Can't make numbers work for my first deal

30 Replies

If someone is new to the commercial market, suggest finding an experienced commercial broker to help. Commercial is not like residential...  its not going to be easy to do it by yourself, you need an agent as they have the deal flow. 

Also, while i agree you dont want to overspend, waiting for some deal with numbers from say even 3 years ago wont get you in the game. To win you must be in the game. I buy expensive new assets, and even I have tripled my money in 7 years. (Started out with 1.3M in 2013, buying 6.8M now at 60% LTV) ... the way to win is to buy right, hold the asset long enough to get the NOI up so the price increases, then sell and do a 1031 into a bigger property...



I presume you already own your primary residence based on what you are requiring of a deal...

If not, throw those numbers out the window if you're still renting (with it's inherent 0% return on EVERYTHING)

But the only advice I can give as someone fairly new at this is the response to this question...

"The price that comes out of my math is just to low that I don't know if I should even try to make an offer."

I'd just say MAKE THE OFFER. You have your established standards of exactly what you're looking for...

That is phenomenal, the numbers are surgical... Make the offer based solely on those numbers, ON EVERYTHING!

How else will you know where the sellers line is until you cross it!?

The worst they can do is give you a Know with their No...

You may just stumble into a deal, by the sheer numbers game, with a more motivated seller then originally anticipated that was overlooked by window shoppers...

@Erik W. , agreed. Learn about marketing for off market deals or develop relationships with local wholesalers, property managers, closing attorneys and brokers. Let them know you want to look at the deals that haven’t hit, or can’t hit, the retail market.

@Taylor L. Agreed, but I’d also add that if you don’t offer low, it’s harder to identify a truly motivated seller. I’m a wholesaler, so I’ve started adding value to my agent in other ways, such as presenting their listing offers alongside my cash offers and cold calling their lists of leads (and we split the leads depending on what solution the seller prefers).

If my broker didn’t send in my lower offers, I’d honestly find another broker. As long as they know WHY you’re doing something they should be able to help you.

Originally posted by @Scott Johnson :

@Taylor L. Agreed, but I’d also add that if you don’t offer low, it’s harder to identify a truly motivated seller. I’m a wholesaler, so I’ve started adding value to my agent in other ways, such as presenting their listing offers alongside my cash offers and cold calling their lists of leads (and we split the leads depending on what solution the seller prefers).

If my broker didn’t send in my lower offers, I’d honestly find another broker. As long as they know WHY you’re doing something they should be able to help you.

I think the important difference is commercial v residential. Motivated sellers that are working with commercial brokers don't need Loopnet to sell their deals. If they're actually motivated they'll get many satisfactory offers through the broker's investor network. Commercial deals generally only get to Loopnet after they've been picked over by the broker's entire contact list and the contact lists of their entire office.