What does chemical engineering have to do with commercial real estate in Jersey shore towns like Ventnor and Margate? More than you might think.
Whether we’re talking multi-family units, condos, vacation rentals, or mixed use of retail & residential, investing in commercial Downbeach property is all about analysis and numbers.
Do the numbers work? Some food for thought from Downbeach Real Estate Broker, Sherri Lilienfeld of Apex Prime Realty.
A Real Estate investors should never get emotionally attached to a property. All that matters: the numbers need to work. Not only is acquisition price important, but savvy commercial investors must determine appropriate end uses of a property.
A shrewd investor will ascertain the highest, and best use for a property. Evaluate the following to determine the best investment strategy:
- Zoning restrictions
- Construction costs
- Carrying costs
- Square footage of final structure
What is highest and best use?
Depending on zoning restrictions, a property could be developed into a commercial property (retail) with office space or residential apartments. Construction costs and the prevailing rental / sales market will determine the highest and best use.
NOTE: Carrying costs. Can the property be quickly developed without need for variances? Can you handle carrying costs if additional time is needed to obtain a zoning variance.
These variables, along with associated costs, feed into a complicated formula to help evaluate investment potential and ROI, return on investment.
Keeping construction costs under control. Can you speak intelligently with contractors, planners, engineers, architects and other professionals connected to the process? Something to think about.
How does commercial real estate relate to chemical engineering?
Many real estate development companies hire engineers, not business majors. They want analysts for evaluating acquisitions. Specifically, they want engineers, because they’re trained to develop complicated financial models, and then, crunch & analyze the numbers.
Many engineers have a strong background in construction. That’s a winning combination for a successful real estate developer.
Over the years, I’ve successfully tapped my engineering training. It really comes on handy. My experience with construction, combined with analytical/math skills have boosted my success rate in real estate sales and investing.
I bought my first investment property, by myself, at age 23. It was a multi-family property. Later on, my husband and I started buying ‘fix and flip’ properties. I’d put together a budget for the properties; acquisition and carrying costs, improvement costs, and then the outsale/profit. I found it challenging and exciting, to see how accurate I could be with the budget.
My husband and I would also do renovation designs with 3D CAD programs.
Today, I use my expertise in real estate investing to help others locate and acquire investment properties.