THIS IS SERIOUS BUSINESS...
NO SCHMUCKS ALLOWED... CAPISCE? 🙂
I asume you have read RESIDENTIAL REAL ESTATE VULTURE thoroughly before proceeding as LOCATE and HOW TO GET THE MONEY TO CLOSE (as insurance in case you fail the same day flipp - simultaneous close) is basically the same.
Don`t get intimidated by the big numbers of commercial real estate, commercial deals are easier than residential deals and make you much much more money for the same or even less effort, here we go:
FAIR WARNING BECAUSE THIS WILL HAPPEN OFTEN
NEVER EVER, NEVER EVER EVER, ABSOLUTELY NEVER EVER, ACT UPON A REALTOR`S OR ANYONE ELSE`S SUGGESTION THAT ¨IT`S A GOOD DEAL AND YOU BETTER HURRY BECAUSE THERE ARE OTHER INTERESTED BUYERS¨, CAPISCE? NEVER LET ANYONE CONVINCE YOU TO BUY
YOU MAKE ALL DECISIONS
COMMERCIAL REAL ESTATE IS LOOKED AT ON A YEARLY BASIS
THE ONLY 3 THINGS YOU MUST KNOW TO EVALUATE COMMERCIAL REAL ESTATE?
1) Ask for asking price,
2) total yearly income, and
3) total yearly expenses.
Income minus expenses is the cashflow,
Figure out what percentage of the purchase price the cashflow is and that`s the CAP, simple, no?
Guesstimate the repairs by asking questions such as ¨ how much will it cost to totally renovate it?¨ or ¨how much work does it need?¨. You`ll find that many sellers have both a written bid AND a contractor already lined up saving you a lot of headaches and work, another advantage of commercial over residential real estate.
¨COMPS¨ ARE COMPARABLE SOLD OR RENTED PROPERTIES
If the subject property is a 20,000 sqft strip center then comps are SOLD or RENTED 20,000 sqft strip centers.
So every time you find a LEAD:
- Get the Fair Market Value (In Repaired fully rented condition), guesstimate the repairs by asking questions such as ¨ how much will it cost to totally renovate it?¨ or ¨how much work does it need?¨.
- Evaluate it to see if it makes sense by running the Formulas.
- If the numbers make sense, go to the property and establish the repair cost.
- Line up the cash to close.
- MAKE THE OFFER!
- Once an offer is accepted, IMMEDIATELY begin to market the property. Sell the properties using Real Estate agents, the Marketing materials and newspaper advertisements enclosed in this manual.
Better yet, wholesale funnel it
So looking at the funnel, lining up buyers is first so you know what they want, that way you¨re never holding inventory and know exactly what to buy/build.
You cannot do this all by yourself, you need a TEAM, everyone makes money in this game, mostly YOU, lol
1) A good real Estate Agent specializing in commercial investment property that has a good list of buyers/investors
2) A general contractor that has a crew big and good enough to tackle any type of rehab and/or construction Project
3) CASH TO CLOSE in case you have to close the deal because you failed the same day flip, dumbass, lol 🙂
ONCE YOUR TEAM AND CASH ARE ALL LINED UP (GAME IS ON):
1) You`ve located the subject property, run the numbers to make sure the deal makes sense, let`s asume for this example that it is a $12,000,000 property at 12% CAP 12% CAP rate simply means that the rental income of the property is bringing in 12% a year of what it cost you to buy it. Ask seller for 1) Net Operating Income, 2) Net Operating Expenses, and 3) Total amount needed in repairs, if any.
2) Call your real estate agent and verify that there are COMPS (comparable properties) supporting your numbers and to see if she/he has a buyer that fits to the specifics of the deal and call your contractor telling him to give you an accurate estimate of the REPAIR COST.
3) Have the agent do the selling contract with his/her buyer where you are SELLING the property to the buyer at a 12% CAP rate (Or whatever CAP rate the buyer is used to invest at, may be higher or lower than 12, it may be 6, 8, 9, 18, 20, or more), lol, give them what they want and same day flipps become easy and an ongoing thing, cultivate/build your buyers, get at leas 10 buyers lined up, 30 is better) and you put he property under contract to buy it at a 5%CAP rate, thus leaving you a 7% CAP rate SPREAD ) if selling ar 12%CAP rate (SPREAD) as profit for the same day flipp where the title company closes the deal and wires the funds to everyone, including your SPREAD
HOW TO FIGURE OUT THE CAP?
1) Ask for asking price, 2) total yearly income, and 3) total yearly expenses income minus expenses is the cashflow, now figure out what percentage of the purchase price is the cashflow and that`s the CAP, simple, no?
ex: If the yearly cashflow is $100,000 and the asking price is $10,000,000.00 then the CAP IS 10%
Yeah, that`s about it, no rocket science here, just common sense, the more you do it, the more mulah you`ll make. Use the comercial new construction calculator below to run the numbers accurately and quickly and remember that if not a new construction deal, if it is an existing property, just combine the lot and construction costs and make that your PURCHASE PRICE and what shows INSTANT EQUITY in the calculator is your SPREAD, lol 🙂
Good luck and if you get confused and/or need help at any stage, just ask me before fucking up as your reputation is your best weapon in this game so NEVER FUCK UP, capisce? 🙂
IT`S NOT WHAT YOU DO BUT WHO YOU DO IT WITH, DUH?
Your DIRT CHEAP SUPERLOW INITIAL DONATION ($500/month membership for on going consulting/support) in exchange for COMMERCIAL REAL ESTATE VULTURE comes with UNLIMITED CONSULTING, a consulting service which I normally charge 25% of what I help you make/save with my advice but you now bought the right to donate any amount you deem proper and fair, KARMA KARMA KARMA. Please provide me your TRANSACTION ID and say/write I AM A MADMAN when you contact me for help on this topic or I will ignore your ass like a the cold hearted bitch I can be when I must, capisce?) Contact me
NEVER BE AFRAID OF THE BIG NUMBER BECAUSE THEY`RE ONLY NUMBERS 🙂
CONGRATULATIONS, YOU JUST BECAME FINANCIALLY INDEPENDENT, MAKE IT HAPPEN
Ok then your tax dollars at work deleted my commercial calculator both from my server and from my computer, therefore, I share a few decent deals I did and circled in the vital stuff for you to think and figure out as an IQ puzzle as well as for us to discuss during Super High Intensity Training
All deals are the same, only addresses and numbers change, check out this other example of a deal I did:
HA... FOUND A COPY OF MY COMMERCIAL CALCULATOR (CC) 😛