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Focus Or Fail In Commercial Property

Mar 7, 2008
In commercial real estate you must have a Tight Niche Focus in order to be a successful investor.

You absolutely need to know what type of property of what size, age and condition you are looking for and what you intend to do to add value once you buy it.

It is basically a case of Focus or Fail.

If you look at every property on the market - cruising LoopNet for hours looking for a "good deal" - you are totally wasting your time.

This flies in the face of what many Residential Real Estate Investors were taught when they were buying single family houses.

Many single family houses buyers look for the "motivated seller".
They'll look at any property they can purchase at a wholesale price, no matter where it is, what size it is or how much it costs.

If you take this "I'll look at anything with meat on the bones" mentality to the Commercial Real Estate side, you will fail ... case closed.

Commercial Real Estate has so much more to offer.
There are so many different Property "Flavors". Commercial is like an all-you-can-eat buffet compared to the hot dog stand of Residential Property.

Different Asset Types, business plans, neighborhoods, market forces... if you don't have a Tight Niche Focus you will be like a kid in a candy shop. You will literally waste thousands of hours of your time and never become an expert ... never build that profitable portfolio.

Here's an Example of a Tight Niche Focus...

- MultiFamily
- 75 to 150 units
- Built in 1970's and 1980's - Class "B" - "C"
- Vacancy rate of over 15%, only minor rehab needed, economic loss 25% or more
- Business plan is economic reposition by raising rents and occupancy to the market rates, cosmetic rehab, hold for three to five years and sell on the improved Net Operating Income

With this level of Focus, you can clearly see when a property is in your Sweet Spot and when you can say "Pass".

The Four Benefits of Tight Niche Focus.

When you are focused on a specific property and a specific business plan four things will happen very quickly.

1. Find the Right Market(s)Quickly

With your tight focus you can quickly find the best Markets and best neighborhoods in those Markets for your chosen Niche.

2. You will be much more effective at screening opportunities.

The tight niche focus will allow you to quickly identify the properties that are in your Niche and say "yes" or "no" to further research instantly. You will toss any deal that is not a fit and be focused immediately on the lucrative deals that DO meet your niche criteria.

3. You will become an Expert in your Niche, very quickly.

The tighter your focus the more quickly you can wrap your brain around all the variables in that Asset Type, Asset Class and Business Plan. You will quickly learn the success factors and things to avoid in your specific properties. Only a tight focus will allow this rapid accumulation of expertise.

4. You will be able to build a Niche Focused Team.

When you can tell your team of Brokers, Mortgage Brokers, Property Managers and Field Partners EXACTLY what you are looking for they'll be able to bring you quality leads very very quickly.

Three Steps to Pick Your Niche

1. Choose an Asset Type

Retail, Office, Multi-Family, Industrial, Hospitality, Development

2. Choose an Asset Class

Do you want a brand new, fully rented up, modern, Class "A" building to buy and hold for a steady return?
Or or something that's a little older ... maybe Class "C" with some problems you can fix to force additional appreciation?

3. Choose a Business Plan

Is this a Buy And Hold
Are you going to do an Economic Reposition
A Rehab Project
A Re-purposing - warehouse to residential condos?, what is your business plan?

Now it's Your Turn...

Focus or Fail

Go through the exercise of picking your Asset Class, Asset Type and Business Plan. This Tight Niche Focus will dramatically accelerate your ability to find quality properties and grow your portfolio.
About the Author
Learn the Insider Secrets of Commercial Property Investment from Monte Lee-Wen who has personally purchased over $150M in Commercial Real Estate. CLICK THIS LINK NOW to start your Commercial Real Estate Investing Education with his 14 page FREE Report "35 Reasons You Should Invest in Commercial Real Estate".
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