Commercial Real Estate Michigan

Senin, 19 November 2012

Commercial real estate listings in Michigan area are available for your review and purchase. You can purchase a commercial site that is already established, or you can purchase a commercial lot that is just waiting for you to build, develop and bring in the people to make the sales. The average family income in Michigan during the year 1999 was about $42,000. For the business, this means there is money available in the family units to support various types of industry, such as pools, spas, camping, and many other types of hobbies and sports as well.

Commercial real estate listings are those that will include retail centers, doctor's offices, business settings and similar retail situations. Commercial listings are wide ranging, from the small lots, to the huge office buildings where hundreds of employees could be located. Commercial real estate in Michigan is one that you should consider if you are thinking about relocating your business, or if you are contemplating starting a new business venture. Mortgage rates are always changing, and for the prime locations in Michigan you will find your real estate investment is well worth the mortgage you will be paying. If you have completed a business plan, detailing your business ideas, your business traffic needs, and the demographics of who your customer base will be, you can find a real estate investment in Michigan that will fit this requirement. Many commercial real estate settings in Michigan will service many functions in promoting your industry.

When you are looking for commercial real estate listings in Michigan, there are many different ways to go about it. You may have a pacific idea to where you are looking for the commercial property. If you know where you want to have your company that is a big advantage because you will be able to narrow down your search a little because of where you are looking. Some of the listing areas are the Lakefront Real Estate Michigan or Waterfront Real estate but there are many more areas that you may be looking at for the commercial real estate that you whish to have your company at for business, some are considered prime locations, while others are commercial settings thatdo not have the heavy traffic. One thing that you are going to want to do is check out what area in Michigan would be the best for your companies business and for the consumers as well. If you need heavy traffic to get the high numbers of customers, you should seek out some of the prime locations, which can be a bit higher in cost, but well worth the investment.

Once you have done some of the work on checking out of the different locations, you will notice that there are areas of the state that is going to be a great location for your business of operation. Many companies may choose to have their business location near the lakes so that they have some easy access for shipment and deliveries in many different ways beside vehicle. If you are checking out the lakefront real estate in Michigan, you may notice that you are going to need to be ready to pay a little more for the property because of its location but it could be a big benefit in the long run when you think about the different ways that you are going to be able to ship and receive deliveries and even the possibility of how many consumers that would be available if you are in the business of sales because of the visitors that could come to your shop some supplies or needs for their vacation. That right there would be a great advantage to acquiring some Michigan waterfront real estate when you are going to start up a business of sales that would be a benefit for the vacationers. If you have, a product or service that would benefit the many who love to vacation you should search commercial real estate in the Waterfront Real Estate Michigan listings.

Michigan waterfront real estate is a prime location for many types of business, not only because of the high number of tourist that come to this area, but also because of the high number of traffic daily that will see your business in this area. Grand Blanc Michigan Real Estate is also a prime location for commercial real estate, as this is an area that is growing yearly, with new residential areas expanding around the commercial area. About seventy percent of the homes in Michigan are two and three bedroom homes, housing families that are available to support the commercial sales needs.

How to Do a Sales Pitch in Commercial Real Estate

In commercial real estate, you will undertake a variety of presentations, in a variety of circumstances. Most of them are business-like in nature, focusing on the needs of the tenant, the property buyer, or the property seller.

Get to the core issues

Each of these groups has unique property requirements and points of focus. It is their needs which must be identified and clearly addressed in the sales pitch or presentation. Many successful commercial real estate agents will have a preliminary meeting with the client or customer so that they can identify key issues and concerns. This allows the commercial agent to return to the client or customer in a few days with a well structured proposal that addresses the needs of the customer or client.

It's all about THEM, not YOU!

When you design an investment or commercial property proposal for presentation, the document should be 90% regards the property and the client. Frequently you see this rule disregarded or broken with the proposal document being largely regards the agency and the personnel.

Rarely is the property transaction a simple matter of the property rental, the property price, or the physical elements of the property. In most situations, it is the combination of these things which must satisfy a fundamental equation of need that the customer or client has. In getting them to this fundamental need, you will identify an element of pain that the customer or client is experiencing. This is what you focus on.

