CoStar v. LoopNet

[Earl White]

Hello, I am a brand new real estate imvestor (haven't even purchased a property yet). My partner and I are looking in the Miami-Dade County area. While our focus is SFHs, we are also considering smaller commercial apartments (6-12 units). Among other sources for leads, we're considering using CoStar or LoopNet for commercial apartments. Has anyone had experience with these sites, to help us weigh the relative merits of each? Thank you very much.

[Joel Owens]

"how do you find a broker to give you the good deals before they show up on loopnet?"

FIRST define what you are looking for. THEN seek out brokers who have the experience and connections to the properties. For example a friend of mine does Industrial only and has deep connections to owners with properties not on the market.

My expertise is Apartment buildings and Triple Net leasing. I know Industrial a little but would be of little value to a buyer like that as it's not my focus.

6-12 units is very small for multifamily. You might find a few on LoopNet but many of the smaller properties might trade on your local MLS instead. I see a bunch of these types of little properties on the residential MLS. LoopNet is more for larger commercial properties and Costar mainly focuses on Office.

You can see about 10% of properties on Loopnet for free but to see all of them you need the premium membership.

If your focus is 6 to 12 units you would be wasting time talking with the brokers listing 50 or 100 unit plus apartment buildings. A 10 unit might be a 400k sale versus a sale in the millions and millions for a larger property. I have heard from some of my other broker friends that there is demand for these little buildings of 5 to 15 units because residential buyers are getting crowded out on houses and understand renters so naturally they have money to progress to the little multifamily units.

You might find it easier if you are going that small to just buy some quads instead if you want to hold because the long term loan at a low rate will be better. Commercial loans are typically 5,7,10 year terms. There is some longer money entering the market but basis points are about 75 to 100 points higher on average than market rates to compensate. The key to those loans is if they are assumable down the road and at what terms as that might be appealing to a buyer if they can assume an existing loan at lower rates than future market conditions.

Hope it helps