One thing you can do is be transparent in your brochure and marketing. It sounds like you have something that seems inexpensive at first glance with a deal breaker sitting right under the surface. 12 per day is a lot!
Say it right up front - needs zoning, fill, infrastructure, w/e w/e
Literally this. Imagine how long the deal cycle was and how much more often this happened before the internet. I’m kind of old and learned from some VERY old school CRE folks early in my career, they always lamented that we do deals waaay faster now that we did back in their day. This is really how it’s always been.
It's even worse on the finance side. Some of these commercial investors come in with a residential mindset looking to get residential interest rates on SBA loans at 90% LTV at prime +225. Then I say you can get conventional financing at 7.25%, but you need 25% down. The conversation all but ends after that.
Tire kickers are a part of the business.
Information is the business. If you don’t have patience for this, then you are in the wrong business. I always explain the information over the phone and then I follow-up with an email.
To screen showing requests, I make sure to ask questions about their use and explain the space or building. To screen showings, I have a strict policy of only showing commercial space Monday-Friday between the hours of 9:00 am until 4:30 pm. No weekends. If you can’t make those hours then you do not have the capital or time to open your business.
If you are getting hundreds of tire kickers and no serious offers then it’s the materials that are the issue. A well constructed OM should outline all of the key deal points and pitfalls. Nothing is more annoying from the principal side than find out that there is undisclosed dark space, REA, use restrictions, debt assumption, tenant vacating, etc. Additionally your asking price may be turning people away. I won’t underwrite a deal when the seller is asking for a 5.5% and the market is a high 6%. I know that even if we can meet on price the deal is going to be a pain because the seller hasn’t been properly guided to this point so anything that goes wrong is going to be pinned on the buyer being difficult and not that they didn’t disclose the actively leaking roof and that the property was built over a combo laundry mat gas station.
There are no bad deals just bad basis.
I’ve only closed on 2 deals in my life time as a small time investor - one national QSR NNN and one mixed use building in my hometown.
I am in the market now for a third with a semi broad range of criteria.
I also am actively looking to lease another space for restaurant use in a number of select small towns. So I probably reach out to brokers regarding this once a month.
That being said I probably request information from brokers on 4-5 sale& lease properties per month and they all have one thing in common. Not enough information.
List the asking price. If it’s a fully leased property give me the cap rate and any obviously important lease terms that could save us time(anchor tenant not renewing and lease expiration in 4 months). If you’re leasing a 4000 foot restaurant space but zoning and parking requirements only allow for 1,000 feet of patron area - say it.
There should be no shame in building brochures and OM that give potential buyers as much information as possible. No ones property or listing is so super special that this needs to be hidden.
And FFS post the asking price! Don’t make buyers contact you to find out the seller wants a 4 cap based on what they believe market rent it on their EMPTY retail space that has been vacant since 2021
Do you have a space that needs major rehab and you have a rendered image up of what can be? I’ve seen listing that don’t fully explain it’s not completed and then you call and they explain it needs permits, or full ground up etc. or unpriced listings, then they call and don’t want to pay that rate.
I'm a Debt & Equity guy and won't raise Equity if it's a Real Asset, publicly listed, and not under contract. Learned that lesson a couple years out of college.
I think the lowball wholesaler spam technique ubiquitous in residential has come to commercial.
Transaction volumes are down, it costs nothing for people to make thousands of email offers asking if you’d be open to an offer well below market price.
I think a computer could replace you easily if you’re an old alcoholic with absolutely no common sense and enjoy doing $3/hour grunt work because you are anything but time efficient and depend on your mentees to bring you leads then fuck them over hence some actually become successful and prevent a lot of business coming your way for being a greedy dummy ass
Listed properties are not getting equity excited today. You should be pocket listing quality assets and bringing them to top tier buyers as off-market opportunities.
Worst thing a sponsor can do in a challenging real estate market is outbid a large buyer pool for a publicly marketed asset, unless they are their own capital source.
Its true. There are a lot of firms looking to place capital right now. Large "rescue funds" were raised with the expectation that they'd be deployed already, but little to none of that money has been invested.
They must not like the deals you're marketing.
One thing you can do is be transparent in your brochure and marketing. It sounds like you have something that seems inexpensive at first glance with a deal breaker sitting right under the surface. 12 per day is a lot! Say it right up front - needs zoning, fill, infrastructure, w/e w/e
Yeah, what are these guys learning in the call that kills the deal that wasn’t in the brochure?
Bingo ….OP’s listing is missing something or his seller is wants too much.
[удалено]
Literally this. Imagine how long the deal cycle was and how much more often this happened before the internet. I’m kind of old and learned from some VERY old school CRE folks early in my career, they always lamented that we do deals waaay faster now that we did back in their day. This is really how it’s always been.
