As of right now, all I know how to do is go on Loopnet (or a similar site) and take the Cap Rate at face value and run numbers as if that's what I'm guaranteed to get out of the investment.
For those of you who have experience investing in commercial real estate... what do you look for in a deal?
Multifamily investor · Boston, MA · Member since 2017 · 281 posts · 521 votes
8y
I look at income and compare rents to comps. I also look at expenses and see if the property is mismanaged and I can operate it in a more efficient way (through a 3rd company) - you'll see it on the T12 and RR (rent roll). Another thing I'm looking at is vacancy, concessions, etc - and compare that to the competition.
Cap rate is only part of the picture; the potential is also important - I look at how much I can increase rents (with and without renovating the property) and additional income (valet trash, car ports, add washers/dryers in units, etc).
As of right now, all I know how to do is go on Loopnet (or a similar site) and take the Cap Rate at face value and run numbers as if that's what I'm guaranteed to get out of the investment.
For those of you who have experience investing in commercial real estate... what do you look for in a deal?
You should figure out what personal/life goals are important to you first. What is your investment horizon, effort expectations, level of risk, etc.
Once yuo know who you are as an investor, the rest comes naturally.