Everything You Need to Know About the Triple Net Lease

Triple net lease is a word tossed around a lot these days, by commercial real estate (CRE) professionals. If you’ve never heard the term—don’t worry. We’re going to take you through the ins and outs of triple net leases—also known as NNN leases—below.

What’s a Triple Net Lease?

There are various lease types in commercial real estate. For instance:

For this article, we’ll just cover triple net leases. Triple net leases are leases in which the tenant pays the operating expenses of the building for the duration of their lease, on top of the monthly rent payment. These types of lease agreements typically occur in a one-tenant building. A gross lease is a type of triple net lease in which all building-related expenses get bundled in one flat, base rent amount by the building’s single tenant.

Expenses incurred in a triple net lease include:

  • Rent
  • Utilities
  • Taxes
  • Maintenance
  • Insurance

Triple net lease agreements are considered turnkey investments because the landlord/building owner isn’t responsible for these expenses. Contrary to what you might think, having a tenant take over the responsibilities of operational expenses is not just beneficial for the building owner—it’s actually a good thing for the tenant, too.

What You Should Know About a Triple Net Lease

People often throw around the term triple net lease when what they’re really thinking about is an absolute net lease. But labeling a lease as triple net, or NNN, doesn’t necessarily mean it’s an absolute net. For instance, a brand new building’s tenant might be responsible for replacing a roof or heating and cooling system as they wear out.

But if the building is older, it might have the triple net label applied when the property owner’s actually responsible for these expenses as the systems wear out.

A triple net lease is complex and multifaceted. The only real way to know every detail of its terms and conditions is to read every word. Simply labeling a standard lease triple net could actually conflict with the lease’s actual terms.

What Does a Triple Net Lease Include?

A tenant renting with a triple net lease is responsible for most of the property’s expenses. This includes such items as:

  • Property tax
  • Maintenance
  • Insurance
  • Rent

Because the tenant handles so many expenses on top of rent, their rent will often be lower than if they had leased a different way.

What is Not Included in a Triple Net Lease?

Depending on the wording of the lease, even an actual absolute net lease doesn’t cover every single expense that comes with a property. For instance, a tenant holding an absolute net lease doesn’t cover accounting or legal fees for the property owner, except in very rare cases; even though these costs are considered minor. That said, these rules can differ greatly between landlords and lease companies.

Real Estate Investment Benefits of a Triple Net Lease

Triple net leases are particularly advantageous for property owners. Landlords typically favor this structure for several reasons, which include:

  • Revenue streams are more predictable
  • Less management and oversight of maintenance issues
  • Lower investment cost compared with multitenant buildings
  • Better financing options based on asset value and tenant’s credit history

Basically, investors benefit more from a triple net lease property because of stable revenue, and low time and resource investment.

Investment Risks of a Triple Net Lease

While they sound great on paper, this type of lease agreement doesn’t mean there is no risk at all.

Tenant creditworthiness

Most triple net leases are for one-tenant properties, meaning the success of the project rests on the creditworthiness of the tenant.

You wouldn’t doubt the credit strength of a strong, publicly traded single-tenant investment with a tenant like Walmart, for instance. But what if this tenant falls out of consumer favor during the lease term and goes bankrupt? The thing about a one-tenant, triple net property is this:

It’s either occupied or it’s vacant.

You should weigh even the slightest risk when entering into a triple net lease.

Re-leasing

Most investment properties of this type get sold near the end of a lease. Triple net lease investments do this to shift re-leasing risk of potential rollover to a new owner. That said, most triple net leases are long term.

How to Assess Tenant Creditworthiness

A lease’s strength lies in that of its tenant’s credit history. You must analyze the financial statements of a potential tenant to understand your risk.

Most one-tenant triple net leases involve strong, popular companies that are usually publicly traded on a stock exchange. In this case, it’s easy to look into the company’s financial statements, business ratings, and other important information, like bond issue statements and stock reports from professional analysts.

For a privately held company, however, a thorough analysis is a bit trickier. It’s a good idea to brush up on your knowledge of financial statements and market trends, so you can understand exactly what’s at stake when weighing a triple net lease. Commercial real estate involves some hefty decision-making skills, but analyzing risks and taking the time to mitigate them keeps you informed and your investments worthwhile.

Finding Investment Properties for Triple Net Leases

Are you looking for commercial property investments? Owning assets with a commercial lease can be lucrative and there are many ways you can go about finding them. ProspectNow’s commercial real estate property database lets you see what’s listed on the market no matter where you’re looking to invest.

ProspectNow has been helping agents, brokers, and investors like you uncover new leads and properties since 2008. If you want to take your investment game to the next level, scour our databases. We offer this information for much less money than our competitors. Are you ready to find more leads, close more sales, and make more money? Check out ProspectNow today.

 

How to Create a Broker Price Opinion (BPO) in CRE

Nearly everyone has heard the term real estate appraisal, which is a property value assessment that takes a property’s condition, location, and other relevant factors into account. Appraisals are useful for sellers, so they know how much to ask for a property, and for buyers, so they know if they’re getting a good deal in comparison with other properties of the type in that area. A broker price opinion, or BPO, isn’t much different — it’s basically an appraisal of a property’s purchase price but from an actual commercial real estate (CRE) broker.

Here you’ll learn what a BPO is in commercial real estate, how it’s prepared, and how you can use information from ProspectNow to create one. If you’ve never created a BPO, the National Association of Broker Price Opinion Professionals (NABPOP) offers training for every real estate professional.

What is a Broker Price Opinion in CRE?

A broker price opinion in commercial real estate, also known as a broker opinion of value, is used to estimate the value of a certain commercial property. There are two main types of BPOs:

  • Drive-by BPO—An analysis of a property based on exterior criteria, location, and other factors without viewing the interior.
  • Internal BPO—A more in-depth BPO that covers the same criteria as a drive-by BPO, but that also carefully examines the interior of a commercial property.

CRE professionals, such as brokers, lenders, real estate attorneys, investors, and even certified public accountants (CPAs) use BPOs in determining how much a property is worth, whether to sell or buy a property and for how much.

BPOs can be simple, one- or two-page documents or detailed enough to warrant 40 or 50 pages. It all depends on why the BPO’s being created, the property that’s being analyzed, and the client’s requirements.

Overview of a Commercial Real Estate BPO

There are several steps in creating a BPO for commercial real estate. A top-level overview of commercial real estate BPO creation includes:

  1. Broker and owner tour the property.
  2. Broker gathers data about the property, location, and overall market for this specific property type and analyzes such things as revenue versus expenses, taxes, and any pertinent zoning laws and environmental data.
  3. Broker then creates two documents: an income capitalization analysis and cost of replacement analysis.

