This article will focus upon the pros and cons of looking at listed versus unlisted deals. The title to this article is very misleading in some ways because you can find great deals that are listed in you can find great deals that are not listed. It is not whether a deal is listed or unlisted that makes it a good deal but rather your knowledge of the market and recognition whether a deal meets the criteria you have set forth to define a good versus a bad opportunity.
Listed deals often will have a great deal more competition for them as there are many buyers who are aware of a property being sold. With the current economic climate, this can result in overpaying for a property based upon the competition for the properties. That is the major con when looking at listed deals. The benefit of looking at listed deals is that all of the necessary information should be available so that you have the quality information you need to make a good decision. Expectations can be on the same level of both for the seller and the buyer. The seller often will be aware of the time it will take for the buyer to do his or her due diligence due to the broker setting expectations upfront.
Unlisted deals often will have less competition for the deal. This can allow you to potentially buy at a lower price than if the property were conventionally marketed. Struggles can come out when looking at an unlisted deal though because often times there can be a lack of good quality information. If there is a family partnership and the general partner dies without telling any of the limited partners where in the information is, how will you be able to find this information?
The smaller partnerships often will also have different expectations related to time. You can take a great deal of time to do due diligence and many individuals do not realize that this day. If someone has owned a 100 unit building for 60 years, he or she may not realize how much time it takes these days to look at and look over what the deal is good or not. The brokers who bring you unlisted deals often times can be very hard to find. These brokers may work out of their homes or keep a low profile so that they are hard to find. These brokers may not provide as much professional guidance as would happen normally with a listed deal. This can also allow you to overpay for a property.
This article should have given you a sense of the pros and cons of both the listed and unlisted properties. The market for commercial real estate is very hot right now so is very easy to overpay for both listed and unlisted properties. You must be aware of your niche and criteria so that you can recognize whether a deal is good or bad. A deal is either good or bad no matter if it is listed or not listed.
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