A Quick Guide to Real Estate Crowdfunding

Real estate crowdfunding isn’t just the newest buzz-worthy trend in the space. It’s one of the most exciting ways investors can raise capital, invest in real estate, or simply diversify a portfolio. If you’re new to the concept of crowdfunding, you likely have questions, such as:

  • What is real estate crowdfunding?
  • Are there different types?
  • What are its benefits?
  • Are there any disadvantages of crowdfunding real estate?

Crowdfunding, while it’s not a traditional fundraising method, is a powerful way to finance your real estate endeavors. In fact, the real estate crowdfunding industry was valued at $1 billion in 2017 and is expected to grow to nearly $87 billion by 2025.

What is Real Estate Crowdfunding?

Basically, crowdfunding in real estate involves raising the money you need for investments by enlisting several small contributions from a large investor pool rather than asking just one or two investors for a large, lump-sum investment.

Another key difference between crowdfunding and traditional capital-raising methods is where the transactions occur. While traditional methods usually involve in-person meetings and transactions, crowdfunding is normally done via an online crowdfunding platform.

As crowdfunding continues to become a more acceptable funding alternative, more people are using these platforms to reach accredited groups of investors. Even small business owners launch campaigns to fund smaller investments.

Types of Crowdfunding

Real estate investing is a great way to grow long-term, sustainable wealth and bulk up your net worth, perhaps even more so than playing the stock market. If you’re an investor with a bit of capital already built, familiarize yourself with the two main types of real estate crowdfunding: Equity and Debt.

Equity Investments

This is the route most investors choose simply because it allows for greater returns than debt investments. That said, there’s also a bit more risk involved. An equity investment gives all investors a stake in the property, essentially transforming them into shareholders.

When you choose this investment strategy, they base returns on the property’s total rental income less any fees charged by the platform. If they ever sell the property, each investor would also earn a slice of the property’s appreciation value. Depending on the crowdsourcing platform, payouts typically get sent at the end of every quarter.

Equity investment benefits include:

  • Unlimited returns and could lead to substantial annual income
  • Lower fees
  • Considerable tax breaks or benefits

Equity investment cons include:

  • Riskier investments
  • The hold period is longer

Debt Investments

On the flip side, debt investments make you a lender of sorts for the owner of the property. You receive fixed returns based on the mortgage loan’s interest rate and for the amount you invested. All of that sounds like a pretty good real estate investment opportunity.

Depending on the real estate investment platforms you use, you’ll either receive monthly or quarterly payouts. Also, since you’re investing in the property’s debt, if the property is sold, your investment payout is given priority.

Debt investment pros include:

  • Steadier returns
  • Less risky
  • Shorter hold times

Debt investing cons include:

  • Much higher fees in some cases
  • Capped annual returns

Overall Real Estate Crowdfunding Benefits

It doesn’t matter if you’re at the very beginning of your real estate investment journey or you’re a pro in the industry, it can often be difficult to come up with the right financing strategy. Since crowdfunding merged with the real estate industry, a lot of savvy investors have used this fundraising method to score deals. Aside from the benefits noted above, real estate crowdfunding has a host of additional, notable benefits, such as:

  • Increased funding options
  • Widening your network of investors
  • Direct marketing doubles as a marketing tool for your real estate business
  • Commercial real estate investment success creates a positive word-of-mouth buzz
  • Leads to increased client loyalty
  • Platforms are user-friendly and save you time and money
  • Provides access to peer feedback

Because crowdfunding is such a public-facing venture, you’re putting yourself and your agency “out there” for potential criticism, whether you’ve asked for advice or not. However, this is a great way to take some information to heart—not everyone on the internet is out to break your spirit. In fact, most critics aim to help you identify and fix flaws in your investment strategy.

Real estate crowdfunding platforms have a little bit of a learning curve. When you launch your initial campaign, the feedback you get from other real estate investors can help you increase the success of your future campaigns.

Drawbacks of Real Estate Crowdfunding

As attractive as this strategy is, it might not be for everyone. It’s important to understand there are some disadvantages to real estate crowdfunding, such as:

  • Uncertainty—There’s always the chance you could lose out, and while you may be entirely confident of your deal’s success, it may take a bit more convincing before other investors will join you.
  • Return rate—The most common crowdfunding deals have investment periods of up to five or more years. Don’t expect immediate returns.
  • Lack of control—This is perhaps the worst drawback of real estate crowdfunding investments overall. Just because you invest, it doesn’t mean you have decision-making power over the property you invest in. So, to really get other investors on board with your deal, they must feel completely confident in your ability to choose real estate deals wisely and know that you’ve done your due diligence.

Real Estate Crowdfunding – Wrapping Up

Because it’s such a simple way to source funding for investment properties, investing in crowdfunding is likely to continue rising in popularity. When used correctly, real estate crowdfunding sites are a win/win for equity and debt investors, and those looking for funding. As you begin to research into the various crowdfunding platforms, follow good practices and do your due diligence when investing.

ProspectNow is the key to landing the leads you’re looking for. We’ve been helping real estate agents, brokers, and investors just like you find the information they need since 2008. The data you can find on ProspectNow sells for much more money on competing platforms. So, you’re not just saving money, but you’re finding more leads and closing more sales—effectively making more money by partnering with ProspectNow.

5 Reasons Why You Should Be Using ProspectNow: Using Data to Get Ahead of Competitors

 

Data has become increasingly critical to success in the commercial real estate market over the last couple of decades. Trends toward digital transformation—adopting digital tools that can collect information and automate some tasks instead of burdening workers—have made data more accessible than ever. Improvements in technology have also made it easier for businesses to:

  • Make informed decisions
  • Identify solutions quickly
  • Take strategic approaches instead of relying on gut instincts
  • Access more resources
  • Get stronger returns from investments

Data collection and analysis serve the commercial real estate market in different ways from other industries. Here are some ways data contributes to real estate success, and why ProspectNow is your ideal source for data access.

