Eight Habits of Highly Effective Commercial Real Estate Investors

Investing in commercial real estate can be a very lucrative business—but also a risky one that requires patience, fortitude, and industry knowledge to ultimately be successful. How do you separate yourself from the crowd? Here are eight ways highly effective investors stay on top of the game.

  1. Create a Solid Business Plan – It’s important to visualize both your short and long-term goals, which helps maintain focus and get back on track if you ever hit a stumbling block.
  2. Know Your Market Inside and Out – Acquire an in-depth understanding of each of your markets by keeping on top of current trends, transactions, and key economic figures that allow you to make informed decisions about purchases, dispositions, and other opportunities, both now and for the future.
  3. Read the News Every Day– Subscribe to publications that cater to both your market and industry, including daily newspapers, business journals, and trade publications. Set aside time each day—whether at breakfast, on your commute, or on a break—to catch up on the latest news. Blogs, Twitter, Facebook, and LinkedIn are four other sources to find and share stories related to your market.
  4. Never Stop Learning – Keep abreast of all industry regulations, laws, trends, terminology, and technology, which will allow you to adapt easily to market changes and conditions. Understand the ins and outs of your properties, your tenants, effective ways to save money, and how to keep your assets competitive.
  5. Understand Risk – There’s a reason there’s that old adage, “If it sounds too good to be true, it probably is.” Educate yourself on the risks that come with real estate investments—not only in terms of deals, but legal, financial, and market risk. Avoid investing in assets you don’t understand.
  6. Carve a Niche – While it may be enticing to be a jack of all trades, many successful real estate investors build their business on a specific niche; for instance, it might be only investing in certain asset classes, industries, or geographies. This allows investors to really develop a deep knowledge of the niche and everything that comes along with it.
  7. Build a Solid Team – From accountants, lenders, and lawyers to business partners, operational experts, and mentors, successful investors build a hard-working, knowledgeable team around them in order to share expertise and gain insight.
  8. Network – You never know from where your next deal or opportunity may come—perhaps from a colleague, client, business partner, friend, mentor, or fellow alumnus. There are many ways to drum up new business: Attend networking events, join boards, or become a member of industry or alumni organization, to name a few.

Real Estate Investment to Remain on Fire for 2016

As we head into the new year, investor sentiment toward commercial real estate remains positive, with many investors reporting that they plan to increase their allocations in 2016, reports the recently released Colliers International Global Investment Outlook. Overall, the U.S. remains the top destination for global capital, with global gateway cities the preferred investment target.

One trend the report noted was that while global appetite for real estate remains strong, rising uncertainty stemming from China, economic weaknesses in emerging markets, the tightening of monetary policy in the U.S., and geo-political events across the global has made investors more wary. Of the 600 investors surveyed for the report, 44% said they’re “likely” or “highly likely” to take on more risk over the next 12 months—a drop from 59% a year earlier, though this also may reflect that fund managers have taken as much risks as their mandates allow them. This trend was apparent across all types of capital, with the sharpest reduction in private equity funds, which dropped from 81% to 47% over the year.

When the report looked specifically at U.S. investors, it found that they have dialed back their intended investment activity from last year, with 21% of investors expecting to be net sellers this year, compared to none last year. Fewer investors also intend to expand their activity, while this group, as a whole seems to be moderately risk averse. Yield expectations among U.S. investors tend to be more bullish, with 68% of them expecting leveraged returns of between 11% and 20%, even though they recognize that finding the right yields has become increasingly challenging and further cap rate compression may be dwindling in some markets.

Given these trends, iFunding believes that crowdfunding will become a more popular investment vehicle for those looking to buy into commercial real estate opportunities in 2016.

Investors are reporting the opportunities provided through real estate crowdfunding have competitive risk-adjusted returns, high tangible asset value, attractive and stable income return, and are a good hedge against inflation. While there is always risk associated with investing in real estate, iFunding has the experience and capacity to perform due diligence on all our listings with the goal of minimizing risk and maximizing returns, whether in multifamily, office, industrial, retail, or hospitality.

The Most Popular Property Choices

According to Colliers, the most popular property choice for global investors in offices in central business districts at 61%, up from 46% last year. This followed by industrial and logistics (48%), developments (39%), and shopping centers (38%). Suburban office came in fifth and was one of the fastest growing sectors in terms of preference (32%, up from 21% in 2015), while multifamily felt the steepest drop, falling from second to sixth place this year despite continued interest from U.S. and Canadian investors. To read the full Colliers International Global Investment Outlook report click here.

