|
by: Tony Seruga, Yolanda Seruga and
Yolanda Bishop
When
investing in real estate an important decision to make will be
whether or not you want to have a broker help make your real estate
deals. Often, the answer to that question will have to do with where
you are in your investing career. For those that are just beginning
a broker can be a very useful tool in finding opportunities, what an
investor should look for and what they don’t want to see in a
property, and negotiating a deal that will make everyone happy.
Those that are a bit seasoned in this area may not need so much
help, but still can benefit in one way or another.
When preparing to purchase a commercial property for investment you
may want the assistance of a broker. Having as much experience as
they do in this field, a broker will be able to give good, solid
reasons why a property may or may not be a good investment. If an
investor is considering purchasing a building in order to section it
off and lease out “stores” to those in retail, a broker may be able
to let them know that this is not a good idea because there will
shortly be a large shopping center being developed within a mile of
this building. This would make it more difficult to lease out the
spaces and it may not be a worthwhile investment unless the investor
can come up with a different use for it. Without the knowledge of
the broker, the investor may have ended up losing money due to a bad
investment once the shopping mall came along.
A broker may also be able to hunt up other properties for
investment. If, as an investor, you find that a property that you’ve
been considering is not a good investment, a broker may be able to
tell you about a few other properties that could be good for use in
the way that you’re planning. A broker will also have information
about properties before they even get listed. Sometimes this can
work in your favor. If the realtor knows of the property and tells
you about it, you see it and are interested, you may be able to
negotiate with the owner of the property before it ever gets listed.
This may give you the heads up on properties that others may have
outbid you on. You will not have to worry about competing with other
investors because they will not have known of the property. A broker
may do this for you if they will still get a commission on the deal
or they may forgo a commission or two in order to claim you as a
client and keep you coming back. If they make you money, you’ll be
more willing to make them money. This can be a win win situation on
both sides of the fence.
If you’ve been working with brokers for a while and have a
reasonably good idea of what you’re doing as an investor, you may
not want to work with a broker at all. Even if a broker has given
you a property or two, they will not continue to do that for long.
All other properties will have part of the profits divided with the
broker. If you feel that you’ve gained enough experience to deal
without a broker, you can potentially save yourself thousands that
would otherwise be a commission to the broker.
Being able to work without a broker will mean that you’ll have to
have some communication with those that are selling properties. If
you’ve done a lot of networking in the time that you’ve been
investing, chances are that you have done some networking and
meeting of people that do what you do. You may know owners of
several commercial buildings of your area. They may know that you
are a good business to deal with when they decide to sell their
property. In this case, there is little else that a broker will do
for you besides deal with the legal end of the sale.
If you’ve paid close attention in the closings and have looked
closely at the paperwork that’s changed hands during the meeting at
the close of the sale, you should be able to handle this part
yourself. The documents that brokers use to close a commercial
property sale can be purchased at most business office supply stores
and several bookstores. Additionally, you can draw up these
documents yourself with the help of your computer and printer. If
you purchase the documents once and make several copies of the blank
documents, you’ll have a good start. After you’ve done a few
closings yourself you may add some documents that pertain to your
business dealings or you may always use the documents purchased.
Either way, you will be able to handle the closing of property
transactions which will again save you thousands over using a
broker.
A broker can have their uses. When you are starting out in the field
of commercial investing, they can be a wealth of information and
very helpful in your transactions. In the beginning, they may be
well worth the investment that you have to put into them. Over time,
they may not be as necessary as previous. If you make a point to
network with others in the same or related fields, you will find
yourself getting information thrown at you left and right when a
commercial property comes up for sale. That will eliminate the need
for the broker in that sense. If you pay close attention to the
closings and gather the necessary paperwork to learn how a property
closing works, you will eliminate entirely the need for the broker
and this will save your company thousands at each closing. It makes
good business sense to use a broker in the beginning, but learning
about their job will ultimately raise your profit margins as you
eliminate their need and then the use of them at all.
About The Author
Tony Seruga, Yolanda Seruga and Yolanda Bishop of
http://www.maverickrei.com
specialize in commercial and investment real estate. As of
May, 2006, they and their partners are managing over $600 million
dollars worth of new projects.
|
2775 West Dickman Road, Battle Creek, Michigan 49037