Predictive Analytics Helps You Identify Investment Opportunities

How do you know which property owners to approach about purchasing their commercial real estate? You can send brochures, emails, and letters to as many business owners as possible. That approach costs a lot of money and doesn’t guarantee any results. You could spend thousands of dollars trying to generate leads without closing a single deal.

Predictive analytics uses real-world information to help you focus on properties owned by people likely to sell in the near future. This data process uses information from public documents, industry research, and other sources to pinpoint properties that owners may want to sell.

For example, a property that enters the pre-foreclosure process can cost someone a lot of money. Clearly, the owner isn’t profiting from the investment. Each month adds to their financial burden. With predictive data, you can anticipate their future desire to sell and reach out to them now to make an offer. The owner might not accept your offer immediately—investors often hold out and hope that their situations will change—but your offer lets them know you’re interested. When foreclosure becomes inevitable, they will turn to you.

You can also use predictive analytics to assess factors like empty retail space in an area. A building that has retail spaces open for several consecutive months might want to unload the property as soon as possible. When you show up with an offer, you can seem like the perfect solution to their problem.

ProspectNow uses a proprietary approach to predictive analytics to help you identify opportunities before your competitors do.

Access the Contact Data of Commercial Real Estate Owners

Identifying an opportunity in the commercial real estate market can help you make money. You can only purchase property once you know how to contact the current owner. Unfortunately for real estate investors, most business structures obscure the names and contact information of owners. When you look up a building’s deed, the owner might say Big Jobs Corporation of America. That doesn’t help very much.

ProspectNow has a growing database that includes the key contacts of 30 million companies. You won’t have to wade through public documents or wait for the office of the Secretary of State to give you information about who owns a corporation. With ProspectNow, you gain direct access to the phone numbers, business addresses, and emails of decision-makers.

ProspectNow goes a step further. The platform enables you to send direct mail to the property owners you want to contact. You can customize your mailers to include your name, business information, and logo. Give your communications a professional look so property owners take your offers seriously.

PropertyNow Integrates With Your Existing Systems

PropertyNow doesn’t have to exist outside of your IT system. You can download data to your network or connect to the database through an API. These options put you in charge of listings that include:

  • More than 100 million residential properties
  • Nearly 40 million commercial properties
  • About 24 million properties predicted to sell within the next year
  • Nearly 100,000 distressed properties that you can purchase at low prices

ProspectNow integrates easily into your existing tools. Even if you already have a customer relationship management (CRM) solution that you love, you can continue using that tool. You just get the added benefit of ProspectNow’s vast databases and predictive analytics.

Team Access Lets You Explore Nationwide Opportunities

ProspectNow has various accounts designed to meet your needs. As someone in the commercial real estate market, you should consider the Commercial Team Access account. It gives you access to:

  • Predictive analytics for likely sellers and refinances
  • A market segment analyzer that uses real data to focus on investment opportunities with strong potential
  • A nationwide property search that includes residential and commercial real estate
  • Corporate and real owner contact information

You also get a dedicated account manager who ensures you take advantage of every benefit ProspectNow’s databases, analytics, and other services offer.

A Return-On-Investment (ROI) Calculator That Gets Results

Not sure whether you should spend money on a ProspectNow account? The ROI Calculator can help you determine whether you would make more money by becoming a ProspectNow member. You get custom results by entering:

  • The state and county you plan to focus on
  • Your annual marketing budget
  • The number of deals you closed last year
  • The average amount of your closed deals from last year

The results will compare the status quo with the results ProspectNow users typically see.

For example, the average real estate investor in Jefferson County, Kentucky spending $4,000 per year on marketing to close five deals with an average price of $300,000 can expect sales turnovers to increase from 4.9 to 9.75 percent. Additionally, your marketing expenses would fall by nearly half while you double your number of closed deals. You could go from earning just $36,000 to more than $71,000 by harnessing the power of data through ProspectNow.

Request a Demo to See ProspectNow in Action

Start making informed decisions now by requesting a ProspectNow demo that lets you see how the real estate investment tool works. Once you see how you can get better results while spending less money, you will want to sign up for an account. Get your ProspectNow demo here so you can decide whether you want to join.

Pros and Cons of Using Direct Mail for Commercial Real Estate Prospecting

In real estate, we’re often given advice regarding finding our niche and using highly targeted keywords and marketing strategies. What this boils down to is the fact that localizing services is desirable for many agents. One of the best strategies is direct mail for commercial real estate. This is also known as direct response and it’s often best suited for local use. But when is this real estate marketing strategy best?

Pros of Direct Mail for Commercial Real Estate

Buyers and sellers alike seek local agents who specialize in local targeted markets, such as specific neighborhoods or zip codes. Direct mail allows these agents to reach out to prospects in these localized demographics. Some agents will slightly tweak their direct mail for commercial real estate as it’s targeting a specific type of buyer or seller in a specific neighborhood or zip code. It’s this targeted approach that makes this real estate marketing strategy work so well.

A lot of marketers think direct mail is nothing more than a marketing relic – but it still works for real estate. Why?

For one thing, everyone isn’t on social channels. And the older generations – those more likely to be involved in commercial real estate – trust the old-school style of marketing over digital marketing. In most cases, an upscale commercial sale isn’t going to happen over Facebook.