7 Steps to Creating a BPO in Commercial Real Estate

Let’s further break this down into the actual steps required to create a BPO:

1) Choosing the right form

There’s a specific format for a broker price opinion. You’ll get the BPO form from either the client’s lender or the mortgage company. It doesn’t matter if this will be a drive-by BPO or an internal BPO – the same form is used. But creating the BPO must be done on these forms for legal reasons. If these forms aren’t completed, the BPO isn’t legally recognized. The form also helps ensure you don’t miss anything.

As you progress through the BPO form, you’ll record the requested information in each appropriate box.

2) Deciding on the age/style of the CRE property

Every commercial property is distinctive and falls within a specific category known to the real estate industry. For instance, in residential properties, the term ‘ranch’ refers to properties with only one floor and no attic space. In commercial real estate, the wording used might be terms such as ‘single-tenant’, ‘multi-tenant’, or ‘zone-specific’.

Record how many rooms or offices are within the building. If this is a drive-by BPO, you can estimate this number. You’ll also estimate the age of the building and record that as well.

3) Take pictures

For drive-by BPOs, you must take at least two pictures of the property’s exterior. You can take more if you like, but two is the legally required number.

For internal BPOs, you’ll take pictures of the exterior and each interior room. If there is any damage to the property, photograph that as well.

All BPOS, regardless of type, must have notes regarding visual appearance, damages, cleanliness, and other noticeable conditions. Internal BPOs must have notes on each specific room’s condition.

Finally, note such things as normal wear and if there are any flaws in architecture.

4) Take measurements

Note each room’s measurements and the property’s total square footage. Unattached buildings must have measurements and square footage noted separately. Drive-by broker price opinions can include estimated measurements.

5) Note any repairs or maintenance required

This is only necessary for an internal BPO. Take note if it needs any of the following repairs:

  • Structural damages
  • Damaged or dirty flooring
  • Broken windows
  • Peeling paint or wallpaper

You’ll also note other issues, such as snow removal, lawn maintenance, or trash removal.

6) Conduct property and market comparison

A comparative market analysis (CMA) is required because any BPO is only the opinion of the licensed real estate broker or agent. You must review current markets for at least three commercial properties that are:

  • The same size
  • The same age
  • The same style

You’ll also compare commercial properties along the same street and within the same neighborhood. In comparing these properties, you’ll come up with the FMV, or fair market value, of the property in question.

7) Finish the BPO forms

After you’ve input all the above data into the broker price opinion forms, sign the documents. Send these documents, along with the pictures you took, to the lender or mortgage company. They will then either authorize or invalidate the BPO.

It’s less expensive for lenders to have a broker or BPO company complete a BPO, but a broker price opinion is almost as comprehensive as an appraisal.

Use ProspectNow for Your BPO Research

ProspectNow’s complete commercial real estate database has the information you can leverage to create appraisal-quality BPOs fast and easy. We provide the following robust data on properties in every market:

  • Owner information
  • Sales history
  • Lot size
  • Asset type
  • Tax history
  • List price
  • And more!

And we offer our data for much less than our competitors.

ProspectNow has been helping broker price opinion professionals and real estate agents just like you, find the information they need for their real estate business since 2008. If you’re ready to find more leads, close more deals, and make more money, contact ProspectNow for a free trial today.

Is Commercial Real Estate in Trouble Due to COVID-19?

Is commercial real estate in trouble? When state governments started closing their economies during March 2020, people hoped that the disruption would only last a few weeks. Continued outbreaks made it obvious that businesses faced serious concerns that could last more than a year. Many of them worried about whether they could survive the pandemic. In fact, many of them did not. For some, that makes now the perfect time to invest in real estate.

COVID-19 Has Destroyed Much of the Service Industry

COVID-19’s impact on commercial real estate prices looks straightforward at first—it destroyed restaurants and retail stores, taking commercial real estate prices with them. Yelp says that about 163,000 of the businesses listed on its site went out of business. About 98,000 of them will not return even after the pandemic ends. Restaurants account for most of the closures.

Considering that the restaurant industry employs approximately 15.6 million people, closing businesses also means an increase in unemployment. When businesses in the service industry shutter their doors, the effects ripple through the whole economy.

Failing Business Drags Down Commercial Real Estate Prices

COVID’s impact on commercial real estate prices should alarm you if you currently own property. More likely than not, some of your tenants have gone out of business. To make matters worse, few entrepreneurs want to risk opening new businesses during a pandemic. With fewer people competing for space, commercial property market trends have almost certainly cost you money over the last year.

Make no mistake, COVID-19 will devastate commercial property trends in some areas. Some analysts predict that the value of retail space will not return to its pre-COVID price until 2024. Offices and apartments should return to their pre-COVID values by the beginning of 2022. Industrial real estate prices have actually risen during the pandemic, a trend that will likely continue for at least the next five years.

The commercial real estate forecast for 2021 doesn’t look better than the situation that started in 2020. Property values may actually fall further before they increase. Expect tough times to continue for anyone holding commercial property.

Lower Commercial Real Estate Prices Create Opportunities for Investors

Every downturn that hurts someone creates an opportunity for someone else. The real estate industry shares some similarities with the stock market. A good commercial real estate investment comes at a low price. The less you spend on the property, the more you can earn by developing, leasing, or selling it. It’s a harsh way to view the world, but it’s also an economic reality that investors ignore at their peril.

As COVID-19 real estate prices fall, look for real estate investment opportunities. It makes sense to buy properties when the current owners feel desperate to sell. As long as you can afford to hold on to the property without using it to generate income, buying commercial real estate now makes a lot of sense.

You don’t necessarily have to purchase real estate with cash to take advantage of COVID-19 real estate trends. Many banks also feel somewhat desperate to make money from commercial loans. With fewer people starting businesses, banks are eager to lend to anyone with a solid financial profile. Commercial loan rates will probably fall before they rise.

Commercial real estate loans usually have interest rates between 5% and 9%. If you can convince a lender that you can afford to make payments during the economic downturn—essentially meaning that you can afford to make payments without earning money from the property—you should find that banks will give you the lowest possible rates to help you buy real estate.

Some Cities Offer More Opportunities Than Others

You cannot look at the commercial real estate industry as a whole. It has pockets of success and failure. A city that struggles through the pandemic has a good chance of rebuilding its economy through 2021 and 2022. As that happens, you can attract tenants and charge higher rent for your commercial spaces.

