In order to be successful in commercial real estate (CRE) investing, it is important to be able to spot a good location. For instance, a retail property has to be inviting not just for customers, but also for staff as they want to work in an environment that makes them more productive. Pristine locations, in places such as Sarasota, Tampa Bay, and Phoenix, are in high demand for CRE. Investors continuously look for a news scoop that tells them whether or not to invest in another CRE project. This is something that Randy Benderson specializes in.
Randy Benderson on CRE Investing
Investing in commercial real estate is big business. While there is a lot of money to be made in it, it also requires significant investments. It is not, therefore, solely about spotting that next great location, buying it, and flipping it for a massive profit. Most of the time, it requires investors to make renovations or to engage in other activities that change the financial structure of their business.
In many cases, when a commercial property is up for sale, it is because the business that was in it, is no longer profitable. This means that an investor is essentially taking on a high risk property. Good investors are able to take something and improve it. For instance, they will put in an application for rezoning so that an industrial property can be used as an office property, and so on. But this takes considerable skill and knowledge. There are success stories in which people like Benderson were able to create a 58% profit margin out of a building that was seemingly impossible to manage. However, not everybody is able to achieve these types of successes.
It is very important, according to Benderson, that investment firms are encouraged to use their available resources in such a way that individual investors can see the greatest profits. One way to do this is by diversifying a portfolio. This is why the majority of investment firms not only focus on CRE, but also on other types of properties. This is about diversifying knowledge, which enables them to make the right decisions when it comes to their investments. In a nutshell, investing is not just about buying and selling for a profit, it is about a full financial restoration.
The Importance of CRE Investments
There is a significant need for investment firms to focus on CRE properties. There is an equally big need for them to complete financial restorations. This then creates a snowball effect: by making properties more attractive, more businesses will come. This, in turn, improves the economic situation of the area, which means properties become even more attractive for even more businesses. However, someone has to be the first to take that risk and invest in a property that seems to be losing ground. And considering CRE investments are often worth millions of dollars, those are significant risks that very few people are able to take.