Cons of Direct Mail for Commercial Real Estate

You may or may not find commercial property owners with direct mail – it’s hit or miss. Some consumers sort their mail and actually look over each piece they receive – others view postcards and six-by-nines as junk mail and immediately file it in the trash bin. If your direct mail isn’t reaching your audience, it can become a rather costly strategy.

How You Can Use Direct Mail for Commercial Real Estate

Taking the pros and cons above into account, how can you develop a good direct mail marketing plan?

Take it for a test run

Before you fully commit to any strategy, test it out. This can help you discover your audience and their goals – and your own. Not to mention it’s much more cost-effective to test out different direct mail pieces. Sending your pieces out in bulk can be more cost-effective.

Define the audience and the overall goals of the marketing plan

This goes for any marketing strategy, especially real estate. If you’re unsure of your target audience, you can’t reach them. So, decide what you want to accomplish with your direct mail for a commercial real estate campaign.

Are you looking to reconnect with previous clients, obtain new prospects and leads, or simply raise awareness that you’re in the area and ready to help?

The answers to these questions will shape the design of your direct mail. When you uncover your exact audience, you can create a mail piece based on certain demographics. Depending on your budget, you can even create several different pieces to reach as much of your audience as possible.

Use a CTA

You might think of a CTA (call to action) as that clickable link in your digital marketing materials – you’re not wrong. But direct mail for commercial real estate also needs a direct CTA. Explain clearly what you’d like the recipient to do – email you, call you, or take a look at your website or social channels.

What to Do After You Send Your Direct Mail for Commercial Real Estate

Direct mail isn’t “send it and forget it”. Decide how you’ll track the results of your direct mail for a commercial real estate campaign. For instance, keep a log of those recipients who respond to your mail and always follow up.

Final Thoughts

As mentioned above – yes, direct mail is still a viable marketing strategy in commercial real estate. But the main goal is to get prospects to take a look at your presence online – your site, listings, and social channels. Every mailer should have all of your contact information:

  • Name
  • Phone number
  • Physical and mailing addresses
  • Email address
  • Website
  • All social channel handles

You can even incorporate scannable codes that offer discounts or augmented reality (AR) tours of homes or commercial properties you’re selling. There’s really no end to how you can make direct mail for commercial real estate work for you.

ProspectNow has been helping real estate agents like you since 2008. We offer everything you need for your agency’s success – and for much less than you’d pay elsewhere.

Partner with ProspectNow – you’ll get more leads and ultimately make more money!

 

8 Ways Commercial Real Estate Brokers Can Reduce Prospecting Time

Whether you’re new to Commercial Real Estate (CRE) or you’ve been at it for years, prospecting time for new clients never ends. Reaching out to old clients and kindling the spark of interest in new ones takes ongoing, active engagement and communication.

Learning the art of real estate prospecting is a rewarding activity – hands down, it’s the No. 1 lead generation method. But if you’re new to real estate, you might feel pressure to deliver results right away. Every lead generation method has one thing in common – they all take time. Most newbie agents and brokers find it difficult to dedicate prospecting time each day. Do you need to level up your CRE prospecting game?

Don’t wait for your phone to ring – use these eight strategies and initiate contact.

1. Use Data – Not Comfort – When Making Prospecting Time Decisions

Business professionals using historic data when making decisions nearly always come out on top. It’s no different in real estate prospecting. Always track your data. After examining your data from past connections, do you find certain strategies connect with your prospects better than others? For example, sending an email is easy. But if it doesn’t return results, it’s a waste of your valuable prospecting time. Leveraging the strategies that work – even if they’re not your favorite – can pay off big in the long run.

2. Set Weekly and Long-Term Goals

Prospecting doesn’t mean sitting and watching your phone. It means dialing the prospects that could soon turn into clients. It’s this activity, when you don’t see immediate results, that can feel as though you’re not making any progress. This is where goal setting comes in. Your weekly goals should be about work – your long-term goals about successful closes. In other words, set weekly goals for making a certain number of phone calls or sending a certain number of text messages.

3. Leverage Technology and Improve Your Efficiency

Not too long ago, CRE prospecting meant endless hours of grunt work gathering addresses and trying to find actual contact information. Thankfully, today there are several affordable software options that do all the work for you, like ProspectNow.

4. Attend Conferences – and Get Those Attendee Lists

Scope out commercial real estate conferences and attend as an exhibitor. Organizers usually put together attendee lists for exhibitors. You can normally obtain a partial list for free just for being an exhibitor. Organizers usually charge a fee if you want the whole list of conference attendees. Either way, you’ve got a list of warm leads who’ll likely remember you from the event.

5. Follow Other CRE Accounts and Hashtags on Your Social Channels

Prospecting isn’t a bunch of cold calling scripts, bulk mailers, and mass texts. Genuine prospecting is the starting and cultivation of relationships, ideally with those you might consider great buyers or sellers, whether they’re in the market now or they will be soon. There’s no better place for relationship building than on social media. Start noting popular CRE hashtags and see how they might fit with your agency. What advice can you offer to help those looking to buy or sell?

And remember, it doesn’t have to be all work and no play. Consider adding videos of your pets and their antics. Or post your thoughts about your favorite movies, books, or music artists. You can create real and lasting relationships by offering personal tidbits that connect on a deeper level.

6. Create Groups on Social Channels

Using the data you glean from the above tip, create groups on social media for your prospects. For instance, if you’re a broker in the New York area, consider a New York CRE group or New York Retail CRE. Prospecting on social media is popular but it isn’t easy. In fact, only about 10% of your followers actually see your posts. An even lesser percentage actually engages.