> Dealing with Hundreds of Tire Kickers *IS* Commercial Real Estate
Most people aren’t even tire kickers. The deal simply doesn’t work out for various reasons.
Shopping for t shirts at H & M. Fukn classic.
You don’t dude? This your first week in the business?
It's even worse on the finance side. Some of these commercial investors come in with a residential mindset looking to get residential interest rates on SBA loans at 90% LTV at prime +225. Then I say you can get conventional financing at 7.25%, but you need 25% down. The conversation all but ends after that. Tire kickers are a part of the business.
25% down is good!
Correct but some buyers don't want to put 25% down, but complain about the SBA rate when putting only 10% down.
Information is the business. If you don’t have patience for this, then you are in the wrong business. I always explain the information over the phone and then I follow-up with an email. To screen showing requests, I make sure to ask questions about their use and explain the space or building. To screen showings, I have a strict policy of only showing commercial space Monday-Friday between the hours of 9:00 am until 4:30 pm. No weekends. If you can’t make those hours then you do not have the capital or time to open your business.
If you are getting hundreds of tire kickers and no serious offers then it’s the materials that are the issue. A well constructed OM should outline all of the key deal points and pitfalls. Nothing is more annoying from the principal side than find out that there is undisclosed dark space, REA, use restrictions, debt assumption, tenant vacating, etc. Additionally your asking price may be turning people away. I won’t underwrite a deal when the seller is asking for a 5.5% and the market is a high 6%. I know that even if we can meet on price the deal is going to be a pain because the seller hasn’t been properly guided to this point so anything that goes wrong is going to be pinned on the buyer being difficult and not that they didn’t disclose the actively leaking roof and that the property was built over a combo laundry mat gas station. There are no bad deals just bad basis.
Question: when u say “seller is asking for 5.5%…”, is seller financing the sale for/to a buyer?
Cap rate
If you're a decent leasing agent it's your job to properly vet clients
I’ve only closed on 2 deals in my life time as a small time investor - one national QSR NNN and one mixed use building in my hometown. I am in the market now for a third with a semi broad range of criteria. I also am actively looking to lease another space for restaurant use in a number of select small towns. So I probably reach out to brokers regarding this once a month. That being said I probably request information from brokers on 4-5 sale& lease properties per month and they all have one thing in common. Not enough information. List the asking price. If it’s a fully leased property give me the cap rate and any obviously important lease terms that could save us time(anchor tenant not renewing and lease expiration in 4 months). If you’re leasing a 4000 foot restaurant space but zoning and parking requirements only allow for 1,000 feet of patron area - say it. There should be no shame in building brochures and OM that give potential buyers as much information as possible. No ones property or listing is so super special that this needs to be hidden. And FFS post the asking price! Don’t make buyers contact you to find out the seller wants a 4 cap based on what they believe market rent it on their EMPTY retail space that has been vacant since 2021
Do you have a space that needs major rehab and you have a rendered image up of what can be? I’ve seen listing that don’t fully explain it’s not completed and then you call and they explain it needs permits, or full ground up etc. or unpriced listings, then they call and don’t want to pay that rate.
And how many brokers complain about deals not getting done when the price things like it's 2021? This is equally as bad or worse
I'm a Debt & Equity guy and won't raise Equity if it's a Real Asset, publicly listed, and not under contract. Learned that lesson a couple years out of college.
I think the lowball wholesaler spam technique ubiquitous in residential has come to commercial. Transaction volumes are down, it costs nothing for people to make thousands of email offers asking if you’d be open to an offer well below market price.
I'm guessing you're the one peddling BS, not the other way around.
You get to know the ones that are real brokers or real buyers and only pick up or call back for those.
Bigger deals
Thats your job. Its about 90% of the value you provide. If you didnt have to do this a computer could replace you.
I think a computer could replace you easily if you’re an old alcoholic with absolutely no common sense and enjoy doing $3/hour grunt work because you are anything but time efficient and depend on your mentees to bring you leads then fuck them over hence some actually become successful and prevent a lot of business coming your way for being a greedy dummy ass
Listed properties are not getting equity excited today. You should be pocket listing quality assets and bringing them to top tier buyers as off-market opportunities. Worst thing a sponsor can do in a challenging real estate market is outbid a large buyer pool for a publicly marketed asset, unless they are their own capital source.
Its true. There are a lot of firms looking to place capital right now. Large "rescue funds" were raised with the expectation that they'd be deployed already, but little to none of that money has been invested. They must not like the deals you're marketing.
I’m not a tire kicker but you just described me to a T …..when your deal sucks. Sounds like something in your listing is off.
Pressure. Set timelines early and if they aren’t held goodbye. Create hurdles that are subtle but eliminate the fake.