Unfortunately, some towns will not survive. As their retail centers and restaurants close one by one, people will leave the area to find work elsewhere. If that happens, a town’s economy could collapse. Every investment opportunity comes with a risk. This is the risk of investing in commercial real estate during the COVID-19 pandemic. Choosing the wrong location could mean that you lose everything you invested in the property.

Use Predictive Analytics to Focus on Successful Investment Opportunities

So, is commercial real estate in trouble? Every investor needs to look at the current real estate market with clear eyes. There are opportunities and challenges. Knowing how to tell the difference will determine who makes money from commercial real estate trends.

Predictive analytics can help you make informed choices. With predictive analytics, you can focus on properties expected to go on the market soon. You don’t have to wait for the owner to advertise the sale. Instead, you can target off-market properties to get the best price.

Many owners don’t want to go through the arduous process of courting offers from potential buyers. They just want to recoup some money and stop losing revenue. Buying from them helps you make more money and protects them from losing money. The seller may not enjoy letting go of the property, but it’s a financial win-win.

Join ProspectNow to Keep Up With Emerging Trends in Commercial Real Estate

ProspectNow gives you the easiest way to keep up with emerging commercial property trends and target properties that fit your portfolio. As a member, you can search a database that includes 40 million apartment and commercial properties. You can even narrow your search by filtering for property characteristics, properties in pre-foreclosure, and real estate that owners likely want to sell.

Buying real estate during COVID-19 means that you have to accept more risk. It also means that you could make a lot of money. Get started with ProspectNow so you can stack the odds in your favor. The data you can find on our site is much more expensive on competitor sites. We’ve been helping agents, brokers, and others just like you since 2008 find more leads, close more deals, and make more money.

 

4 Commercial Real Estate Technology Trends to Watch in 2021

 

The COVID-19 pandemic forced almost every sector to reinvent itself. The commercial real estate sector is no different. Historically, the real estate industry is not the quickest to adopt new technology. However, lockdowns forced employees to work remotely, which meant greater adoption of digital tools. The accelerated shift to digital, aided by the growth of tech-focused startups in the space, will probably push companies to leverage data for better efficiency. Here are 4 key commercial real estate trends that will shape the industry in 2021. 

1. Robotic process automation (RPA) for more efficiency 

Digital transformation lies at the forefront of technology trends in the commercial real estate sector. The shift has been coming for some time, especially with new tech-focused players entering the market. However, the COVID-19 pandemic has accelerated the trend towards making processes more efficient and less labor-intensive. 

A remote workforce and a dip in demand are two factors that are contributing to this acceleration in digital adoption. We expect more real estate management companies to adopt robotic process automation (RPA) in 2021

What is RPA?

It is the use of software, or bots, to automate routine clerical tasks that do not involve high-level decision making. For example, standardizing contracts and liaising between multiple vendors for signatures and approvals. Data collection on buyers and sellers, data maintenance, and data compliance reporting are other common examples of clerical tasks that can be automated with the help of bots. 

How is RPA useful?

There are three key advantages of RPA in the commercial real estate (CRE) sector:

  • It is more cost-efficient. Companies that have adopted RPA have seen a reduction in their operational costs by 10 to 40 percent
  • RPA frees up employees for higher-value tasks, such as directly engaging with prospective buyers and sellers. This increases the chances of more deal-closures, hence directly contributing to a company’s revenue. 
  • It substantially lowers the risk of human error, making data more reliable. In turns, it makes data compliance easier.   

2. Predictive analytics for better decision-making 

The commercial real estate industry sits on a treasure trove of data. This data, when mined efficiently, can offer important insights into sales trends, demographic trends, and buying and selling forecasts. In 2020, data centralization, a key requirement for effective data analytics, accounted for 40% of all tech investment in commercial real estate. The number will increase in 2021 as real estate management companies cut risks and find better market opportunities. 

What is predictive analytics?

It is the science of using historical data to predict future outcomes. For example, a commercial tenant’s financial reports can tell a broker if the firm will renew the lease or not. ProspectNow uses predictive analytics to help brokers identify off-market properties that are predicted to sell. 

How is predictive analytics useful?

There are several use-cases of predictive analytics in commercial real estate, such as:

  • Identifying the right time to invest 
  • Predicting return on investment
  • Identifying commercial real estate markets that hold potential for future growth
  • Allowing brokers to pitch the best retail spots to companies based on consumer behavior. 

3. Virtual tours in a socially distanced world 

The COVID-19 pandemic in 2020 forced governments around the world to implement social distancing regulations. As a socially distanced lifestyle becomes the new normal, the trend of virtual property tours is likely to be on the rise in 2021. The pandemic has also forced the older generation to come to grips with technology. As the baby-boomers become more comfortable with digital interactions, augmented reality will become more commonplace in the real estate market. 

What are virtual tours?

Several platforms, such as EyeSpy 360, allow brokers to create virtual tours of properties that prospective buyers can watch on their devices. 

How are virtual tours useful?

Given that the threat of COVID-19 is still very real, virtual tours limit the risk of infection. It also makes the real estate market safer for agents, particularly female brokers. According to a 2018 report by the National Association of Realtors, over 40% female brokers feared for their safety or the safety of their personal information. 

The virtual tours space, itself, is likely to evolve, thanks to startups such as Guided Virtual Tours. The company gives a tour of properties just like an actual agent, unlike traditional virtual tour platforms where users have to click at different points to travel through the property.   

4. Cloud for scalable digital experiences

As the COVID-19 pandemic hit, companies quickly moved to online channels to engage workforce and tenants. However, over 50% CRE companies that took part in a 2021 CRE survey said they lack digital capabilities to fully utilize tools and data at their disposal. A majority agreed digital tenant experience is important for their company’s growth and revenues. 

As companies try to minimize costs to deal with an economic downturn, cloud technology could see an increased adoption rate among CRE companies. 

What are digital tenant experiences?

Digital payments and predictive insights into consumer behavior for tenants, are two primary examples of digital tenant experiences. An AI-enabled chatbot that helps commercial tenants with common queries could be another example of a digital tenant experience. 

How is cloud technology helpful in enhancing digital tenant experiences?

Cloud technology offers a scalable, more cost-effective method to enhance digital capabilities. Companies don’t need to invest in servers or an extensive IT team to offer digital solutions to clients. Cloud also eases collaborative processes, making it easier for a remote workforce to share data and insights. People have become more receptive to telecommuting, thanks to the pandemic which means there is a greater likelihood of more CRE companies including cloud solutions in their digital repertoire. 