Now, this doesn’t mean you can’t prospect well on social. People enjoy joining groups. And if you make your groups private – where members must request admittance – they’ll feel part of something special. Plus, when you interact with your members on a one-to-one basis, it cultivates the relationship even deeper, slashes your prospecting time, and streamlines your business.

7. Build a Website or Lead Generating Landing Page

People feel more comfortable engaging with familiar people. What’s the best way to showcase what you do and who you are? Build or enhance your current website with a blog. Or create a landing page and request email addresses in exchange for access to newsletter subscriptions, CRE white papers, or industry news. Provide visitors something of value for visiting your site, such as buying and selling in your area, a list of current properties you’re showing, and various contact methods. You’ll find conversations become easier and conversion rates skyrocket when you can speak directly with your prospects.

8. Use ProspectNow

Commercial real estate prospecting software has come a long way since its inception. For instance, ProspectNow’s predictive algorithm identifies properties likely to go up for sale within the next year. ProspectNow developed this algorithm so it scans hundreds of data sets every week for properties that sold and then applies those characteristics to properties still sitting on the market.

Having access to this information can significantly cut your prospecting time in half.

We’ve been helping commercial real estate agents just like you for more than a decade. Ready to cut your prospecting time in half, find more leads, close more sales, and make more money? Contact ProspectNow to take your CRE game to the next level.

How to Find Commercial & Apartment Building Owners Likely to Sell

Knowing how to find commercial property or apartment building owners likely to sell soon can give you several advantages. By approaching property owners before they advertise their intentions to sell, you might find that you can negotiate a lower price without competition from other buyers. You could also benefit from taking over leasing contracts that the owners have with current tenants. 

Before you can reap the advantages of buying off-market properties, you need to know how to find properties before they get listed. The following tips will make it easier for you to target properties before owners put them on the market.

Look at Whether Property Owners Lose Tenants Often

2020 was a difficult year for many commercial property and apartment building owners. Pandemic precautions made it impossible for many retail stores to stay in business. As they closed, property owners lost steady streams of revenue. Even established stores like J. Crew, Brooks Brothers, and Stein Mart filed for bankruptcy.

Eviction moratoriums have helped people stay in their homes during an economic crisis. Unfortunately, the federal government has done the bare minimum to help the individuals and companies that rely on rent from tenants. Property owners could find that they lose billions of dollars by the end of the pandemic. It’s unclear how they will recoup that money—or if they will ever get reimbursed.

When you see a commercial property losing tenants, you know that the owner struggles with the lost revenues. The owner might want to sell the property to avoid ongoing challenges in the retail and restaurant industries.

It’s harder to tell whether apartment buildings are losing tenants or simply not getting paid. Assume that many of the property owners feel uncertain about the future.

Recommended reading: How to Find Off-Market Real Estate Gems

Identify Businesses Preparing to Expand

While many industries struggle to make ends meet, some companies have thrived over the last year. Sudden growth may have the property owners looking for other locations that can accommodate more employees, products, and customers.

Look for companies doing extremely well in the current market. Maybe real estate professionals will assume that those businesses feel comfortable staying where they are. Approaching them about the opportunity to expand could lead to a deal that benefits both parties.

Target Loan Holders Behind on Their Payments

As commercial property and apartment building owners lose money to tenants that go out of business or change locations, they often fall behind on their loan payments. It doesn’t take long before the owners enter a state of pre-foreclosure, the beginning phase of the foreclosure process during which the lender files legal documents.

Property owners don’t always lose their buildings after entering pre-foreclosure. Some of them use the opportunity to renegotiate loans. The lender wants to get repaid as much as possible without going through a prolonged legal battle. The lender will also need to find someone to purchase the repossessed property, which takes time.

While pre-foreclosure doesn’t always lead to foreclosure or repossession, it puts the owner in a perilous position. The threat of losing property through the foreclosure process creates a lot of anxiety. When owners lose their properties to lenders, they get nothing in return. Selling the real estate now makes it possible for them to earn some money so they can repay the loan in full and walk away from the deal with some profit.

Sifting through court documents to find properties entering pre-foreclosure or foreclosure isn’t appealing. You can, however, rely on databases that track public records. That way, you get quick, accurate information that helps you target people interested in selling their commercial properties or apartment buildings as soon as possible.

Recommended reading: How to Find Off-Market Properties That are Predicted to List

Pay Attention to Properties With Delinquent Taxes

Tax records are public documents that anyone can access. In most places, you can access property tax records by visiting the county tax assessor. Some counties have online databases that you can search. They don’t always update their records as often as you might like, though, so you can’t always trust the information that you find in these databases.

You’ll need some information to access property tax records. The county tax assessor’s office expects you to know the property’s address or lot number. Additional information could make the search easier, but you can usually find the tax documents you need with the property’s correct address.

If this sounds like a hassle, you’re correct. Even when you use a county’s online database, you often have to wait for slow servers to give you the information you need. Plus, you’ll always wonder whether you have 100% accurate data that helps you identify properties with delinquent taxes.

Again, you can use commercial property databases that track unpaid taxes, delinquencies, and liens. These databases usually update their information frequently to help real estate professionals connect with owners who want to sell their properties.

Reaching out to people struggling to pay their property taxes gives you a way to help them avoid fines while you get to purchase the real estate at a discount. Depending on how delinquent the taxes are, though, you may need to pay the back taxes before you can purchase the property. Keep that in mind as you reach an agreement with a current owner.

ProspectNow Can Help You Identify the Right Commercial and Apartment Buildings

ProspectNow makes it easy for you to find commercial and apartment building owners likely to sell. The commercial database tracks public records so you’ll know which owners might not have enough money to pay their loans or taxes.

