One of the most talked about ways to save money on commercial real estate is to buy it at auction. This is a unique process that allows you to buy a piece of property without having to worry about negotiating with the seller. All you have to do is focus on being the highest bidder, and chances are you will get a good deal.
With that in mind, there are some pros and cons to commercial real estate auctions that you need to think about before relying on this as a profitable investment. In Part 1 of our guide, we will go over the positive side of commercial real estate auctions, and then we will focus on the negatives in Part 2.
This is one of the biggest reasons why people go to commercial and residential real estate auctions. They think that they can get a good deal. If a property is worth $500,000, you might be able to get it for $300,000 or less, depending on which bidders are there that day. There are a lot of factors that go into determining whether or not you will get a good deal, but for the most part, you should eventually be able to get a high value property for a low price.
Another benefit of going to commercial real estate auctions is the fact that you get to the property that may never be listed for sale. This usually happens when a bank has a loan on the property and the owner just filed bankruptcy or defaulted on there alone. The bank wants to make a quick sale so it can get its money back. It is not concerned about making a profit like a seller would be. You can attend an auction and potentially see property that will never be listed with a commercial realtor.
Expand Your Resources
Any big time investor knows that the key to having a successful commercial real estate business is to have an expansive portfolio that covers multiple property types and investment opportunities. You never know when a good deal may come along, this is just another way to go about finding them. Build relationships with good auctioneers in the area that will give you the scoop on when new auctions come up, and you’ll quickly fine yet another way to earn money and succeed in this industry.