Zeus. Minotaur. Easy-to-find CRE deals. While all of these seem like mythical fabrications of someone’s imagination, the latter is actually more real than you might think. In fact, there are a variety of commercial real estate myths out there that deserve some analysis.
Let’s dissect four myths in the CRE industry, as well as the realities behind them.
1. You can’t find any good deals.
What makes a “good deal” in commercial real estate? Ask 10 different CRE pros and you might get 10 different answers. The term “good” is subjective, but however you define it, it’s possible to get the right opportunities if you’re using the right tools. CRE software like Quarem can help you determine market value for your existing or potential properties, meaning it’s easier to determine whether the market is down and ripe for a value play. This myth is really just an excuse by CRE pros who aren’t willing to do their homework.
2. There’s something wrong with a property if it’s for sale.
All CRE properties are not for sale because of underlying issues or bad investments. Sometimes, properties are sold as part of an exit strategy, part of a move to increase cash flow or a piece of the puzzle of obtaining another investment or otherwise liquidating. The myth that a property is only for sale if something is wrong with it was probably invented by someone who didn’t want any competition. If you do your due diligence on a commercial property, it can be a good investment.
3. There’s too much time and money involved with CRE research.
Spreadsheets. Math. Data analysis. The list of what’s involved with CRE research is long and can seem daunting… if you’re doing it manually, anyway. The reality behind this myth is that there are a variety of CRE software options available today that take all of the “grunt work” out of commercial real estate research. You can organize, filter, view and analyze metrics in a CRE software solution that are automated and will facilitate educated decision making.
4. Commercial real estate is too risky.
There’s a risk in any business venture, so this myth isn’t exactly fair. Sure, some CRE pros are going to be more successful than others, but that isn’t an indictment on the industry itself. Certain types of commercial real estate are riskier than other types as well, but that just means you have to properly analyze its potential volatility. (Triple-net lease properties, for example, are always going to provide a fairly low-risk opportunity.) At the end of the day, you can find a low-risk option if you know what you’re doing or vice versa if you have a higher risk tolerance and want to increase your potential earnings.
If you’d like to see how Quarem debunks several of these myths, request a demo today.