Use Data to Close More Deals

In an uncertain economic environment, it is prudent to minimize risks. Thanks to modern technology, you can use data to identify lucrative buying opportunities. ProspectNow gives you predictive insights into properties that are most likely to sell, and accurate information on owners. Get a leg-up over your competition. Try ProspectNow for free

4 Green Building Certifications That Make Properties More Appealing

Green building concepts usually focus on making residential, industrial, and commercial buildings more efficient. Green building certifications often identify a broad range of issues that contribute to reducing the negative impact that buildings have on the environment. According to the World Green Building Council, some of the most important features that make a building “green” include:

  • Using water and energy efficiently.
  • Relying on renewable energy.
  • Improving indoor air quality.
  • Using non-toxic, ethically sourced materials.
  • Reducing pollution and waste.

Developers can satisfy these needs in several ways. The best approach often depends on the location. It makes sense for a building in Los Angeles to generate energy from on-site solar panels because the city has about 284 sunny days per year. Seattle, however, only gets about 152 days of sun on average, so solar panels may not contribute as much to meeting the qualifications of a green building certification. Instead, developers may want to build thicker walls that reduce energy consumption by retaining heat.

Why Green Building Certifications Make Properties Appealing

As a real estate professional, you might want to take some time to learn about the benefits of green building certifications. The more you know, the better you can use certifications to make properties more attractive. You may also find that encouraging clients to seek green building certifications helps them sell their properties faster at higher prices.

Better Efficiency Leads to Long-Term Savings

Buildings that qualify for green building certifications typically have efficient systems that help owners save money over time. It might cost a little more to purchase the property, but the savings accumulate over years and decades.

Energy prices vary significantly across the country. In Oklahoma, electricity costs about 7.86 cents per kWh. Alaska residents can expect to spend over 20 cents per kWh.

Regardless of your local energy prices, you can expect to save money by using more efficient buildings. If an owner can lower energy expenses by 25%, those savings add up year after year. Lower energy expenses will also help attract renters responsible for paying for utilities.

Ensure Compliance With Future Regulations

No one knows exactly how building, energy, and water regulations will change over the next few decades. Most people expect that state governments will pass stricter regulations. Some buildings might not have to follow new rules. Others will have to conform to updated expectations.

If you can qualify for green building certifications now, you don’t have to worry as much about future regulations. More likely than not, you already exceed them. As a real estate broker, you can use this point to convince buyers to choose more efficient properties.

Efficient Buildings Create Less Pollution

The International Energy Agency reports that 39% of the planet’s energy-related carbon emissions are connected to buildings. Most of that energy goes to heating, cooling, and lighting indoor spaces. Many people don’t think about the effects of harvesting and transporting the materials needed to construct buildings. Regardless, materials account for about 11% of a building’s overall carbon emissions.

Buildings contribute to emissions other than carbon dioxide, but the greenhouse gas stands out for its notorious effect on global climate change. Carbon dioxide accounts for 76% of global greenhouse gas emissions.

When developers follow guidelines to meet green building certification requirements, they must take steps to reduce the amount of carbon dioxide emissions they cause. Some experts believe that better efficiency and a cleaner power grid could reduce energy-related building emissions by nearly 80% by 2050. The result would make air cleaner for people to breathe and slow the progress of climate change.

Consumers Want to Support Eco-Friendly Brands

Some businesses dismiss green building initiatives because they think meeting requirements will cost too much money. Even the most profit-driven corporation, however, can benefit from green building certifications.

Today’s consumers prefer businesses that take corporate responsibility seriously. In a 208 study, 60% of respondents said that they want to support businesses committed to improving the environment by doing things like reducing plastic, using less energy, and cutting emissions.

If you have a client looking to purchase commercial or industrial space, you can position green buildings as a way to build a brand that attracts customers willing to spend more money on companies that support a healthy planet.

The Top 4 Green Building Certifications in the U.S.

#1: LEED (Leadership in Energy and Environmental Design)

The U.S. Green Building Council has several green building certifications that builders and owners can receive when they meet certain standards. Communities, cities, and neighborhood developments can also apply for LEED green building certifications. Some of the most popular certifications include:

  • Building Design and Construction (BD+C)
  • Interior Design and Construction (ID+C)
  • Building Operations and Maintenance (O+M)
  • Neighborhood Development (ND)
  • LEED Zero

Ideally, projects begin by selecting a LEED rating system, understanding the minimum requirements, and developing the building to meet certification requirements. Developers need to consider that LEED certification goes beyond construction requirements. The green building certification also looks at policies regarding energy, purchasing, waste, and site management. Meeting the certification requirements after completing construction doesn’t ensure that the building will keep its LEED green building certification. In fact, all projects must recertify at least once every five years.

According to the U.S. Green Building Council, applicants should take the following steps:

  1. Choose a LEED rating system.
  2. Check the minimum program requirements.
  3. Define the LEED project scope.
  4. Develop a LEED scorecard.
  5. Assign roles and responsibilities for people involved in the application and documentation process.
  6. Set a performance period during which the building gets tested for LEED credits.
  7. Performance a quality assurance review.
  8. Submit for LEED certification.

Visit LEED Online to create an account and manage your application process.

Earn Higher LEED Certifications

The U.S. Green Building Council uses a scorecard to determine how well buildings and policies align with their objectives. Scoring 40 to 49 points will earn you a LEED certification. Higher levels of certifications include:

  • Silver (50 to 59 points)
  • Gold (60 to 79 points)
  • Platinum (80+ points)

The more advanced your certification is, the more appealing your building will look to potential tenants and buyers.

#2: ENERGY STAR

Most people know ENERGY STAR as a government program managed by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE) that identifies energy-efficient appliances. The program also has one of the most affordable green building certification programs in the country.

ENERGY STAR reports that its certified buildings use 35% less energy than similar properties around the U.S. Getting certified also means that you can lease space to the federal government.

Technically, you don’t have to pay for your ENERGY STAR green building certification. You will, however, end up spending some money getting your building inspected. You might also have to pay for upgrades to get an ENERGY STAR rating of 75 or higher on a 100-point scale, which you need for certification.

#3: National Green Building Standard (NGBS)

The National Green Building Standard has four levels of green building certification:

  • NGBS Bronze
  • NGBS Silver
  • NGBS Gold
  • NGBS Emerald

NGBS Emerald homes meet exceptional standards in energy efficiency, water efficiency, indoor environmental quality, and other metrics.

