Every salesperson knows that they have to network to keep the opportunities coming their way. In commercial real estate sales and leasing, the networking process is a bit special. It is the local business community and the investors that should be at the centre of your network.

Consider the following questions when looking to improve or widen your networking skills and impact in the local area.

1. Just who are the larger businesses in your area that will need to deal with property issues in the future? Expansion and contraction are the things that you are looking for here.
2. Who are the most active property investors in the local area, and what type of property are they interested in? How long do they hold property?
3. What lists can you get hold of with all tenant and lease details in key properties and locations? All large properties with multiple tenants in situ should feature in your list.
4. Who are the decision makers when it comes to the local property zoning and development opportunities? Make certain you know just what zoning changes and redevelopment matters are coming up.
5. Who are the professional experts that help property owners with sales and leasing decisions in the local area?
6. What property investment groups exist in the local area that may require a guest speaker to talk about property at their meetings?
7. What business groups exist that may need a guest speaker to talk to them about property trends in the local area? Business people always like to know what has been happening to rents and prices.

This short list of people and groups are those that you should be focusing your commercial real estate networking efforts on. Networking has to start somewhere and that is at the level of the individual single person. A critical early part of the networking process is to ensure that they are a decision maker in one form or another.

The most successful salespeople in commercial real estate are those that create and build an extensive database of contacts. They then stay in contact on a regular basis with relevant local information such as:

• Price trends in zones and areas

• Rent trends and current rates by property types

• Property on the market currently

• Vacancy factors with trends on vacant space available

• Supply and demand changes to local property

• Community or demographic changes

You could say that the above is a simple list made up of market intelligence. The reality is that you have to know that information to be of any value to the people that you serve. The information also helps your networking efforts.

Real estate is an ever-changing and multifaceted investment medium. The same investment strategies, such as short sales, REO or buying notes, gain and lose position in the same manner that stocks or bonds gain or lose their position. For this reason as an investor, we cannot remain stable and radicated in only one investment strategy, but move with the economic trends and demands.

While short sales and REO are still powerful and very viable niches, even though we have seen confusion and reorganization with the different lenders lately, and patience is the name of the game, commercial real estate investing has been gaining attention and it is going to be even a more popular way of investing in the upcoming year.

For several investors commercial investing has seemed as a way of investing out of reach or as a later goal, but actually it is becoming more achievable and lucrative for even the small investor than residential, especially for apartment buildings, which are preferred by lenders over other types of commercial investments.

There are some misconceptions that should be addressed:

• Financing is difficult -nowadays, it seems easier to get financing on a commercial project than a residential investment. Lenders look at the property performance and give less importance to the buyer’s credit: buyer’s credit can be in the lower 500s.

• Large down payment is required -if the lender is a JV partner, financing is usually 100% of the purchase price. Also sellers are motivated in carrying second mortgages and lenders still allow second mortgage financing and other selling incentives as part of the deal structuring.

• Management is difficult – for larger apartment buildings, most managers live onsite and are dedicated to the management of only that specific property. Therefore there is a better control of the situation.

Also other important considerations are:

• Vacancies are low and getting lower -with the housing crisis and displaced homeowners (because of foreclosure or loss of job) there is a high demand for temporary housing (rent versus buying) and it is going to increase in the next year.

• Long term wealth -immediate cash flow and great appreciation potential in the next 5 to 10 years.

• Tax breaks and incentives

• Critical mass principle -more units and more income streams lessen the risk

As stated in a Special online Report from the National Real Estate Investor Association (NREI), “55% of all respondents to a survey conducted by NREI and Marcus and Millichap Real Estate Investment Services believe that now is the time to buy apartments, followed by retail (32%)…. Apartment owners are also bullish on rents, with 41% expecting that rents will increase in the next 12 months.”

In light of the facts and latest trends, as an investor always looking for the best way to capitalize, try to look into commercial real estate and at least add it as an option to your investment strategy.