They are Experienced

It is interesting to note that many clients and customers in commercial real estate are reasonably comfortable in circumstances of business negotiation. This means they may not tell you the total big picture or all the elements of a transaction until they are ready. Conversation and connection in the presentation process should be biased towards the client or customer using well selected questions which allow the agent to interpret the body language coming from the client's response.

When you believe you have identified the element of clients pain related to the property transaction, you start to magnify the problem in terms of today's market, then offering stable and logical solutions that your real estate agency business can provide to the client or customer. Invariably, the commercial real estate transaction in today's market centres on financial matters such as:

  • High vacancy factors
  • Other property choices and chances are available
  • Underperforming leases
  • Unstable cash flow
  • Unstable tenancy mix
  • Tenanted conflict
  • Escalating building operating costs
  • A shift in demographics which exposes the property to a unstable future
  • Mortgage payment pressures
  • Age of the asset
  • Needs for refurbishment or extension
  • Competition properties attracting tenants away from the subject property

This type of information and interpretation requires your intimate knowledge of the local region. This is by both property type and by location. This is the higher value that you bring to the customer or client. Being able to distinctly define local market awareness is a major advantage in any commercial real estate presentation or sales pitch. You must be seen as the best knowledgeable solution to the problem.

From Experience

After many years working exclusively in the commercial real estate industry, I found that my unique skill was in market knowledge and the display of that in any formal presentation to the client. Being able to talk about market trends and financial performance in a solid and sound way will help the client understand that they need your services. Coupling that with your extensive and relevant database of enquiry clearly shows the client that they need you.

A fantastic commercial real estate presentation is a function and balance of lots of things. Things like:

  1. A well established pre-planning process is a strategic advantage for every commercial real estate presentation. Strategy is everything in commercial real estate. Every property presentation requires planning.
  2. Making sure you are asking the right questions of the client or prospect. Plan your questions relative to the subject property so that you help the client think about opportunity and changes that are possible.
  3. Using your market knowledge and giving good answers. Have a variety of market facts and trends available to call on. Feed them into your presentation; facts are always useful. They can also be used as a channel to direct the discussion when the client is forcing you to justify your approach or your experience. Confidence and control must be the basic rule of your property presentation. When the client takes control of the presentation you have lost.
  4. Using your experience in the marketplace so that you are telling relevant stories of success in similar properties. Stories of other properties will always interest of the client.
  5. Making sure your personal presentation is optimised for the connection in the presentation. It can be that you are using a combination of the proposal document, the marketing document, and computer slide presentation, samples of your database, photographs of the subject property projected on to slides, and photographs of comparable properties projected on to slides.
  6. Choosing the placement of people at the table or strategically positioning them in the room is always important. Much has been written about where you should sit relative to the client. The basic rule is adjacent to the client rather than across an area of barrier such as a table. Being within arm's reach allows you to pass documentation to the client at the appropriate time. Documentation should not be provided to the client until you are ready for them to review it; otherwise it is a distraction of their attention.
  7. Make sure that your proposal is simple and yet well directed with a clearly defined outcomes of sale or lease. Many proposal documents in commercial real estate are much too wordy so the main messages are lost and not clearly defined. The best proposals are less wordy and more illustrative. The best balance of a commercial real estate proposal is a mixture of 25% words, 25% pictures, 25% graphs, and 25% white space. This becomes a document which is clearly read and understood.
  8. Combine good illustrations and photographs of the subject property into the proposal or presentation so that any lengthy descriptions or paragraphs are broken up. This will keep interest of the client in your documentation.
  9. Make sure that your marketing package is value for money, and yet reaching the target market that the property serves or needs to attract. All too often, we see examples of generic marketing by the commercial real estate agent to the broader and less specific marketplace. Showing the client that you clearly know and will attract best the target market will always help your conversion to a potential listing. Be very specific about the target market and how you will reach it.
  10. Ensure that your commission costs are fair and reasonable for the location. In most circumstances, discounting your commission should not be an option as it will make you poor and remove or detract from your enthusiasm for the sale or lease. 'Cheap' means 'cheap and without focus' and the client needs to know this. The property deserves better. You are not cheap because you are the best and you do a great job. A fair commission is always paid for a positive property outcome.
  11. Always provide testimonials that are relevant to the property transaction. When you combine relevant history and details of happy customers into your presentation you will make the client feel more comfortable.
  12. Always display clear and sound market knowledge that impresses the client relative to their property. This will include extensive awareness of comparable properties that compete with the subject property. You should be able to talk solidly about property prices, comparable rents, rental growth, returns on investment, changes to the future demographics of the area, and properties in the immediate precinct of relevance. In many cases, it pays to walk around the local area just prior to any property presentation so that you bring immediate and clear pictures of the precinct to the discussion. Many times this has been of significant advantage in my presentation processes. Talking about neighbouring properties localises the client and their thought processes.
  13. Come up with a variety of ways to serve the client. Innovation and relevance will always impress. In today's market, this is relatively easy considering the marketing opportunities and tools provided by the internet & technology. Be proactive in your property promotion processes so that the listing for sale or lease stands uniquely different in its marketing campaign from the others in the area. This does not have to be expensive to the client or to your office, given that the internet and electronic technology is historically cost effective. In today's market, the traditional methods of publicising the property in the property pages of the local paper, is becoming much less important in the marketing campaign. Most commercial property buyers and tenants research the market from the Internet first and foremost.
  14. Almost every property agency will say that they have excellent communication and connection skills to support the property promotion process. From experience, this is largely incorrect and typically the average commercial salesperson or leasing person will exercise ordinary communication channels with the client. Put yourself in the shoes of the client. They expect and deserve frequent updates on the promotion of the property even when nothing is happening or when the adverts are producing little response. When a property campaign is not producing the results, it is important that you act or adjust with alternative recommendations and strategic changes to the promotional campaign for the client to consider. Rarely would you get to the property campaign correct in the first week. It is in this time that you must consider fine tuning the promotion process so that the target market is being reached in a timely and effective way. This means that every property enquiry generated from your promotions must be tabulated so that you understand what channels of marketing work most effectively with the property in question.
  15. When addressing the client or the client group in a formal property presentation, the answers and information you give must be delivered well and provide relevant solid property knowledge, in a practiced and professional delivery. Any sales or presentation tools relative to the property must be relevant and you should know how to use them with exceptional skill. Fumbling and faking information is not tolerated by the client.