NGBS certifications only apply to residential buildings. To get certified, you can contact a specialist at an organization like Home Innovation Research Labs. While NGBS sets standards, it does not perform certification reviews.

#4: Green Globes

The Green Building Initiative (GBI) issues Green Globes to buildings that score 35% or higher on its 1,000-point system. The more Green Globes a building earns, the less of a negative impact it has on the health of humans and the planet.

Currently, GBI awards up to four Green Globes:

  • One Green Globe (35-54%)
  • Two Green Globes (55-69%)
  • Three Green Globes (70-84%)
  • Four Green Globes (85-100%)

Only buildings that show world-class leadership qualify for four Green Globes. Like inspectors working with most green building certification programs, professionals look at factors like energy efficiency, water use, emissions, and indoor air quality. Each assessment acknowledges areas where the property excels while providing feedback for potential improvements.

Green Globes pricing varies depending on your property and the assessor services you need. At the very least, owners will spend $1,500. Interested parties should submit a request quote form to get a more accurate price estimate.

ProspectNow Helps You Target Green Building Owners and Buyers

Knowing whether properties have green building certifications can help you match them to buyers who take the environment, efficiency, and health seriously. Before you can make these connections, you need a database that tells you about properties and potential buyers.

ProspectNow has in-depth residential and commercial databases that you can use to pair buyers with green buildings for sale. Schedule a demo to see how ProspectNow can help you save time while finalizing more deals.

 

How Much Do Commercial Real Estate Agents Make?

A commercial real estate agent’s pay is different from most other jobs. There’s no salary involved most of the time, but agents instead work solely on commission. This means that while there’s no real cap to what an agent can make in a year, their livelihood depends directly on their ability to close deals. It can be a recipe for a “feast or famine” lifestyle. 

The good news is, commercial properties can close for millions of dollars. And big sales mean big commissions. Read on to learn the answer to the question ” how much do commercial real estate agents make?” and how they can maximize their earnings by using ProspectNow.

How Much Do Commercial Real Estate Agents Make in Commission?

There are two ways to earn commission as a commercial real estate agent: property sales and lease transactions. The commission will also vary widely depending on the value of the property, agreed-upon rate, brokerage split, and the number of agents involved.

But if you’re looking for a ballpark estimate of what you can expect to make, here are some statistics:

  • Agents who specialized in commercial properties made an average of $73,839 in 2019.
  • That’s substantially higher than the average residential real estate agent’s income ($52,395)
  • And nearly three times the average income of agents who don’t have a specialty at all. ($26,992)

But don’t expect to get your money all at once. Upon a property sale or lease transaction, commission is paid to a real estate broker first. It’s then the broker’s job to pay the agent, with their share of the commission taken out.

The first step in a transaction will be to agree upon a commission rate. Typically, it’s a percentage of the sale price, and this percentage tends to go down as property value goes up. For example, a property listed for less than a million can go for 6 to 8 percent commission, but a property listing for 20 million will have a 1 percent commission or less. But the good news is, the latter still means a check for up to $200 thousand dollars could be coming your way!

When it comes to leasing agreements, the commission is based on the total value of the lease. This commission is usually still paid in a lump sum, due when the lease is signed and security deposit paid. Sometimes there will be a structured payment agreement between the broker and landlord. In addition, agents are occasionally paid a reduced commission upon lease renewal.

There’s little in the way of regulating commission agreements and no standard commission rates per antitrust laws, so there are a number of ways that commission payment can be negotiated.

How Can Commercial Agents Maximize Their Earnings?

Using the ProspectNow platform, commercial agents have a strong advantage. We have the most complete database of commercial properties and owners, and data analytics to help boost your leads – all in one place for a low price.

The first step is to find commercial properties for sale, which is easily done. ProspectNow’s database has it all! There are over 38 million commercial properties in the database – some currently up for sale, and some designated “likely sellers” that aren’t yet listed but might go up for sale soon. But more on those likely sellers later! There are many ways to find commercial properties for sale, but the ProspectNow platform makes the first step and the following ones much easier.

Put A Name To A Property

Every property has an owner. Many times, it’s an individual. Finding out how to reach them is easy enough. But sometimes you’ll find a property owned by an LLC. In these cases, you’ll still want to look for an individual’s name to help increase your chances of making successful contact. How can you do this? Again, there are multiple ways of finding the owner of an LLC, and some of them complicated. Or you can log on to ProspectNow and get that name immediately. All of the contact information you need is gathered for you in one place.

With the same system, you’re able to find and contact the tenants of a commercial property. This can be useful if you’re looking for standalone businesses like fast-food restaurants.

Identify Likely Sellers Instantly

Off-market properties are an excellent opportunity to find great deals with minimal competition. These are properties that, for one reason or another, aren’t advertised. Perhaps the seller hasn’t yet listed the property, or doesn’t want the hassle of giving tours, or the property can be in the pre-foreclosure stage.

The challenge here is finding these properties without the aid of the listing, but it’s made easier with ProspectNow’s “likely seller” algorithm. This function makes use of data analytics and machine learning to spot characteristics of properties that are gearing up for sale. And because machine learning plays a role, the algorithm to identify these likely sellers only gets smarter with each week. These properties will show up in your leads lists with the “likely seller” badge to tip you off to their “not yet on the market” status.

Give yourself an advantage over other commercial real estate agents by using ProspectNow to spot off-market properties. You may be the lucky agent to reach these sellers first!

One-Click Contact

So, you have your list of leads. How do you contact them? Phone numbers are always readily available, but let’s say you’re too busy to call all fifty property owners on your list.

With ProspectNow, you send an email instead to every one of those fifty owners through the platform with one click. If that’s too impersonal for you, you can send physical postcards through the mail with your own name and contact information. The postcards are sent out for you with postage automatically deducted.

Not sure what to say? There are templates available for emails and postcards. But don’t worry so much about putting a script together when cold calling leads.

So how much do commercial real estate agents make? As much as they want. With commission-based earnings, the sky is the limit. ProspectNow has the tools to help you maximize those sales and your commission with ease.

Ready to close more deals and make more money? ProspectNow has helped agents do just that since 2008. We give you more data and unique analytics at a lower cost than competitors. Sign up for a free trial today.

 

 

7 Commercial Real Estate Coaching Resources Worth Trying

You’ve likely heard the story about the young boy and his grandfather. The little boy is amazed at how his grandfather is able to tie a fly-fishing hook so perfectly.

