be closer to commercial properties than residential ones.

There are various kinds of land use, but here are the most common ones. Working with the right real estate professionals can let you decide which type of land is best for your business.

There are several common issues with land investments

It would help if you were aware of common pitfalls when purchasing your first property.

Remember that land belongs to Mother Nature. Your ideal property may have problems with floods or other natural hazards. It may also be located in an undesirable place prone to crime and other human-created inconveniences.

It’s important to know that these issues can significantly impact the value of the property and your initial outlay. However, you will likely experience a shorter return on your initial cost. But you’ll be almost guaranteed to earn profits in the long run.

If you work in commercial real estate, you are most likely familiar with the term commercial real estate OM. While many businesses send out marketing flyers and brochures to the public, a strong commercial real estate OM (offering memorandum) can garner interest from qualified prospective investors and lead to a deal.

In this article, we explore what a commercial real estate offering memorandum is, how it is used, and explain how you can improve your own OM.

 

Defining the Offering Memorandum

An OM is an important report that is shared with prospective investors. This report generally gives a thorough overview of the property and the property’s financials.  

 

Here are more specific details on the content of the OM:

• Building details such as property and location overview, demographics, and management
• A summary of the property’s past, present, and prospective income and expenses.
• Financial statements, which include a rent roll, tenant profile, multi-year cash flow projections, and financial metrics
• Property images, aerial maps, site plans, and stacking plans.
• A confidentiality agreement

 

Examples of Commercial Real Estate OM

When a commercial real estate owner or developer wants to raise capital and update an existing property or buy a new office building privately, they will make use of a private offering memorandum. 

Typically, a private offering memorandum sent to professional contacts is exempt from federal and state security regulations. However, if you make an OM that is targeted to the general public, you can only send it to accredited investors.

 

How to Improve Your Commercial Real Estate OM

 

Make it readable. 

Your OM needs to be easy to read, straight to the point, and overall it should be engaging. Stick to a simple font and space out the text. The writing should be structured with a clear heading, subheadings, and paragraphs. Stress key points in the writing by boldening text.

 

Present high-quality images. 

One way to engage the reader is by showing them quality, high resolution pictures of properties. A professional photographer can take interior and exterior photos with drone aerials. These types of photos will captivate potential investors.

 

Make the financial details presentable. 

You should not copy and paste your P&L statement from a spreadsheet. Instead, make use of an offering memorandum template. This is a much more professional approach to engage prospective investors. 

 

Have a strong call to action. 

The call to action of an OM is typically written in the form of a confidentiality agreement, or more commonly referred to as the NDA. 

 

Conclusion

When it comes to making a strong commercial real estate OM, you need to have short, snappy text, high-quality property images, and easy-to-read financial information. Once you have those details taken care of, you can start seeking out investors for an offering. It can take a lot of time and effort to make a well-designed OM, but it is worth taking your time to attract serious investors’ attention.

As the year 2022 comes to an end, many commercial real estate brokers are trying to fit in at least one more deal. In this article, we share five commercial real estate marketing tips for you to make a new deal nearing the end of Q4. 

 

The process of making a deal so close to the start of a new year is challenging. Between now and January 1st, both you and your clients are busy with certain responsibilities and holiday festivities. Ultimately, schedules get busy, and you have fewer working days during the holiday season.

 

While making a deal during the holidays is a challenge, it is not impossible. Let’s dive into the ways that you can increase your chances of ending the year strong with one more deal:

• Strategize your outreach efforts.

 

Try not to get caught up in the reasons why it might be too late to make a new deal before the year ends. You need to strategize your outreach efforts because there are still many prospective clients who are interested in selling or refinancing their properties before the start of the new year. Your job is to seek out those eager prospective clients as soon as possible. 

 

With AI-powered commercial real estate software, you can find out which properties are most likely to quickly sell or refinance. You also receive dependable, true owner contact information- not just an LLC. Our software can also offer you accurate sales comps so that you can be on top of CRE market trends and build negotiations as you close a deal.

• Send clients your holiday greetings.

 

The holidays can be a hectic time. You need to make sure that you are still a priority to your clients, and the best way to do this is by sending them holiday greeting cards. 

 

It is important to check in on your current, past, and potential clients. If you have any active clients, you could send them a gift basket or a bottle of wine to send them well wishes. For previous or prospective clients, we recommend sending a holiday card or even making a warm, personal phone call. These gestures can spark meaningful conversations and remind clients that you are here for them and ready to make a deal if they want.

• Invest in a CRM platform.

 

You need to invest in a solid customer relationship management (CRM) platform so that you can keep track of your client contact list, increase your chances of closing a deal, and make sure you never miss a follow-up with prospective clients.

 

CREOP’s CRM was designed by commercial property marketing professionals who know what brokers need to drive deals and build a successful customer base. 

• Set up targeted end-of-year campaigns

 

An effective way to make a deal during this time of year is by creating an End-of-Year (EOY) campaign. Make sure your campaign is enticing so that you can grab the attention of relevant contacts that you reach out to.

 

In order to run an EOY campaign, you need to start with your CRM and break down your contacts into groups. Make a list of clients that you spoke with earlier in the year who said that you could contact them late in Q4. These clients may not have been ready to list their property before, but sending them an email today can give them the encouragement that they need.

• Post on social media.

 

Social media can help you build trust with clients and bond with past and potential clients. Yes, social media platforms like Instagram and Linkedin can get crowded, but brokers that post on a routine basis are more likely to gain higher engagement rates which can lead to a deal.

 

Here are some effective social media marketing strategies to follow:

 

• Pay attention to certain social networks. Linkedin, Twitter, and Instagram are the most effective platforms to connect with prospective clients.

 

• Regularly post market insights to show that you have expert CRE knowledge. Talk about current trends and share your predictions for the year ahead.

 

• Respond to all comments posted on your social channels. Increase engagement by asking people to share their opinions. 

 

• Show clients your personality. You want people to see that you are authentic, and if you are funny, don’t be afraid to show an appropriate sense of humor.

 

Are you determined to close a deal before the end of 2022? It may be challenging to meet your goals during the holiday season, but it is not impossible. With the commercial real estate marketing tips we discussed, you are more likely to finish the year strong.