Buildings for sale – how to find them
I want to buy Trump Tower. I want to buy Caesar’s Palace.
Okay, maybe I don’t have a chance. But suppose I’d be happy to buy a small self store business, a duplex or triplex, or maybe a health center or a small office building, where should I be looking?
Although you might find duplexes and triplexes on Zillow and other property listings sites, larger multi-family properties and commercial property are harder to find. While Loopnet carries quite a few properties, it’s probably more useful as a research resource than a way of finding investments. Often, brokers place their best deals with existing contacts, so only the hard-to-place investments show up on Loopnet. Besides, Loopnet is quite aggressive in trying to sell its premium services (which in our view aren’t really worth it).
Not a transparent market
You’re going to have to look harder than that. Of course, commercial buildings are for sale all the time, but it’s not a transparent market. Most deals go through commercial brokers, and sometimes through brokers who sell businesses as well as real estate. You can become a major investor in residential real estate without knowing other landlords, but if you want to invest in commercial property, you really need to start networking. There are plenty of organizations for commercial landlords and real estate investors, such as local Real Estate Investors Association (REIA) chapters. Go to meetings, chat to people, ask for advice, and learn from the speakers.
You’ll obviously want to speak to brokers, but other people can also help you find buildings for sale. For instance, bankers often know clients who want to offload a property or two, and real estate lawyers may also be able to suggest where you can look for a deal. But you’ll need to earn their trust before they’ll open up. Property managers, too, may have a shrewd idea which building owners might consider a sale, and may even be prepared to introduce you. And of course other investors can be a way to find a property. If an investor is struggling to put together financing for a larger than usual project, and you’re on their call list, you could have a deal.
Many deals are huge in size
That’s still not going to let me buy Trump Tower, though, and it could be that the deals you’ll see are a bit too big for your financial means. In that case, perhaps you should stop trying to buy a building, and look at REITs and real estate funds as a way to invest in real estate.
REITs are easy to trade, since they’re quoted on the stock market and you can trade through your broker. Most REITs are of a large enough size that getting hold of stock isn’t ever going to be a problem. They also have a huge advantage over direct investments in real estate, since they’re highly liquid. You can sell whenever you want or need to, and you can easily sell part of your holding. Plus, there are no legal formalities to go through as there are with property deals.
And by the way, it turns out that I actually can buy Caesar’s Palace. Or at least, I can buy a small piece of the action – because it’s owned by Vici Properties (VICI), a casino and golf course REIT. Trump Tower I may have to do some more work on!