“Why can’t I tie the hook just like you, Grandpa?”

“I’ve been doing it longer, son.”

Such is everything in life—experience is how we learn. Years of experience and each mistake we make gets us closer to perfecting our tasks.

But the commercial real estate (CRE) industry is one where mistakes can cause terrible expenses and put a strain on precious resources. Commercial real estate coaching can help you avoid the pitfalls of a perilous journey.

Commercial real estate coaching offers valuable insight from the experiences of others. These professionals can share their expertise and answer your most pressing questions. What you may need to crack the glass ceiling of your revenue goals is a good session with a CRE coach.

Commercial Real Estate Coaching Programs Worth Trying

It seems like there are as many coaching resources today as there are agents looking for coaching. That can feel overwhelming for an agent. You don’t want to have to seek assistance for seeking assistance, right?

Some of the leading professionals in real estate created the following commercial real estate coaching programs for agents like you, just looking to improve daily operations and business overall.

These resources can show you how to perform various aspects of your job better—and who better to get this advice from than CRE professionals with their own real-world experiences to share? You’ll get fascinating insight into personal development, broker training, leveraging technology, and more.

1) The CCIM Institute

As one of the leading CRE training providers in the nation, the CCIM Institute offers a set of courses that can earn you a CCIM designation, or you can take just the classes you need for subject matter expertise. The institute has a network of certified professional instructors in all aspects of commercial real estate, making this one of the best resources for hungry CRE agents to connect with someone in their local area. You can even discover mentors and coaches you can informally connect with.

Ralph Spencer, a CRE professional since 1972, teaches many of his insights through core classes with the CCIM Institute.

2) The Massimo Group

Many of the leading global brokerage firms, such as CBRE or Lee & Associates, look to The Massimo Group for training. It doesn’t matter if you’re a new agent or a seasoned broker, you can learn something from this program led by Rod Santomassimo.

For example, the N2B, or New to Business program shows new brokers how they can build consistently growing businesses and outperform their competition, while they designed their Market Leaders program for seasoned brokers who might have plateaued in their market.

The Massimo Mid-Career coaching program is for everyone who falls somewhere between the two—agents and brokers who’ve seen a bit of success but want to kick it up a notch.

3) Jim Gillespie

Commercial real estate coach, Jim Gillespie, offers real estate coaching in every sense of the word. He does one-on-one sessions and also speaks at conferences for the CRE industry. He provides his services to agents, managers, investors, developers, owners, and brokers. He also hosts webinars and takes some of his conferences live, interviewing some of the top brokers in the industry.

4) The Lipsey Company

Founded by Michael Lipsey, the Lipsey Company is a go-to agency for those in the CRE industry. Lipsey himself is recognized around the world as a leader in commercial real estate coaching. In fact, he’s developed nearly 200 courses, including:

  • Systems for Success
  • Team Brokerage
  • Presentations That Win

They tailor each training module or coaching program to the individual needs of the broker.

The Lipsey Company’s principal areas of CRE coaching include training for:

  • Service providers, such as CRE brokers and property managers
  • Owners of commercial real estate brokerages, REITs, and other CRE institutions
  • Corporate Real Estate

5) Top Dogs with Bob McCombs

Top Dogs offers video training sessions led by commercial real estate expert Bob McCombs. McCombs’ training is perfect for agents new to commercial real estate specifically looking to excel in project leasing and tenant representation services.

6) Buffini & Company

Brian Buffini’s Buffini & Company offers a program for commercial real estate agents, The Pathway to Mastery. This is a program unlike any other—comprehensive and in-depth, it was created by a legendary real estate professional for other professionals who seek “legend” status. Buffini & Company offer three course levels:

  • The Essentials—helps new agents and brokers craft a solid foundation.
  • The Advanced—for CRE professionals looking to up their influence in the local community.
  • The Mastery—for brokers who want to build not just a solid business but a legacy.

They offer all courses one-on-one or in small groups.

7) Dan Colachicco

Over the course of Dan Colachicco’s CRE career, he brokered over $500 million in commercial real estate transactions. Colachicco’s been active in the CRE industry since 1979 and still maintains an active brokerage license in Florida and in North Carolina.

Dan’s passionate about the CRE industry, and it shows in his coaching offerings. Today, Dan is highly sought after by agents and brokers who want to maximize their potential. It doesn’t matter where you’re at in your CRE career—Dan’s coached and mentored hundreds of brokers and agents of all levels, from rookie agents to veteran brokers.

Dan offers a blog, weekly podcast, and other CRE training materials on his website at the SmartCREBroker.

Choose ProspectNow for Your Real Estate Training

With the above programs and commercial real estate training offered by ProspectNow, you could one day become a coach and offer your expertise to a new generation of CRE professionals.

ProspectNow has been helping investors, agents, and brokers like you find the information they need since 2008. If you want to find more leads, close more deals, and make more money, reach out to ProspectNow today.

How to Get into Commercial Real Estate

Are you thinking about becoming active in the commercial real estate industry? Maybe you’ve considered residential real estate but think you’d be a better fit on the commercial, or CRE, side of things. In residential real estate, it’s often easier to get started, and you’ll always have clients and potential transactions.

But commercial real estate also offers substantial potential clients, because CRE properties can offer investors steadier returns and improved cash flow when compared to residential properties. It’s also a better money-maker for CRE agents. In fact, around the nation, CRE agents have an average annual salary of $90,914–residential agents skew more towards $50,897.

So, if this sounds like a career you’re interested in, we’ve put together some information about what it takes to make it in the CRE industry and more.

Becoming a Commercial Real Estate Professional

The best way to earn success in any industry is to understand the field and know your product. Commercial real estate properties generate income for their owners. Think of places like hotels, apartment buildings, and other places of business. Investors often choose this type of property for the ongoing income it provides through tenant rents.

The steps to becoming a professional in the commercial real estate industry include:

1) Get your real estate license.

Whether you’re dealing in commercial or residential property sales, you must obtain a real estate license in the state in which you plan to operate. This gives you the right to represent both sellers and buyers, and also lessors or lessees involved in transactions. Your state’s real estate license is the same whether you go into commercial or residential properties. To get your real estate license, you have to:

  • Meet your state’s eligibility requirements: Every state has licensing requirements of its own and regulatory offices. Some of the most common state-to-state requirements include having reached a certain age, a clean criminal record, and at least a high school diploma. Your state may have reciprocal licensing agreements (like this example for Connecticut residents) with surrounding states, meaning you can conduct real estate business in that state as well as your own.
  • Take approved real estate classes: Each state’s courses, their content, and hour requirements differ. For instance, New York individuals must take 75 hours of approved courses; Texas requires its residents to take 180 hours. The classes have a difficulty level of college freshmen courses and normally cost around $150 up to $500. The cost also depends on the state and the format you attend–in-person or online.
  • Pass the real estate exam: Your exam will most likely be administered by a state agency and consists of 75 to 150 multiple-choice questions. Real estate exam passing rates are only around 55%, so it’s suggested you take advantage of any study guides or pre-exam programs you find. You’ll get your test result about seven days later and, if you pass, expect your license 14 days from the date you took your exam.