ProspectNow also uses predictive analytics to determine which properties in an area will go on the market soon. Often, the predictive analytics feature lets you focus on properties before they go on sale. You can even get the property owner’s contact information.

ProspectNow has been helping agents just like you since 2008. Ready to find more leads, close more deals, and make more money? Schedule a demo of ProspectNow’s commercial database and its features. Get instant access to information about millions of properties.

ProspectNow Will Launch a Chainlink Node to Bring Premium Real-Estate Data to Blockchain Markets

ProspectNow and Chainlink Logos

We are pleased to announce that ProspectNow will be launching our own Chainlink node, making our premium real estate data available to developers and applications across leading blockchains. The Chainlink node serves as secure blockchain middleware, which gets our existing APIs compatible with various blockchain environments.

We will use the Chainlink node to supply and sell our data directly to development teams and communities running applications on leading blockchains (called smart contracts), as well as to cryptographically sign our data to provide integrity guarantees of it originating from the ProspectNow API.

Users will be able to call the ProspectNow Chainlink node to obtain predictive analytics about residential and commercial real estate markets, including aggregate property and square footage prices within different geographies.

Not only will this increase our exposure as a data provider by making our datasets accessible within new markets, but it will allow us to directly partake in the provisioning of new real-estate infrastructure.

Using our premium data, new blockchain-based applications are possible, such as derivatives contracts related to property valuations, real-estate NFTs as loan collateral that are valued according to square footage prices, or prediction markets based on future housing trends.

The ProspectNow Chainlink Node

The Chainlink Node: Our Gateway to Blockchain Markets

ProspectNow offers detailed information for every property on record in the United States, including over 100 million residential properties and 42 million commercial properties across all 50 states. We aggregate and clean real estate market data derived from a trusted network of public, private, and internal datasets. Our services include predictive analytics for residential and commercial properties, ultimately enhancing the abilities of lenders and real estate agents to make data-informed decisions.

Since blockchain offers a new way to tokenize real estate and automate processes around buying/selling, we noticed a need for comprehensive data that informs these new processes about the current and future state of the real estate market. 

However, blockchains are purposely disconnected from the external systems, meaning smart contracts have no built-in capabilities of accessing our API data. This lack of external connectivity, often called the oracle problem, requires the use of an additional piece of infrastructure known as a blockchain oracle to bring external API data into blockchain networks. 

 

Upon examination of various oracle solutions, we selected Chainlink as our go-to oracle solution because it is the most highly secure, hyper-reliable, and time-tested oracle infrastructure in the blockchain space, already securing billions of dollars in value for leading Decentralized Finance (DeFi) applications. A growing number of top decentralized applications and leading data providers are already using Chainlink to buy, sell, and transfer data between one another. 

 

As a data provider, some of the important features of the Chainlink Network include: 

 

  • Data Integrity — Our Chainlink node will cryptographically sign all data we supply on-chain to verify it’s origin, preventing man-in-the-middle attacks and making our data more reliable in automated processes.
  • Blockchain Agnostic — Our Chainlink node can be made compatible with any blockchain, serving a single gateway to sell data to any current or future blockchain.
  • Widely Adopted — Chainlink is the most widely used oracle network in the blockchain industry, providing access to a vast addressable market of potential data consumers.
  • Provably Secure —  Chainlink is thoroughly audited open-source software that already secures billions of dollars in value, showcasing its ability to trigger the automation of high-value smart contacts live in production.

 

We look forward to joining the Chainlink Network as a node operator and supporting the development of new decentralized, data-driven real estate markets that are more transparent, efficient, and globally accessible for all. 

 

“After researching the best way to provide our existing data to blockchain markets, we quickly recognized the Chainlink Network as being an industry standard for connecting traditional APIs to smart contract applications,” stated Steve Wayne, CEO of ProspectNow. “By launching a Chainlink node, we gain new capabilities around supplying cryptographically signed data directly to smart contract development teams across a variety of leading blockchain environments, both expanding our ability to generate revenue and supporting the creation of novel real estate markets.” 

 

About Chainlink

Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.

 

Chainlink is trusted by hundreds of organizations to deliver definitive truth via secure, reliable data feeds. To learn more, visit chain.link, subscribe to the Chainlink newsletter, and follow @chainlink on Twitter.

 

Docs | Discord | Reddit | YouTube | Telegram | Events | GitHub | Price Feeds | DeFi | VRF

 

About ProspectNow

Based on the belief that better data and insights can accelerate any business, ProspectNow is a set of powerful systems and tools for extracting value from massive amounts of real estate data through machine learning.

We build applications that combine the most complete property data archive in the industry with proprietary ranking algorithms that curate a comprehensive library of new opportunities based on your criteria.

ProspectNow is utilized by over 2000 companies across the United States for their real estate data needs.  Follow us on LinkedIn and Twitter!

Things CRE Brokers Should Know About Mobile Home Parks

Commercial real estate brokers love to focus on high-end properties with huge income potential. So you may be surprised to learn that mobile home parks, a sometimes belittled investment, offer you excellent income potential with few management demands. 

People have long put down “trailer parks” as an unsophisticated place to live, but that vision of this type of housing is outdated. Mobile home parks often contain modern, well-kept units with many amenities. Living in a manufactured home gives people flexibility and comfort. Also, many parks are tight-knit and safe communities that are excellent for family life. As a CRE broker, you should investigate this investment opportunity and present it to more of your clients or invest in one yourself. 

Reasons to Invest in Mobile Home Parks

Financial analysts agree that investing in mobile home parks can be an excellent choice. While you may decide to buy some units to rent, most of your investment potential is in lot development and rental. In that situation, you rent individual lots to mobile homeowners who place their own homes there. This process means your overhead remains low over the years.

