Selling Real Estate to Investors
There is a difference between selling real estate to investors and selling to would-be homeowners. Real estate is usually not presented as an investment product, instead there are long listings of features interesting for the homebuyer. Real estate agencies and online listings focus on physical and legal features, and scarcely mention the current market and potential income.
However, a completely different set of criteria are relevant to investors who are considering real estate as a business. They are looking for the long-term capital appreciation of the asset, general inflation in the area, potential to increase the value by adding to the building or renovating it, and of course cash flow, that is rental yield.
It may not even occur to an Owner how their property can be used as a revenue-generating asset, depending on where it is located, what function the new owner may give to it, and how the interior space is creatively utilized.
Experts are the key
As soon as motivated Experts are involved, the unsellable space is transformed into a concept, an attractive business idea which sells itself. The creative touch of designers and architects, coupled with the market knowledge of researchers and industry experts lays the foundation for a new product in the same physical space. An investment product instead of a piece of property for sale. An investment product is traded on a different market. There are investors who are looking for a McDonald’s franchise, for example, and not merely some commercial property near a gas station. Even if it is not yet built.
A real estate market expert and an economist will quickly make calculations regarding how much investment can go into the property to justify a higher return. Another group of Experts does the manual work, and after the interior design team, stone mason, plaster board specialist, carpenter, electrician, plumber, HVAC expert, landscaping professional, gardener, and project manager have all completed their contribution to the investment product, the property is transformed. As a result unused and expensive-to-maintain warehouse space may have been converted into a prestigious office building, increasing the equity value and rental potential of the asset. A large apartment may have been split into two smaller units much easier to rent.
The goal is to create sustainable revenue streams
Experts at the DealWorkshop will consider the total value of the asset, the needed capital for the changes, and the type of real estate: residential, commercial, plot of land for development, industrial, resort, agricultural, and