We talk a lot about buying commercial real estate, like what to buy and where to buy and why to buy. But rarely do we speak directly about how investors screw up and building owners make mistakes when making decisions based around their commercial property. With commercial real estate Timing can be second only to the Gut feeling many savy investors feel when its time to pull the trigger. Many of those that buy and sell and own real estate have great timing from date of purchase to negotiations, but rarely do they miss an opportunity because of bad timing. So here goes 3 of the many ways to mess up your timing in Real Estate.
- Missing the Deal – You hear it all the time ” I should have bought that when it was ______ dollars.” Or you hear about someone being told a property was going to market, below marketing value and before the public knew and they did not act. Its the same mistake over and over again about missing the boat. Terrific real estate is bought at just the right time for the right price. Many investors have the ability to pull the trigger and buy a property based on a gut feeling even before they may have all their due diligence complete. Knowing a deal is too good too pass up because you are in the right place at the right time is one of the best places to be and passing on an opportunity typically means a sad story down the road.
- Haggling with Tenants – How many times can you beat up a new tenant for just the perfect terms and at what point do you accept the offer and lock in a lease? I have been a part of many lease negotiations that after many weeks of back and forth the tenant decides its too much of a hassle over a few dollars and working with that landlord. Landlords must learn to at some point stop wasting their time and sign on the line. Getting close to terms with a hot tenant is sometimes your best bet and especially if you do not have another interested party close behind. The ability to stop and close a deal will keep you from sitting with empty space and frustrated tenants down the road.
- Sell – A great quote by a mentor of mine is “It takes a lot of perfect months to collect that much rent.” Meaning knowing when to take the offer to sell versus collecting rent for the next number of years. Understanding that a good offer can rid you of the headaches of property management and ownership and not having to collect rent or spend money on a property is this. If you can sell a property (now that appreciates slowly), for the same value that holding onto it for the next 10 years would provide you had better think about selling. Hoping you can get the same offer next year can be a great loss of cashing out and moving on.
These are just a few suggestions and in no way faults of owners but from experience these stand out as recurring events that lead to bad timing in Real Estate. Its an art of buying, holding, managing and selling to own real estate and with some good advice and business management you will make great decisions and will have great timing. Sometimes its just a matter of getting out of the way and letting a deal come together and others its about jumping in and making it happen. Now go buy some real estate…
Curt has been in the Indianapolis Real Estate business for over 10 years and spent his first years learning all aspects of commercial management and brokerage. He has had great success in managing existing commercial projects and new retail and office developments. Curt specializes in building owner representation and purchases in the Westfield Indiana market as well throughout the Indianapolis Metro area. Curt is passionate about growing the local Westfield community and in his free time volunteers with Westfield Youth Assistance and raising 2 children with his wife Jennifer.