So there you have it. These are some of the key skills to use in a commercial real estate presentation. Whilst many real estate agents think that they are the best alternative in the market to promote sell and rent commercial property, the reality is they do not get the message across when it matters most in front of the client.

To be the best commercial real estate agent in your area, you must show that you are just so, and you do this in the first 10 minutes of the time that your presentation takes. The client will have formed an opinion by then.

Be prepared to walk away from any demands for discounting that the client or customer demands. In this market they need a great commercial real estate agent providing a great job; discounting is not an option. Show pride in your services and walk away when the client demands discount in marketing or lower commissions.

The Money Making Advantages of Commercial Real Estate Or Multi-Unit Real Estate Investments

Investing in commercial or multi-unit properties is the secret that wealthy real estate investors have found to accomplishing all these important real estate investing goals.

What are the types of commercial or multi-unit properties available to real estate investors, even new investors? What are the specific advantages of investing in and owning commercial or multi-unit real estate?

Multi-unit properties include a wide range of investment options:

Office Buildings (small two unit office to a high rise building),

Retail Stores (small retail stores to a giant shopping center),

Industrial buildings (small shops to a huge industrial park) or

Self Storage or Private Record Storage (from small to large self storage complexes).

Key Advantages of Investing in or Commercial Properties

The ten key advantages of investing in Commercial or Multi-Unit properties are:

1. Higher Income Potential,

2. Lower Risk on Vacancies,

3. Less Competition from other Real Estate Buyers,

4. More Flexible Sellers,

5. Depreciation Tax Shelter,

6. "Triple Net Leases" and Tenants paying expenses,

7. Equity Build-Up,

8. Solid Economic Value,

9. Massive Leverage (seller financing or partial seller finance),

10. Long term Capital Appreciation.

Multi-Unit/Commercial real estate has a higher income per square foot than residential single family investements, or even apartments, and therefore a Higher Income Potential for the investor.