2) Find a firm that specializes in commercial real estate.

After you get your license, it’s time to find a brokerage that is:

  • Looking for new agents
  • Offering the opportunity to obtain market experience
  • Already working in the commercial real estate industry

Any experience gained is better than none, but if you’re not at all interested in residential real estate transactions, it’s best to find a firm that exclusively works in CRE. A committed commercial brokerage normally has training programs for new agents, and these programs may even include a salary while you learn. The typical CRE coaching or training program lasts about a year and lets you focus on just commercial properties so you don’t need to close residential deals to make an income while you’re learning.

That said, it’s much more difficult to get into these kinds of firms strictly due to the overwhelming competition. In the event you’re able to score a brokerage with a training program for new CRE recruits, you can expect an average annual salary of $35,000 before you to begin make your first commercial transaction. In some cases, the agency may not offer salaried training. In that case, you’d need to close some residential sales as you learn the ropes of CRE.

3) Join an association.

A lot of the top commercial real estate brokerages stipulate that their brokers must join a professional association, either at the national or state level. Some of the most respected associations include NAR and REBNY. And don’t think of these requirements as a headache joining a professional real estate association is actually important for your success. These organizations offer education, networking, and even discounts on items you’ll need in your career, such as software or manuals. You can even become a Realtor when you join NAR, the National Association of Realtors. The NAR is the United States’ largest trade association. It has over a million real estate professional members. Joining NAR adds a level of credibility to your title.

4) Take a look at related career options.

Commercial real estate agents aren’t limited to just CRE property sales. You can also venture into development or commercial property management. In development, you can buy land, build on it, arrange financing, negotiate leases, and supervise the entire process. Property managers handle everyday operations of commercial properties, such as repairs and maintenance.

Considerations in the Commercial Real Estate Industry

Before diving headfirst into a career in the CRE arena, there are things that outsiders don’t know about this industry. You should consider various aspects of a career in CRE before making the jump.

To be successful in CRE, you have to find leads and convert them into clients. In other words, how are your sales skills? Are you proactive? Persistent? If you enjoy a bit of friendly competition, you’re ambitious, and you have an uncanny knack to pitch things convincingly, you’d make a great commercial real estate broker. An outgoing nature and a no-fear attitude towards cold calling and talking to strangers also helps. Finally, as technology continues encroaching, albeit welcomed, a degree of tech-savviness is also necessary.

Is a Career in CRE Right for You?

If you’re already a real estate agent, you’ve got a leg up on others who’ve yet to make that career move. There are still many things to think about before totally diving into the complexities of commercial real estate. The CRE industry does offer its agents large commissions and several specialty career directions. It’s also got its own set of unique challenges. If you’re prepared to obtain the higher education needed (some states require a college degree); you’re fine with waiting longer for deals to close; and you don’t mind that you won’t close quite as many sales per year as your residential counterparts, a career as a commercial real estate agent could be right for you.

Looking for ways to get more leads and close more sales? ProspectNow has been helping agents and brokers just like you since 2008. You can’t find our data anywhere else. By using ProspectNow, real estate brokers will close more deals, and therefore, make more money!

How to Find Hotels for Sale

Hotels are a special type of commercial real estate (CRE). These CRE properties include real estate used for special purposes coupled with an existing business. If you’re wondering how to find hotels for sale, you should also understand this is a complex process. There are several details that must be addressed.

The first question a buyer should take into consideration is why they want to buy a hotel. For most, it’s purely the economics of it. For others, though, it’s an emotional purchase—maybe they’ve always dreamed of owning their own slice of the accommodations industry pie, buying into the hotel industry as a luxury destination, or boosting their reputation in the travel industry.

But, speaking of the travel industry, is now a good time to venture into this realm of commercial real estate? With the current impact on travel around the nation, this could be a double-edged sword. On the one hand, fewer people are traveling for business or pleasure—on the other, that could mean hotel sales prices could be at their lowest ever.

What is the Hotel Acquisitions Process?

Regardless of the reasons for buying a hotel, it’s a good idea to brush up on the hotel acquisitions process. Because of the combined nature of hotel purchases we mentioned above, it’s necessary for a buyer to recognize the practical human—and financial—limitations of a potential field of prospects. On the other hand, there are real benefits associated with gathering as much information as possible, as buyers with the most information tend to find the best deals.

While there are certainly variations in the buying process, there are nine logical steps most buyers take:

  1. Determining what they’re looking for in a hotel
  2. Identifying potential leads
  3. Putting together a team of hotel purchase professionals
  4. Evaluating each potential hotel
  5. Calculating a bidding price
  6. Communicating with the seller
  7. Negotiating the purchase and contract terms
  8. Doing due diligence
  9. Closing the sale

How long each step in the process takes depends on many factors, such as access to financing and the climate of the overall market.

2 Ways to Find Hotels for Sale

The two main approaches in discovering hotels for sale include:

  • Searching commercial listing platforms like ProspectNow.
  • Finding motivated sellers that haven’t listed their properties, also known as an off-market sale.

Both approaches have their own lists of pros and cons. The good news is ProspectNow can help brokers find both on- and off-market properties.

Search for hotel sale listings on ProspectNow

Online listings platforms like ProspectNow can help tremendously by already having done the legwork for you. You can search by property type, location, and other search criteria.

Find motivated off-market sellers

Hotels for sale are almost never listed on any MLS and searchable only in a few specialized online marketplaces.  But, you can also discover sellers who haven’t put their property on the market just yet if you know where to look..

The CRE market, despite recent setbacks from the pandemic, has remained incredibly strong and viable. This could mean a buyer might not find exactly what they’re looking for—or they may, and the competition is stiff. But in an off-market search, this is rarely the case.

