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Value investment requires focus and discrimination

On Behalf of | Feb 6, 2017 | Real Estate Law |

Value investing in Ohio commercial real estate is about purchasing at the right price. Though the asset should provide money as well, an income stream is usually of secondary importance for value investors. The real worth of the investment generally comes from an appreciation in price over time.

The world of private-equity investment is quite competitive. In order to identify and take advantage of areas where value investments are available, investors must employ increasingly diverse strategies. Many successful investors proclaim the advantages of databases, for example, but there is no substitute for actually viewing properties in person. As the market for investment expands geographically, individuals may have assets in different parts of the country or all over the world.

It is impossible to identify every market opportunity. That’s why investors must make decisions about where to focus. Many find niches by directing their investments exclusively toward one state or region of the country, or toward one type of commercial real estate asset. Knowing the debt holders, primary tenants and owners of properties, both on and off the market, gives investors an edge over their competition.

The goal of a value investor should not be to see every bid accepted, but to purchase properties at prices that allow for growth. The services of an attorney with experience in business and commercial law may be helpful during commercial real estate transactions. An attorney may be able to offer advice regarding the structuring of a deal, including ownership structure following the transaction. The lawyer could also negotiate terms with the other side or might help by drafting the legal documents required to establish a holding company or other business entity.