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The basics of commercial foreclosure investing

Success in commercial foreclosure investing is measured by the number of deals you are able to successfully negotiate, not the amount of money made off one deal.

1 April 2023

The basics of commercial foreclosure investing

In real estate investing, this success begins with knowledge. There are basic principles that every commercial foreclosure investor should know, and these principles must be mastered in order to reach your investment dreams and goals.

Learn from others

As an investor, you’re not expected to know how to do everything and in fact, if you’re a serious investor in commercial properties, you should utilize the experience of a team of experts who can help navigate you through a deal. There are also training tools and mentors available who can provide real-life support when obstacles arise.

Have a consistent effort

Finding a deal takes work, but consistency and persistence pay off big in this business. Investors must understand the value of submitting quality offers continuously. Real estate is a numbers game. The more offers you have on the table, the more likely you will be to have an offer accepted.

Learn how to analyze properly

In commercial property analysis, there are many things that can be overlooked. As an investor, you must learn and develop your system for analyzing properly accurately so that you can present a valid offer to the lender. You must also learn how to ascertain a property’s true value.

Fund your deal

One thing that will stop an investor dead in his tracks is the inability to fund his deal. Know which banks will be willing to work with you. Find angel investors who are willing to support your deal. Take care of your income and your credit history because it opens other avenues of funding that aren’t available to people who have a poor credit history.

Rehab your property

Commercial foreclosure investors should be able to assess which repairs are necessary and then obtain cost estimates. There should also be a team of people who are able to do minor cosmetic repairs like painting and changing fixtures. You should know who to contact if major cleaning and landscaping was necessary for your commercial property.

Market effectively

Investors should also be aware of how to market their property effectively. If necessary, consult a professional who will be able to make recommendations to help get your property sold.

Find a property manager

Even if you were to do the property management yourself (which is not really recommended for a large commercial property), you should be aware of what your property needs in order to keep it maintained and attractive to current and future tenants.

Prepare deals that will be accepted

There is a misconception among many “would-be” investors that you can offer the lender or property owner whatever you want. That couldn’t be further from the truth. In reality, you must structure your commercial foreclosure deal so that it has the highest possible chance of being accepted.

Have a passion for what you do

Real estate investing success doesn’t come without its challenges. As a commercial foreclosure investor, you must have a deep passion for what you do. You must know your investment goals and go after deals as if they were your lifeline. You’ll be sifting through lots of properties. Furthermore, you’ll spend countless hours reviewing numbers, but in the end, one property is all it takes to get you started as an investor.

The basics of commercial foreclosure investing are simple – be willing to learn, willing to analyze, willing to rely on a team, and willing to go after your goals with passion. Keep working on refining your analytical process and people skills. Anyone willing to go and do this will ultimately achieve success.

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