Quick Hotel Valuation Guide

When considering buying a hotel, there are several things to think about—one of the most important is valuation. For instance, boutique hotels in tourist areas have fewer guest rooms than large hotel chains, but normally charge higher nightly fees because of special amenities. According to the US Travel Association, the total overall hotel occupancy in the United States during the first week of December 2020 was just 37% compared to 60% for the same week in 2019. Luxury hotels have taken the biggest hit—the first week of December saw occupancy rates of just 19% compared to 75% in December 2019.

Maybe there is no right (or wrong) time to buy or sell a hotel, but what’s the best approach to figuring out if a particular hotel purchase is the right one?

These are the main approaches applied to hotel valuation:

  • Income capitalization—Valuing a property that’s currently producing income is determined by multiplying its net return. This is an especially good method for buyers looking at investment opportunities.
  • Cost—Just as the word implies, cost valuation takes into account the amount a buyer has to spend and helps them decide whether they should buy a hotel or build one instead. This isn’t a favored valuation method for the fact it doesn’t take into account current income production or other economic factors.
  • Sales comparison—This is a useful valuation method that looks at previous hotel sales in a specific market or location, determines ranges, and considers the current momentum of hotel sale pricing when compared to similar hotels.

While these three valuation methods are all different and apply to various types of transactions, it’s likely a buyer will use a combination of these methods to come to a final purchasing decision, especially if they plan to be an owner-operator. Look at it this way:

It makes sense to purchase a property that generates income (income capitalization), but it also matters how much money a buyer has to spend (cost) upfront while being certain they’re not paying more than the hotel’s worth (sales comparison) compared to others in the same location. These same methods apply to those looking to sell a hotel, too.

Wrap Up

ProspectNow has been helping people just like you find the data they need since 2008. Brokers can find listings for buying or selling properties—and for much less than other platforms. For more information, please contact one of our knowledgeable reps who’d be happy to assist. ProspectNow has an established A1 reputation—we help brokers like you close more deals and make more money.

How Do Land Loans Work? Your Questions Answered.

Wondering “how do land loans work?” If you’re someone seeking an interesting real estate investment for a plot of land, a “land loan” is one type of loan you should consider.

So, what exactly is a land loan? How do they work? Is a land loan the right type of loan for you? We’ll break down and answer all of these questions in this in-depth blog.

What Exactly is a Land Loan?

As opposed to a loan for a property—your typical mortgage loan for a house and home—a land loan is money given to you to purchase land to develop, either for a home or commercial purposes. It’s much less common than a regular home loan. Still, many people do get it with the purpose of building their dream home, expanding a commercial enterprise, or speculating for future developments.

How Do I Get a Land Loan?

Getting a land loan is different—and considerably more complicated—than getting a regular mortgage loan from a bank or a credit union to purchase an existing house. There’s a higher degree of risk for those financial institutions if they’re distributing a land loan since there’s no existing home as collateral for this type of loan. If you’ve gone through the mortgage process for buying a regular home, you should expect something different without home equity – and expect some higher interest rates.

It’s also important to have everything in order for the financial institution before you go to them asking for a loan. Be sure to present them with the plans you have for the new land purchase—everything from future commercial development or building a home to future local and federal government nearby. It’s also important to get the land surveyed so that the lenders (and you) can set the exact parameters of what you’re looking to purchase and see if what you are planning to build will work there.

Once you have everything set, it’s time to look for a lender. That search might take a while—and how much you’ll end up paying usually gets set by the type of land loan you need. Let’s break those down here.

What Type of Land Loan Should I Look For?

One important element of the “how do land loans work” question—what type of loan should you look for? There are several different types of land loans that buyers should look into. The common types are:

  • Raw land loans are precisely what they sound like: raw and undeveloped. There’s almost nothing there except for pure, untouched land with nothing you’d expect in developed civilizations. That means there’s no electricity, water, roads, or anything else that people would typically look for when it comes to developing a business or building a home. If you’re looking for a loan for raw land, you are definitely “starting from scratch.” Unsurprisingly—given the underdeveloped nature of this land—it can be tough to get local lenders to hand out a raw land loan to build a house, grow a business, or start construction on anything else.
  • Unimproved land loans are one step up from raw land loans. It’s not quite as primitive as raw land, but it’s close. There may be roads and some other utilities, but you’re not going to have every resource you’d want in order to spur development on that type of land. It’s a little easier to get an unimproved land loan instead of a raw land loan, but you should still expect relatively higher interest rates when you look for a mortgage loan to finance the purchase of unimproved land.
  • Improved land loans are the easiest loans to get since they do possess the most (and most civilized) amenities. This is the land you’re likely familiar with; it’s the land you live on or do business in. This type of “improved land” comes optimized for work and living, with electricity, sewers, water, roads, and everything else you’re likely familiar with. Again, this type of land loan will be the most expensive to pay for—but will (generally) end up with the lowest interest rates.

Before you look to take out a land loan for land purchase, you need to figure out which type of land you’re interested in. That will drive your choice of lenders, loan terms, and your future payment schedule.

Note that seller financing is also an option for land loans—and a pretty good option, at that. In a seller financing deal, the buyer will pay installments directly to the seller over a stated period (precisely what would happen in a mortgage, for example).

It’s a much more flexible option for both parties and also enables the buyer to avoid going to the banks or other outlets for the lengthy (and often fruitless) loan process. It’s a faster process, with fewer parties involved-always a great idea in real estate.

There are a few different things that people should know about seller-financed transactions, too:

  • The buyer will need to display a credit score, just as they would to a mortgage lender. Expect the same sort of thorough check you’d get with a bank or credit union.
  • It’s likely to be a shorter-term loan than a mortgage. While mortgages may get spread out over decades in a regular home loan, seller-financed transactions for land generally come in a much shorter repayment term.
  • You’ll still have to present the same plans that you would to a financial institution. The seller still needs to see the same sort of planning and development in order to make sure their financial leap of faith is sound.
  • Buyers and owners will still need legal representation to complete the sale. Generally, a seller-financed transaction will require the same type of expert real estate agent and attorney representation to finalize all the paperwork.

How ProspectNow Can Help

Now that we’ve tackled the question of “how do land loans work,” let’s outline how ProspectNow can help! Looking for some more information on land loans and the potential benefits for your real estate practice? If you need the analysis that sets you apart from everyone else, it’s time to turn to ProspectNow. In business for over a decade (since 2008), ProspectNow provides the decisive and incisive data that enables real estate brokers to close more deals—and make more money—all for much less than found on other, competing platforms.

Ready to get started with ProspectNow? Visit us here!

META: How do land loans work? Find out the answer to this question in this in-depth blog from the experts at ProspectNow.