 

Four Reasons Crowdfunding Makes Sense for Financing Real Estate

In 2014, global crowdfunding grew by 167% to reach $16.2 billion raised—$9.4 billion in the United States alone, and $1 billion of that in real estate. This year, Massolution, a crowdfunding research and advisory firm, predicts that number will more than double.

Many industries are taking advantage of this innovative platform, including businesses, entrepreneurs, social causes, films, performing arts, music, and recording arts. Real estate has particularly latched on to the model, with Times Realty News tracking 152 real estate crowdfunding platforms in the United States and 62 globally as of December 21.

Whether you’re a new or seasoned commercial real estate sponsor, tapping into a crowdsourced platform like iFunding should be taken into serious consideration for financing acquisition and development projects in the new year. Here are four reasons why crowdfunding makes sense:

1) It’s an excellent alternative to traditional lending sources

Since the market downturn, banks and other traditional lenders have enacted stricter credit and lending standards. Crowdfunding can fill in gaps created by more diligent underwriting and provide capital for projects that these lenders may otherwise find too complex. Larger institutional lenders may also pass over opportunities underneath a certain price threshold, instead preferring one $30 million investment to managing six $5 million investments. Crowdfunding is a strong contender in the mid-market space.

2) It taps into an entire new class of hungry investors

Companies like iFunding track the solicitation, preferences, and commitments of thousands of accredited investors whom sponsors or developers may not have access to via traditional networking. Crowdfunding’s digital platform allows for a broader promotional reach, introducing projects to investors who may not otherwise be familiar with the sponsor or geographical area.

Overall, crowdfunding broadens participation in real estate investment. iFunding’s typical customer is an entrepreneur with $1 million to $5 million net worth seeking high-quality deals, and investment opportunities are available for as little as $5,000 across a broad range of property types, including multifamily, retail, office, and mixed-use. And as crowdfunding regulations begin to encompass more investors, we’ll see greater participation at even lower buy-ins.

3) Technology makes the process simple and efficient

In addition to tracking potential investors, technology utilized by crowdfunding companies takes care of a project’s promotion, subscription, due diligence, fund management, project documentation, investor communication, and financial reporting—allowing sponsors to instead focus on project quality and completion. The overall process is more streamlined, reduces sponsor and investment fees, and increases transparency into a project.

4) It’s a targeted approach

A digital platform allows investors access to carefully selected investments based on their preferences, from property type and location to risk profile and return profile. This ensures the right investors are matched to the right sponsors and projects.

Real Estate Crowdfunding is Only Rising with iFunding’s Best Month in August 2015

iFunding, a leading real estate crowdfunding platform, had its best month in its 3 year history, offering investors over $14 M in real estate investment properties.

August is typically one of the quietest months of the year, with investors distracted by summer activities. However, due to the quality of iFunding’s real estate opportunities, the company quickly funded six of its eight projects listed within a week of introducing the project to its 7,000 accredited investors.

“iFunding takes pride in providing quality deals for our investors, “ William Skelley, Founder and CEO, states, “We have been focusing on developing sound relationships with our sponsors, and this month, it’s clear this effort has paid off.”

“We thoroughly enjoy working with the iFunding team and using its platform for our funding source.” Myles Bruckal, Founder of The Bruckal Group says, “Raising capital with iFunding exceeded our expectations, and therefore listing with them again was an easy decision. We are honored to be apart of its most successful month, and we’re in discussions regarding our next project for the iFunding platform. ”

iFunding expects continued growth by offering larger and higher quality opportunities and acquiring additional accredited investors.

About iFunding 
iFunding is a leading real estate crowdfunding platform, facilitating debt and preferred equity fundraising for properties ranging from multi-family residences to apartment towers, hotels and resorts, ,retail locations, malls, offices, mixed-use buildings, and more. iFunding provides opportunities for its 7,000 accredited investors to invest in institutional-quality real estate deals, with a minimum investment of $5,000. The company oversees deals throughout their lifespan, providing extensive information and transparency to give investors insight and oversight into their investments. It also generates financing for multi-project funds, and partners with family offices to co-fund opportunities with its individual investors. iFunding offers flexible financing terms to real estate developer and operators. Visit http://www.ifunding.co for more information, or connect with us on LinkedIn athttp://www.linkedin.com/company/innovational-funding, on Facebook at http://www.facebook.com/iFunding , or via @inno_funding on Twitter. The phone number for investor and operator inquiries is 844-367-4386.

iFunding Contact:
Paula DeLaurentis
Marketing
844-367-4386 ext.3
press(at)innovationalfunding(dot)com