If you decide to buy some homes, you’ll pay a reasonable price for each unit. The average cost of a mobile home is $55,000 for a single-wide and nearly $100,000 for a double-wide. The cost of the lots, of course, is far less. You will tap fewer financial resources to invest in a mobile home park than you would to invest in other types of housing. 

As a park owner, you will enjoy other benefits as well. Some of the biggest benefits are: 

Increased Demand

Middle and lower-income housing are in great demand right now as those groups are being financially squeezed. For many, manufactured homes are the answer to their housing needs, which promise to become more urgent in the coming year. Plus, the demand for lots stays constant since relatively few mobile home parks are built each year due to restrictive zoning practices in many communities. You will not be battling a glut of mobile home lots.

Low Turnover

Mobile home park tenants tend to stay put for years. In fact, many stay for 25 years or more. Since they generally own the actual home, your renters are satisfied to find a lot they like in a friendly home community. If they do decide to leave, they often sell their home to someone else who will stay in your park. The income stays steady over the long term.

Low Operating Expense 

Your operating expense for a mobile home park will be significantly less than for an apartment complex. In general, your operating expense will be 35 – 40% of your gross income, while it would be 50 – 60% of gross income for an apartment complex. If you need to raise the rent to maintain your profit margin, your renters will probably accept the increase without much complaint. They would rather pay $20 extra each month than spend thousands moving their mobile home. As long as you are a fair and responsible owner, your tenants will not leave you.

Accelerated Depreciation

You will also benefit from accelerated depreciation, which strengthens your tax position. You can claim much of your purchase price as capital improvements because you will be building roads, improving drainage, creating underground utilities, etc. The timeframe for this depreciation is 15 years instead of 39 years for other types of commercial real estate, another attractive investment benefit.

Reduced Maintenance

Your tenants are invested in keeping up their own units, so the grounds are your biggest maintenance expense. In most cases, you will care for the rather small common areas and maintain utility and plumbing systems. Your time and financial commitment will be limited, unlike the considerable efforts you make with apartment communities. 

Additional Considerations

Seasoned mobile home investors suggest that you practice due diligence before you buy. You need to consider what size park will work for you as well as what type of financing you should get and how much profit you can reasonably accept. Also, you should understand that banks have preferences when it comes to your investment.

Many banks want you to focus on land rental income versus buying homes and lots. Mobile homes do depreciate quickly, limiting your long-term income when you rent them. Rookies in this arena often place too much faith in home-owned income. They pay too much when they purchase the park, only to find their expenses soar in just a few years.

You do have the opportunity to enter this real estate investing niche now. However, sophisticated investors who have so far avoided mobile home parks are beginning to appreciate their income potential. Since the number of parks is limited, you cannot afford to wait too long.

Finding Mobile Home Park Investment Options

You can find these investment opportunities in several ways. One way is to use public listings or consult an agent. You could also research your local area and call individual park owners who may be looking to sell. Or, you could use ProspectNowDatabases, one of the most extensive platforms for commercial real estate.  

In fact, ProspectNow has been around for over a decade and offers expert help in locating lucrative mobile home park investment opportunities. You can use competing databases, but you will not get the breadth of data that ProspectNow offers. 

The success of real estate brokers depends on the quality of their data. Sign up now to get access to 40 million commercial real estate properties and 100 million residential ones. By using ProspectNow, you will close more deals and make more money. Get started on your property investments today!

The Steps to a Property Lien Search: Three to Know

Of all the different steps related to homeownership and property ownership, the property lien search is one of the lengthiest — and the most critical. Yet, a lot of real estate investors — especially first-time investors or those looking to become a new property owner — might not know exactly what this type of search does. It’s important to get the clarification you need from a property lien search before committing all of that money to an investment purchase.

A property lien search pokes through the history of a property to see any outstanding debts that could transfer over to a new owner. This is a critical part of the title search process, usually going along hand-in-hand with it. While the title search proves that the future owner has the right to purchase the property, the property lien search secures the future owner from any debts or taxes prior owners may leave them on the hook for.

So, what are the steps to take when performing a property search on a property? Let’s take a comprehensive look at them in this blog!

Decide if a Property Lien Search is Right For You

You need to decide if you really want to do the property lien search yourself. The due diligence for a property lien search can go back many years — decades, even, if the house or property is an older one. It involves picking through the public record, poring over federal tax records, exploring tax liens, and looking at just about every legal claim on the property. That’s a lot — and can make any amateur’s head spin.

Your alternative? Go to a title company or a real estate attorney to do a title search and property lien search. You may already have one for the title insurance on the property. Those groups of professionals have the training and experience necessary to get a property lien search done extremely quickly. That option might not be perfect for every real estate situation, but it can work for many.

Step 1: Investigate Your Local Lien Search Makeup

The first step in the process — if you do choose to do the property lien search yourself — is to figure out just how you’re going to do it! On most occasions, you’ll be able to find the information you need at the county recorder or county assessor’s office. Hopefully, there is also a record online of all the information you have to find to do the property lien search. Most local offices have their information online now, but there is a small handful that does not; in those cases, you’ll have to physically go to those offices to pull the documents you need. Try giving the county assessor or county recorder a call to have them walk you through some questions you may have.

You need to know two important terms before you go on to the next step: voluntary and involuntary liens. You need to know the difference to determine which ones you may have to pay!

  • A Voluntary lien is exactly what it sounds like — a debt that the owner knowingly takes on for the property. For houses, that’s generally your standard, everyday mortgage.
  • Involuntary liens, on the other hand, are debts placed on a property from another party. For example, tax liens (either state tax liens or federal tax liens) are common involuntary lien.