Multi-unit real estate by its very nature has the advantage of lower vacancy risk, because it always involves two or more units. The vacancy risk with commercial or multi-unit properties is much smaller than single tenant investments such as a single family home, because the vacancy risk is spread over several units.

For example: One office being vacant out of 20 offices is only a 5% vacancy. For the multi-unit investor, this 5% vacancy is significantly less financially traumatic, than a single family house being vacant, and the real estate investor experiencing a very painful and costly 100% vacancy.

Another point in favor of investing in commercial or multi-unit properties is there is less competition from other investors. This is because some investors are not comfortable in larger investments such as an apartment, mobile home park, office building, retail strip center, or industrial complex. These types of larger real estate investments are out of many peoples' comfort zone.

Paradoxically the owners of commercial or multi-unit real estate are usually more flexible sellers. Multi-unit property sellers are not as emotional when selling their property. The sale of most multi-unit Properties such as an office building, retail strip center, or industrial complex, is simply a business decision.

Commercial or Multi-unit property sellers are in a business frame of mind. Multi-unit real estate sellers are more likely to understand and agree to the request from the Buyer for either 100% Seller financing, or Secondary Partial Seller Financing. These sellers are likely to agree to a partial Seller carry back financing, such as a second mortgage, or second trust deed behind an institutional lender first lien. [In Canada, this is commonly referred to as "Vendor Take-Back Financing."]

Investing in and holding onto multi-unit or commercial real estate provides significant Tax Shelter to the multi-unit investor through Depreciation of the building and improvements. The depreciation write off allowed by the IRS, and most States, then shelters the massive passive income from the commercial real estate or multi-unit properties, such as an office building, a retail strip center, or an industrial complex.

Another advantage to the investor is that in many commercial or multi-unit properties the tenants pay all the building's operating expenses. This is especially true in "triple net Leases," which are commonly found in office building leases, retail leases, and industrial leases. In these "NNN Leases," the lessee in addition to paying the base monthly lease payment, the lessee also pays for their "pro-rata" portion of the entire property's expenses. The lessee with NNN lease also specifically pays for their portion of the real estate taxes, property insurance, and maintenance.

The tenants' lease payment provides the commercial or multi-unit owner with the cash to make the mortgage payments, which results in the owner having a nice equity build-up over time.

Investing in commercial or multi-unit properties has the advantage of providing solid economic value. This is because most existing office buildings, retail strip centers, or industrial complexes can be purchased for less than replacement cost, or in other words, the cost to build one new.

Commercial or investment real estate such as office buildings, retail strip centers, or industrial complexes, enjoy the advantage of financial leverage with long term fixed rate institutional debt. Another option is for the possibility of 100% Seller financing, or a combination of institutional financing combined with partial Seller financing.

Holding on to multi-unit or commercial properties over the long term will provide the investor with possible Capital Appreciation and increased cash flow through higher rents over time. The increased cash flow can lead to long term massive passive income, with appreciation as the frosting on the cake.

Due Diligence is Essential for Commercial Investments

The due diligence process in multi-unit real estate begins in the initial interaction with the seller, or the Seller's Commercial Real Estate Agent or Broker. The due diligence process in multi-unit real estate is well underway in the contract negotiation phase.

A multi-unit real estate investor needs to clearly identify to the Seller exactly what will be needed to intelligently analyze the potential multi-unit investment. The investor should frame the request for documentation with phrases such as, "in order for me to make an informed intelligent business decision I will need the following documents..."

Generally multi-unit property owners are more knowledgeable and sophisticated. Start out with a simple request for basic information, such as a current rent/lease roll, copies of all the current leases, and the income and expenses for the multi-unit property for the last two or three years. The more sophisticated the Seller, the less they are surprised or upset by a detailed comprehensive list of items needed for the complete due diligence on the property.

Most Sellers', or their agent's, will give what an investor asks for in a timely manner. Only Seller's who may be hiding something will refuse the buyers reasonable request for information. If the Seller or their agent refuses to provide the information requested, then the potential Buyer should be prepared to just walk away from the deal.