Balancing the Numbers in Commercial Real Estate

Commercial Real Estate Success by the Numbers

If you are thinking about moving into commercial real estate, but don’t know how to start, the way to begin might just be as simple as 1-2-3. Okay, maybe not that simple, but it will relate to numbers. The difference between making it and breaking it in this game usually comes down to getting the numbers and knowing what to do with them. Commercial real estate professionals depend on numbers to meet client expectations and even to survive during the slow times.Commercial Real Estate Success by the Numbers

Unlike residential real estate where buyers often make decisions about a potential home by how they feel, investors stay pretty close to the book when it comes to making a purchase. If the numbers are right, they make the move. If the numbers are sketchy, they back away as fast as lightning.

ROI

If there is a holy grail in real estate, it is the ROI. The Return on Investment is an investor’s stock in trade. They often run tight margins, so accurate figures can help you build credibility. Make a mistake and you may find yourself without a client faster than you can say “stupid decimal point!”

Investors will have a target return in mind when they speak to you about a property. If you find yourself on an entirely different wave length, your credibility will suffer. Give them the right information and you may find yourself getting referrals from that client even if a particular property proves not to be a worthwhile investment.

Crunching the numbers requires you to know what numbers to look for and a way of checking your outcomes for accuracy. This is especially true for owners or sellers who count on your assessment to determine the asking price of a property. Go too high and you will sit on the property. Go too low and you will be friends for life with the buyer and the mortal enemy of the seller. Accurate numbers mean that you can likely maintain relationship with both!

Like all aspects of real estate, you need many tools in your tool box when it comes to arriving at accurate figures for a sale. If you are evaluating the value of an office building, you will need to assess a different set of values than a piece of raw land. A bit of research on your part will help you gain important credibility and help you build the confidence you need to seal the deal.

Need help analysing those critical numbers? Give me a call. That’s what I do!

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