Real estate investors, like all hungry entrepreneurs these days, have to race against the clock. So many facets of our business have expanded in so many directions. And now they are spreading more and more in the digital space. All of this, of course, means more demands on our time and attention.
Savvy investors not only need to be careful about where they invest their capital, but also where they spend their time scouting for deals.
So for real estate investors, this question begs an answer: Is LoopNet worth our time?
You've probably heard a few negative jokes about LoopNet here and there. If you talk about real estate often, you may have heard complaints like "Don't waste your time on LoopNet" or "There are no good deals on LoopNet."
But let's not quickly join the mockers' chorus. First, let me give you an opinion: I think LoopNet deserves a closer look.
What is LoopNet really?
The best place to start is to clearly define what LoopNet is. LoopNet is simply an online listing service forcommercial real estate-No more, no less. It is not a brokerage business nor an extension of a larger real estate company. It is an independent company: an online listing service for commercial property for sale or rent.
The only small fact of the matter is that the service is paid for. And the more you want to do to market your property on the site (e.g. move to the top of the page or upload additional information), the more your fee will increase.
To be absolutely clear, LoopNet is in no way operated as a broker or as an arm of a larger real estate company. It is only a fee-based quotation service for real estate agents and commercial landlords to sell or rent commercial property.
Is LoopNet worth it? Weigh the pros and cons
Next, let's consider whether LoopNet is worth our valuable time by examining the complaints, the downsides, against it.
Disadvantage #1: LoopNet is paid
The fact that it is a paid service brings us to the first and most obvious reason why many people believe that there are no good deals. Real estate agents and others who have commercial properties for sale simply do not want to pay the fees required to upload their listings to the site.
Many commercial property owners will try to avoid paying this listing fee and other fees required for additional "updates" to their listings.
Related: Try these free web tools to rate offers
Disadvantage #2: LoopNet is not typically part of the brokerage process
A second and major reason why some good deals never make it to LoopNet is that they're simply not part of an agent's process of marketing a property. Many brokers have a method that involves taking a first look at their top 3 investors they know and trust to get a fair price, have the funds to close, etc.
If one of your top three doesn't bite, they'll put you through a bidding process and put you on their rather lengthy email lists while pushing you for the latest and greatest offer. If a broker has an email list of three thousand, four thousand or more, they can be absolutely certain that they have a pool of buyers large enough that they don't pay the necessary fee to join LoopNet.
In short, LoopNet will not be part of the marketing structure some agents use to advertise and sell their properties. Therefore, a significant amount of good deals will never reach the site.
Drawback #3: LoopNet throws too wide a network
A third reason many good deals don't make it to LoopNet is that it casts such a wide net. By wide network, I don't just mean anyone in the country with Wi-Fi can access properties on LoopNet, although that's part of it. But I also want to say that there are no filters or other mechanisms on LoopNet that agents can use to determine if someone expressing interest in a property is actually a trustworthy buyer.
Not knowing whether a buyer has the financial, legal, and other resources to smoothly close a deal keeps some brokers off LoopNet.
Okay, so those are three key reasons some good deals don't make it to LoopNet. Does this mean we should throw in the towel and bypass the loop (i.e. LoopNet)?
My answer to that question is a resounding no.
Why it's worth trying LoopNet
Let's see it this way. Yes, LoopNet has limitations. It will not be the place where you will find all the good deals. But all tools have limitations.
Just because you can't drive a nail in with a screwdriver or turn a screw with a hammer doesn't mean those tools are useless and should be thrown away.
So the next step in our LoopNet research is to look further under the hood of this thing and see if, despite its limitations, it can be used effectively for the benefit of your real estate business. Now that we've seen its disadvantages, let's explore its capabilities (the advantages).
Pro #1: There are great deals
First, despite the complaints, LoopNet occasionally has great deals. A great offer is a property that is offered at a great price and without any real problems. It's ready for the controller; All you have to do is get behind the wheel and the flow of money will follow.
That's strange. These traits are unicorns, but they exist. Stay alert in your search and you will eventually find one.
The problem is that big deals don't last long.
We bought a 198 unit apartment complex that we saw on LoopNet. It only appeared on the website for a few days. It was a lot and we had to act quickly. That means if we hadn't searched LoopNet, we wouldn't have seen it!
Related: What type of commercial property is best for investors?
Pro #2: Rough diamonds or good deals tucked away in Plain Plain
Second, consider this maxim: “You can't find a good deal. You do good business.
This is one of the fundamental keys to making LoopNet work for you. Many listings are posted on LoopNet for one reason or another. Many of them will have hair. That is, the properties will have problems of one kind or another.
Some of these offers will be the ones that you can make work for you. If you have the wherewithal to tear your hair out a bit, the price is worth it. And that's how you make a good deal and "make" a good deal.
Pro Nr. 3: Networking-Potenzial
Finally, and perhaps most importantly, LoopNet can be implemented as an effective networking tool. Start by connecting with brokers through the website. It doesn't matter if your current offer is a good deal. The goal to keep in mind when networking is, first, to get on a broker's email list, and second, work towards becoming one of the top three.
This is the key. If you're in the top 3 at a broker, chances are he'll toss you any tasty bones he acquires before bidding them higher.
To climb the ranks and join the top three riders, you need to show them you mean business. A great concept to keep in mind in this regard is "bang the wall multiple times until it falls".
By that I mean don't be afraid to keep showing runners how serious you are about becoming one of their favorite runners. You need to implement a multi-faceted strategy to reveal this to them.
Here are some suggestions: make sure you call them every two to three weeks, ask about other introductions, subscribe to their business, check out the numbers, and offer them a price that might work. But by far the most important thing you can do is visit these brokerage markets.
Hop on a plane and visit the top three brokers in a given market. When you make such a commitment, the agent's appreciation of your sincerity skyrockets. That will likely put you in the top three quickly.
Here it is. Despite its shortcomings, LoopNet can be an effective, useful, and valuable tool for growing your real estate business.
You must be willing to look beyond the fog of ridicule and ridicule that is sometimes thrown at the listing site. But if you do, you'll find a fantastic tool to improve your game.
Be sure to consider the practical and valuable uses of LoopNet:
- First you can acquire unicorns. (This equates to about 5 percent of your consumption.)
- Second, you can get good deals on furry properties if you know how to shave well. (This will account for about 35% of your consumption.)
- Finally, it's a great networking device, especially if you're strategizing to finish in a runner's top three.
Happy hunting and gathering, LoopNet fans!
make surewatch my videofor more ideas about LoopNet.
What do you think of LoopNet?
Nota de BiggerPockets:These are opinions written by the author and do not necessarily reflect the opinion of BiggerPockets.