How to Find the Best Industrial Real Estate Deals
Ever wondered how some investors secure the best industrial properties while others are left scrolling through endless online listings? From virtual gateways like LoopNet to driving through industrial zones, these are the methods and best practices that will set you on the fast track to industrial real estate success.
1. Leverage Online Commercial Real Estate Platforms
Alright, let's kick off our journey with a method that's just a click away – leveraging online commercial real estate platforms. Websites like LoopNet and CREXi are your virtual gateways to a world of industrial opportunities. You can specify your criteria, explore detailed property information, gaze at photos, and even get in touch with listing agents. It's like having the entire industrial real estate market at your fingertips.
Best Practices:
Refine Your Criteria: Use the platform's filters to narrow down your search based on specific criteria, such as location, property size, and amenities.
Set Alerts: Take advantage of alert features to receive notifications about new listings or price changes that match your preferences.
This next practice goes hand in hand with our next tip for finding deals. Engage with Agents: Initiate conversations with listing agents to gain additional insights into the properties you're interested in.
2. Work with Local Real Estate Brokers
Now, let's talk about a key player in the real estate game – commercial real estate agents. These experts are like your navigators in the local market, equipped with extensive knowledge that can make your search far easier. Collaborating with them can provide you with insights on hidden gems that might not be publicly listed. From negotiation tips to guiding you through the entire purchasing process, they're your go-to partners in this industrial real estate adventure. I run a team of brokers called The Cauble Group, that does exactly that here in Nashville. So, feel free to…reach out.
Best Practices:
Build Relationships: Cultivate strong relationships with local brokers by attending industry events and networking functions. Stay top of mind with consistent communication to them.
Clearly Communicate Goals: Clearly communicate your investment goals and preferences to help brokers identify suitable opportunities. Ideally, you’ll have a buy box put together with all of your property criteria.
Seek Local Expertise: Leverage the broker's local expertise to understand market trends, upcoming developments, and potential investment hotspots.
3. Networking and Industry Connections
Networking is the age-old art of building connections. And it’s not always about what you know, but who you know. Attend industry events, seminars, and networking functions to meet other professionals in the world of commercial real estate. Your network might just be the goldmine that you need. Strike up conversations, gather information, and who knows, you might stumble upon the industrial property of your dreams.
Best Practices:
Attend Relevant Events: Participate in events specifically related to industrial real estate to maximize your chances of meeting key industry players. SIOR is an organization worth looking into here.
Initiate Conversations: Actively engage in conversations with professionals to gather information about potential investment opportunities. Everyone wants to talk at these events, so be the one willing to start the conversation.
Utilize Online Platforms: Extend your networking efforts to online platforms, such as LinkedIn, to connect with industry professionals beyond local events. Use that soapbox to reach a broader audience.
4. Drive and Observe
Ready to take the wheel? Literally. Jump in your car and hit the road. Drive around industrial areas that pique your interest and get familiar with the areas. Keep a keen eye out for rundown looking properties or those "For Sale" or "For Lease" signs. Jot down the contact information, because sometimes, the best opportunities are found off the beaten online path. This hands-on approach could unveil hidden treasures not listed on your usual property websites.
Best Practices:
Explore Beyond Online Listings: Discover off-market opportunities by physically exploring industrial areas and noting down potential leads. Doing so will also help you familiarize yourself with what’s out there.
Document Findings: Keep a record of the properties you observe, including location, contact details, and any additional observations. I like to keep track of everything in my CRM so I know when and how I’ve contacted each property.
Combine Online and Offline Approaches: Integrate your hands-on observations with online research for a comprehensive understanding of the industrial real estate landscape. There’s a lot of solid, free information in your local tax records.
5. Consult Local Economic Development Agencies
Your local economic development agencies are like the gatekeepers to industrial real estate information. Reach out to them; they might just hold the key to available properties within their jurisdiction. Inquire about industrial zones and upcoming developments aligning with your investment needs. These agencies are a valuable resource often overlooked in the quest for industrial properties and they’ll often know who the property owners are.
Best Practices:
Research Agency Programs: Explore any programs or incentives offered by economic development agencies to support industrial investments. Wilson County, just outside of Nashville, has exploded with all sorts of development because of their economic development agency.
Attend Agency Events: Participate in events organized by these agencies to establish connections and stay updated on industrial developments. Couldn’t hurt to sign up for their newsletters, either.
Inquire About Future Plans: Inquire about upcoming developments and industrial zones to align your investment strategy with the region's growth. Doing so could give you a leg up on investing in the path of growth.
6. Auctions and Real Estate Auction Websites
Auctions are a bit of a different ball game altogether. Keep an eye on industrial real estate auctions and auction websites because these platforms offer unique opportunities and often competitive prices. However, and it's a big however, make sure you do your due diligence. Know what you're getting into before participating in an auction because they often require large down payments upon winning the auction. If you have the cash to make a 10% down payment within about 30 days of the auction before closing, you can often get really good deals here.
Best Practices:
Understand Auction Dynamics: Familiarize yourself with how industrial property auctions work, including bidding processes, financial requirements, and timelines.
Research Property History: Investigate the history of properties listed in auctions to identify any potential challenges or opportunities. Do as much as you can on the front end online before touring the property the day of the auction.
Set Budget Limits: Establish clear budget limits before participating in an auction to avoid overextending your financial resources. It can be easy to get caught up in the excitement, but remember - these are investments and you have monetary limits in place.
7. Engage in Direct Outreach
If you've got specific properties or locations in mind, why not reach out directly to property owners or landlords? Express your interest, start a conversation, and see if they’d be willing to sell. Sometimes, a direct approach opens doors that might have remained closed otherwise. I’ve bought many amazing properties this way and often negotiated strong seller financing terms that helps boost the projects numbers.
Best Practices:
Craft Personalized Messages: Tailor your outreach messages to convey genuine interest and showcase your suitability as a potential investor. I like to hand address each letter to increase the open rate.
Highlight Investment Intentions: Clearly communicate your investment intentions, whether it's for purchase or lease, to align expectations with property owners. If you don’t have the cash and are looking for seller financing, go ahead and say that on the front end to save some time.
Build Rapport: Focus on building rapport with property owners through respectful and transparent communication to foster positive relationships. Tour the property with them, if you can - you never know when that relationship will come in handy.
Great deals don’t fall from the sky, but if you’re willing to put in the work, they’re out there, no matter what kind of market we’re in. One of the most successful methods I’ve used is number 7, sending direct mail to the property owner, so check out how I used that method in the video below.