CoStar v. LoopNet

Miami, FL · Member since 2013 · 9 posts · 0 votes

Hello, I am a brand new real estate imvestor (haven't even purchased a property yet). My partner and I are looking in the Miami-Dade County area. While our focus is SFHs, we are also considering smaller commercial apartments (6-12 units). Among other sources for leads, we're considering using CoStar or LoopNet for commercial apartments. Has anyone had experience with these sites, to help us weigh the relative merits of each? Thank you very much.

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Joel OwensBusiness Member

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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes

13y

"how do you find a broker to give you the good deals before they show up on loopnet?"

FIRST define what you are looking for. THEN seek out brokers who have the experience and connections to the properties. For example a friend of mine does Industrial only and has deep connections to owners with properties not on the market.

My expertise is Apartment buildings and Triple Net leasing. I know Industrial a little but would be of little value to a buyer like that as it's not my focus.

6-12 units is very small for multifamily. You might find a few on LoopNet but many of the smaller properties might trade on your local MLS instead. I see a bunch of these types of little properties on the residential MLS. LoopNet is more for larger commercial properties and Costar mainly focuses on Office.

You can see about 10% of properties on Loopnet for free but to see all of them you need the premium membership.

If your focus is 6 to 12 units you would be wasting time talking with the brokers listing 50 or 100 unit plus apartment buildings. A 10 unit might be a 400k sale versus a sale in the millions and millions for a larger property. I have heard from some of my other broker friends that there is demand for these little buildings of 5 to 15 units because residential buyers are getting crowded out on houses and understand renters so naturally they have money to progress to the little multifamily units.

You might find it easier if you are going that small to just buy some quads instead if you want to hold because the long term loan at a low rate will be better. Commercial loans are typically 5,7,10 year terms. There is some longer money entering the market but basis points are about 75 to 100 points higher on average than market rates to compensate. The key to those loans is if they are assumable down the road and at what terms as that might be appealing to a buyer if they can assume an existing loan at lower rates than future market conditions.

Hope it helps

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Joshua D.Pro Member
BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
13y
CoStar owns Loopnet and pretty much every other commercial listing site. As for what you'll find on each, I'll allow others to chime in on their opinions.
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Joshua D.Pro Member
BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
13y
@Account Closed - Yep. They own LandandFarm, BizBuySell, and lots of other online properties as well. If you look at the footer of many of the big commercial sites, you'll find they are the owners. You can also look them up in more detail via their public records, as they are publicaly traded - CSGP
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James W.
Real Estate Investor · Member since 2008 · 56 posts · 0 votes
13y
Originally posted by Nick K.:
@Joshua D. I didn't know that! That's very interesting and thanks for sharing.

Most people I know use Loopnet for finding brokers not deals. Occasionally you will run across a listing that lists actual numbers. Most of the time when you analyze these deals they are terrible!

Usually by the time a listing hits loopnet, it has already been seen by a ton of experienced investors and there is usually a reason why they didn't want it.

how do you find a broker to give you the good deals before they show up on loopnet?
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Karen MargraveBusiness Member
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Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
13y
What type of leads are you looking for, buyers, sellers, or ?
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
"how do you find a broker to give you the good deals before they show up on loopnet?"

FIRST define what you are looking for. THEN seek out brokers who have the experience and connections to the properties. For example a friend of mine does Industrial only and has deep connections to owners with properties not on the market.

My expertise is Apartment buildings and Triple Net leasing. I know Industrial a little but would be of little value to a buyer like that as it's not my focus.

6-12 units is very small for multifamily. You might find a few on LoopNet but many of the smaller properties might trade on your local MLS instead. I see a bunch of these types of little properties on the residential MLS. LoopNet is more for larger commercial properties and Costar mainly focuses on Office.

You can see about 10% of properties on Loopnet for free but to see all of them you need the premium membership.

If your focus is 6 to 12 units you would be wasting time talking with the brokers listing 50 or 100 unit plus apartment buildings. A 10 unit might be a 400k sale versus a sale in the millions and millions for a larger property. I have heard from some of my other broker friends that there is demand for these little buildings of 5 to 15 units because residential buyers are getting crowded out on houses and understand renters so naturally they have money to progress to the little multifamily units.

You might find it easier if you are going that small to just buy some quads instead if you want to hold because the long term loan at a low rate will be better. Commercial loans are typically 5,7,10 year terms. There is some longer money entering the market but basis points are about 75 to 100 points higher on average than market rates to compensate. The key to those loans is if they are assumable down the road and at what terms as that might be appealing to a buyer if they can assume an existing loan at lower rates than future market conditions.

Hope it helps
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Micki M.
Flipper/Rehabber · York, UK · Member since 2013 · 895 posts · 453 votes
12y
Let me answer your original question.

Yes there are more listings on CoStar, and CoStar makes sure all listings from Loopnet are imported to CoStar and kept up-to-date. This is helpful since a lot of smaller brokerages can't/won't pay for CoStar access.

CoStar has much more in-depth info and search tools.

CoStar is a much better product, but can be cost prohibitive. If you are listing, Loopnet will suffice since the info will end up in both places. If you are shopping, CoStar is the way to go, but finding a good broker who can get the deals before they go online is even better.
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Ellis San Jose
Specialist · Westlake Village, CA · Member since 2010 · 1k+ posts · 781 votes
12y
CoStar is preferred from a brokers perspective .

It costs more but it has more comprehensive information.
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