Step 2: Do the Property Lien Search

Once you figure out the property lien search format, it’s time to start looking! Find the property you’re looking to invest in and start examining all the data you need to sort through. Here’s what you need to look for:

  • Outstanding utility bills against the property
  • Code violations and permits with fees
  • Unpaid taxes, missing property taxes, and other tax liens not satisfied on the property

Those types of liens could transfer from the property’s title prior to the new property owner. In order to make sure you don’t end up owing any money, you need to make sure that all of those liens and debts get fulfilled.

Another important part of the property title search you need to know? A quick property lien search might only show all the recorded, voluntary liens detailed above. Depending on the state the property is in, some of those “involuntary liens” — everything from utility bills to city fees tacked on — might not get recorded. You’ll need to do an in-depth search of the municipal records to ensure that you don’t end up paying some more money in the future.

Step 3: Address Any Lien Issues

If you do find any outstanding liens on the property, you need to get them taken care of before closing on the property. If time is of the essence for the purchase of the property, you can just pay the lien yourself and get a lien release from the city or state government or the private property owner. For an outstanding lien on a house or other property, you can negotiate with the owner or the party to get that removed from their side.

How ProspectNow Can Help

Looking to get more clients to that point where everyone can start to look at liens on a property through a comprehensive lien search? If so, you need the data analysis that makes a difference — and that’s where the professionals at ProspectNow come in. In business for over a decade (since 2008), ProspectNow delivers the insights and data that can give real estate agents the edge they need to compete in a competitive marketplace. With ProspectNow, real estate brokers can close more deals and make more money — all at a fraction of the cost from other, competing platforms!

What Is a Good Cap Rate for Commercial Real Estate?

When evaluating commercial real estate, investors use several pieces of information to assess the property’s value and potential ROI. One of the most popular metrics is the cap rate. Let’s explore this commonly used figure. We’ll cover the calculation and how to determine if it is a good cap rate for commercial real estate

What Is a Cap Rate?

The capitalization rate, or cap rate, represents a snapshot of a property’s anticipated rate of return on investment. The cap rate is a ratio of a property’s net operating income (NOI) and its value. This rate indicates the property’s potential profitability and its relative risk as an investment.

Calculating the cap rate of a property is simple. But, determining whether or not a specific rate is “good” will depend on a number of factors, particularly the local market and an investor’s personal risk profile. Weighing all of these factors is essential in properly using the cap rate metric.

How Cap Rate is Calculated

The simplest, most commonly used formula is:

Cap Rate = Net Operating Income / Current Market Value

In this calculation, the NOI represents the annual income generated by the property, less the expenses incurred for operating the property. Deducted expenses include property taxes, insurance premiums, maintenance expenses, and other costs of property management and facility upkeep. For purposes of calculating the cap rate, disregard any mortgage or financing debt associated with the property.

Current market value comes from the present-day value of the commercial property according to prevailing market rates. Alternatively, some cap rate calculations use the property’s original or proposed purchase price.

To summarize, cap rate calculation involves the following steps:

  1. Calculate the property’s gross income. For example, for a multifamily property, the gross income might include the sum of all rent and other revenue sources, such as late fees, parking fees, and laundry facilities.
  2. Calculate the NOI. From the gross income, subtract all operating expenses. Do not include any debt payments, depreciation, or capital expenses.
  3. Determine the property’s value. The value could be the current assessed market value, proposed purchase price, or an estimated value based on the calculated average price of at least three comparable properties.
  4. Divide the NOI by the property’s value.
  5. Convert the ratio to a percentage by multiplying the result by 100. This is the cap rate.

It is important to note that though the calculation itself is rather simple. But, determining NOI to use in the calculation is not necessarily so straightforward. Different investors might use different allowances for vacancies, which impacts the gross income. Similarly, different investors might include different expenses — such as capital expenses — or make adjustments based on how they might manage the property differently. Some calculate the NOI based on prior year historical information, while some annualize the most recent three months or use the NOI calculated from a pro forma for the first year.

How Do Cap Rates Work?

The cap rate allows investors to assess an investment’s potential profitability and to more easily compare possible investments. Investors commonly use cap rates as a way to quickly compare the relative value of similar commercial real estate properties and their anticipated return on investment.

For example, two properties of similar condition and square footage both have a price of $20 million. One property generates $600,000 in NOI, while the other produces an NOI of $1.4 million. The first property is a 3% cap rate; the second property at a 7% cap rate.

Property owners can use the cap rate calculation in comparison with their market’s average cap rates to assess whether their property is underperforming or exceeding industry averages. Cap rates are also useful when considering the sale of an investment property.

Rearranging the basic formula can help determine the property’s fair market value: current market value equals NOI divided by cap rate. You can thus calculate your property’s current value using your building’s NOI and the average cap rate for your property type and geographical region.

What is a Good Cap Rate?

“Good” is a subjective assessment, of course. Whether a cap rate should be considered “good” depends on a variety of factors. These factors include location, the real estate asset class, asset type, deferred maintenance, occupancy, and the investor’s planned exit strategy. Since cap rates reflect the perceived risk, an investor’s particular risk profile factors into consideration of target cap rates as well.

Average cap rates vary by region and by asset type. For example, a Class A office building in downtown San Francisco, California, averages 4.25 to 5%, while the same asset class in downtown Tampa, Florida, averages 6.5 to 7%. An industrial building in San Francisco averages 3.75 to 4.25%, while one in Tampa averages 5 to 5.5%. Thus, a “good” cap rate in San Francisco probably won’t be so good in Tampa.

The cap rate, though useful in assessing property risk and potential profitability, should not be used alone. It should be used in combination with other metrics and considerations.

