The Pros of Wholesaling Commercial Real Estate in 2013
Should more real estate investors be looking into the advantages of wholesaling commercial real estate in 2013?
There are at least 6 good reasons for real estate investors to pay more attention to commercial property opportunities…
1. Many Neglected Opportunities
Commercial real estate in the U.S. has taken an equally hard hit as the residential side in the last few years. In fact, the dollar volume of distressed commercial property and loans have far outweighed that of single family homes.
Still, the bulk of investors continue to focus on housing, neglecting many great opportunities among office and retail properties. This means great discounts and attractive terms to be had for those who know where to look.
2. Commercial Mortgages
Financing has always been one of an investor’s biggest challenges, but savvy investors know that commercial mortgages can actually be a lot easier to secure, especially in the current market.
Commercial lenders are getting more aggressive about loaning money and they are far more open to creative financing and are more flexible when it comes to structuring deals. This can make wholesaling commercial real estate a lot easier on both sides of the transaction.
3. Huge Growth Potential
Just as the residential real estate market has been blossoming again there is a lot of room for commercial properties to grow. As the economy improves this will continue and vacancies will continue to drop. Plus, due to the way commercial property is evaluated there are always opportunities for adding value in any market cycle.
More and more investors will continue to pile into the U.S. housing market over the next few years until we again return to the days where virtually everyone is an amateur real estate investor.
While there is no shortage of deals, wholesaling commercial real estate can provide diversity to keep up deal flow and incomes as well as act as a hedge against future fluctuations and changing trends.
5. Increasing Demand
While U.S. property may be entering a boom cycle again, many other countries are now facing having their bubbles burst. Watch for places like Hong Kong and Canada to go pop. This means increasing interest and demand for property here with masses of capital chasing income opportunities. Some may go to residential REITs and private equity funds but many more sophisticated investors are not fans of the hassles of single family homes.
This means lots of opportunity for those wholesaling commercial real estate to carve out a new, highly profitable niche for themselves.
6. Bigger Paydays
While most would consider any wholesaling a great and easy payday, and luxury homes can offer significant profits, there can be much larger paydays for those wholesaling commercial real estate. There may not be a plethora of $10 million plus homes in your market but $10 or $20 million is nothing when it comes to offices and malls.
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