As a commercial real estate investor, it’s important to note that when you find the perfect property, chances are that other investors have too. In some cases, this means a bidding war that may last for several weeks or months. This ultimately puts you behind schedule and may cause you to miss out on the perfect investment.

However, there are a few things you can do to help you get the commercial property you want. In this article, we’ll explain 7 bidding war strategies to help you come out on top.

7 Strategies to Win the Bidding War

Become familiar with the area

The numbers will be different from one area to another, so it’s a good idea to familiarize yourself with the figures in the neighborhood you’re considering buying in. This will help you determine a good place to start with your initial offer and what you can expect from the other bidders.

Haggle, but be realistic

When it comes to purchasing a piece of commercial property, there’s nothing wrong with haggling over the price. However, when you’re in a bidding war, it’s important to be realistic about what you’re willing to pay. After all, the seller is trying to make a profit and there are other buyers that are willing to step forward if you are not.

Determine your max investment amount

Before you submit your first bid, you must determine how high you are willing to go on your investment. Consider the property value and how it impacts your future plans- then, consider what these benefits are worth to you.   

Have some flexibility

In addition to being flexible with how much you’re willing to spend, it’s important to be flexible on inspection dates, closing dates, etc. This can make your offer stand out over the others and may be exactly what the seller needs.

Don’t postpone your offer

If you find a commercial property that you’re interested in, don’t sit back and wait to see what others are offering. Instead, set yourself apart by being among the first to place a bid.

Prequalify

Taking the time to get prequalified for a loan shows that you’re serious about purchasing the property. In addition, it proves to the seller that you have the financial backing to make the purchase.

Reach out to sellers

Introduce yourself to sellers. This shows them that you’re more than your bid or a number on the page. By networking with them on a professional and personal level, you increase their confidence in you.   

Conclusion

If you have found the “perfect” investment property, chances are that other commercial real estate investors have also. When you find yourself in a bidding war, there are a few things you can do to set yourself apart. Then, when it’s time to make your purchase, reach out to the professionals at KMS Funding to help with your transaction.