Buying commercial real estate is no different than buying any other business commodity. The goal is to purchase low enough in order to reap the highest rewards, whether this is in the form of rental income or reselling at a higher price. Regardless of the type of property, achieving this goal means finding owners of commercial real estate who are motivated to sell.
What Is a Motivated Seller?
In commercial real estate, the term "motivated seller" is used to describe a seller who needs to sell their investment as quickly as possible for a number of reasons. Due to this need, such sellers are typically willing to negotiate more than those who have the time, money, and patience to wait for a buyer who will pay more. Those buying commercial real estate from sellers more willing to negotiate can wind up with a more profitable investment.
Finding Motivated Sellers
Finding a motivated seller means being observant and looking for signs that could mean a property owner is facing the need to sell quickly. It also means providing a way for sellers to find parties interested in buying commercial real estate from them, such as the following:
- For Sale By Owner - Any home or business property being sold by the owner could be worth investigating. Often times, these properties have been on sale for a long time. The longer the property does not sell, the greater the chances are that the owner will consider a lower price.
- Vacant Properties - Buildings and homes that sit empty are a financial burden to their owners. Even if they are not advertised with a sign, a person may be able to obtain such property if the owners are motivated enough to quickly sell the property if an interested party makes an offer. Contact information should be left at these properties or buyers should find another way to contact sellers to inquire.
- Real Estate Advertising - Those looking to buy commercial real estate need to utilize real estate advertising in two ways. First, search the ads for properties FSBO and those that illustrate an owner’s obvious need to sell fast. In addition, ads should be published indicating a person is seeking real estate to purchase.
- Flyers, Websites, and Other Publicity - Publicize the desire to purchase properties in a variety of ways. Create a website listing the types of buildings that will be considered, then publicize the link in local newspapers and flyer inserts, in the yellow pages, on social media, and wherever it is possible to post the link. Post flyers locally. Have business cards made to post on local bulletin boards to show where sellers can find a buyer for their unwanted property.
- Ask for Referrals - Ask friends, family, and even other investors if they have any properties for sale by owners who have a pressing need to sell. A property that may not be right for one investor may be a perfect opportunity for another.
For the greatest success in finding motivated sellers, commercial real estate investors should utilize as many of the methods referenced above as necessary. As properties are located and inquiries come in, those interested in buying commercial real estate can then determine which homes or buildings offer the most promise and profit. Depending on each seller’s individual circumstances and willingness to negotiate, buyers can often do well in obtaining great investment properties!