Try Prospect Now

ProspectNow’s property databases contain a wealth of information useful for calculating cap rates for commercial real estate. Whether you are researching market comps or looking for your next commercial real estate investment, you’ll find reliable data on the ProspectNow platform.

If you’re looking for a real estate tool to inform your investment decisions, ProspectNow has been in the business since 2008. ProspectNow’s platform will enable you to make smarter real estate decisions and move through every transaction with confidence.

Are Door-to-Door Sales Dead Post-COVID-19?

Technology has placed the world of marketing at your fingertips  with a few clicks, your next campaign is in the homes of your intended audience.

Unfortunately, even the most well-planned and executed campaigns fall short of your intentions because the market, in general, is so heavily saturated. People see ads on every device, so much so that many people inadvertently don’t even see them anymore. The marketing tactics that worked so well just a few years ago are no longer viable.

But just as certain clothing comes in and out of fashion, so too do certain marketing strategies. Remember the days of door-to-door salespeople knocking to see if your family wanted a set of encyclopedias or a vacuum? Of course. You remember because it worked so well. Door-to-door sales  when approached correctly  is still an efficient way to boost customer numbers and build lasting customer relationships. And it can be used to sell all types of products and services  including real estate.

What Are Door-to-Door Sales?

Going door-to-door is a time-tested method of direct selling. It’s basically a canvassing technique that sales and marketing professionals have used in the past to sell products and services in the homes of potential customers.

Door-to-door sales have various stages that resemble the modern sales funnel, such as:

  • Prospecting
  • Qualifying
  • Pitching
  • Closing
  • Follow-up

In real estate, brokers visit various homes or businesses in the hopes of landing an appointment with a decision-maker.

You’d think with a global pandemic that door-to-door sales would be off the table. After all, in 2020 no one could leave their homes, much less want strangers coming to their door.

But now, with cities and states relaxing guidelines, door-to-door is poised to become the great sales strategy it once was.

Why Are Door-to-Door Sales Effective Today?

With all the in-your-face ads that people see on their devices multiple times throughout the day, online marketing is like fishing in the dark and hoping you catch something edible. Some of the most important reasons door-to-door sales can still be effective include:

Increasing Competition

The market is simply saturated. You could have the best real estate marketing campaign and it could get lost in all the ad noise from your competitors.

But door-to-door offers you the opportunity to carve out a niche in an otherwise crowded space by getting to contact potential prospects face-to-face.

People Have Become Ad-Blind

With the market saturation and non-stop ads people see each day, marketing desensitization is at an all-time high. Plus, many consumers have ad-blockers installed on their devices. Maybe they didn’t respond to your other outreach efforts, and it may have nothing to do with you  remember the noise mentioned above? Not to mention, the past year or so hasn’t been easy for anyone. As localities begin opening up again, going door-to-door with a message about your services lets you provide your message clearly and correctly. It could influence potential buyers and sellers to use your agency when the time is right.

Easier to Pivot

Traditional marketing costs you  in research, PR, airtime, and more. Alternatively, going door-to-door costs much less. It also allows for faster message delivery directly to your audience. And if you need to make a change to your strategy you can quickly shift messaging.

Adds a Personal Touch

Traditional online marketing lets you reach thousands of consumers, but even with all the targeting in the world, it’s still a general message. Knocking on doors lets you speak directly to the prospect personally. You can ask questions, and the prospect can, too. You can analyze on-the-spot reactions and adjust your tactics going forward.

Reaching out on a personal level, still shows you’re willing to put in the time investment to get to know your community better. Plus, the prospects you contact will remember you. If you can address their concerns in a trustworthy manner, it’s more valuable than any impersonal, online message.

Gets Your Name out There

There are only a handful of times in consumers’ lives when they’ll need the services of a real estate agency. When the need arises, they probably don’t have much time  or don’t want to spend much time  leafing through all the potential agencies they could work with. They may be unaware of your brokerage. Reaching out to prospects at their homes lets them know you exist, and that you’re a member of their community. Additionally, as mentioned above, if you answer their questions quickly and honestly, they’ll trust you and look to work with you when they need to buy or sell a home or commercial property.

You Can Measure Success

Those blanket ads you throw on Facebook or Google can’t be completely tracked. Sure, you can take a look at your site’s bounce rate, but it doesn’t tell you much about what brought the visitor to your site  or why they left. Door-to-door lets you measure the success of your outreach, in real-time, which lets you calculate your ROI and make changes when and where necessary.

How to Succeed at Door-to-Door for Real Estate Agencies

Pull out your best jeans and sneakers and dress comfortably. Aside from your outfit, to succeed at door-to-door for real estate agencies, you should:

  • Know your market inside and out: You should share the benefits of partnering with your agency, know how to counter objections, and answer questions quickly. To do this, though, you have to know your local real estate market in depth.
  • Offer real value to the prospect: Google is only a click away for prospects. Today’s consumer is educated. You must come prepared with information that they can’t easily find. This helps illustrate why partnering with your agency would be a valuable decision.
  • Ask the right questions: Get to know your prospect’s pain points by asking open- and close-ended questions. This helps you establish the prospect’s needs.
  • Be a fantastic listener: Asking questions is great! But you have to know when to stop talking and allow the prospect to answer. Otherwise, you risk losing the opportunity to discover what they need and why they haven’t found it yet.

Partner with ProspectNow

ProspectNow is the perfect way to put together your door-to-door prospecting list. In fact, we’ve been helping agents and brokers just like you since 2008 find properties with a high likelihood to be listed in the near future. If you’re ready to find more leads, close more deals, and make more money, reach out to us today.