Creating Value for the End User
At Fortune International Realty, we are committed to maximizing value for owners of commmercial property located in Miami Beach, and most especially, in the highly coveted South Beach rental market. In simple terms, this means that we will utilize all of our training, practical experience, and knowledge to bring true value to a real estate transaction.
The mentality during the boom years in Miami's Real Estate market was that if you build it, they will come. However, experience has proven that if there is not enough value for the end user, buyers will not step up to the plate and purchase. The commercial real estate market is about creating value and financial returns for the end user.
The value equation for end users is based on two factors: the postivive cash flow generated by a property and the cost of acquisition. Given today's market reality, we work with a limited group of sellers that must understand this value equation. We have successfully represented many sellers of office buildings, retail centers, hotels, industrial warehouses, and multifamily buildings to reposition their properties for maximum value.
The key to the viability and long-term financial success for our clients is the creation of value for the end user. Once the balance is right between future value and price - the purchase and sale process moves forward to a successful closing.
Sellers in today's market should ask themselves:
- How much cash am I going to need to run the property for the next 2 years?
- Am I prepared for a sudden increase in costs - taxes and insurance?
- If one tenant leaves or stops paying rent, do I have a plan in place?
- Can I refinance if my loan expires in the next 24 months? How much cash might I need if the appraisal is below my expectations of price?
Buyers should be able to answer the following:
- What added value will I bring to the property?
- Do I have the cash and financing in place to purchase the property?
- Do you have relationships and pre-approvals with at least two lenders?
- Do I have a detailed and specific plan for the next two years?