Downbeach Commercial Real Estate and (Chemical) Engineering
What does (chemical) engineering have to do with Downbeach commercial real estate in Jersey shore towns like Atlantic City, Ventnor, Margate, and Longport? More than you might think. Whether we’re talking multi-family units, condominiums, vacation rentals, apartments or mixed-use (retail & residential) properties, investing in commercial Downbeach property is all about analysis and numbers.
Thinking of Investing Along the Jersey Coast?
Here’s some food for thought from Downbeach Real Estate Broker, Sherri Lilienfeld.
Investors need not get emotionally attached to a Downbeach commercial real estate property. The numbers just need to work. Not only is acquisition price important, but savvy commercial investors must determine appropriate end uses of a property and the costs associated with achieving the end use.
A shrewd investor will ascertain the highest and best use for a property. (S)he will evaluate:
- Zoning restrictions
- Construction costs
- Redevelopment costs
- Carrying costs
- Allowable square footage of a final structure
The above will determine the best investment strategy for a particular property.
What is the Highest and Best Use?
Zoning restrictions and construction costs will dictate the highest and best use of Downbeach commercial real estate. For example, a property might be able to be developed into a commercial property (retail) with office space or as a commercial property with apartments. The development and construction costs and the prevailing rental or sale market for the various options will determine the highest and best use.
Of course, there will also be other costs, such as carrying costs, depending on whether the property can be developed as of right (i.e., without obtaining any variances) or if additional time and expenses are needed to obtain a variance. All of these variables and costs are put into a complicated formula to evaluate investment properties as well as determining a potential return on investment for a specific property.
The bottom line, literally, is that there are many costs and property restrictions that come into play as well as the ability put that information into a formula that accurately represents the timeline of events. Also needed are the ability to understand (and reduce) construction costs and the knowledge to speak intelligently to all the professionals who support the process.
How Does Commercial Real Estate Relate to Chemical or Any Form of Engineering?
Many real estate development companies hire engineers not business majors as 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 and project management which are also necessary skills for the Analyst job. The strong analytical skills and understanding of the construction process is a winning combination for a successful real estate developer.
Over the years, I’ve successfully tapped my formal engineering training and professional/management experience working at Fortune 500 companies. It really comes in 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.
One also needs a good vision when looking at the potential of a property. My husband and I would collaborate and do renovation designs with 3D CAD programs.
Today, I use my expertise in real estate investing to help others locate and acquire investment properties. I consider every deal as if it was my own money and time I am investing. After all, your success is my success. The better you do, the more likely you will be to invest again and also recommend Apex Prime Realty as your trusted advisor for your transactions. So, contact me today to discuss your goals for acquiring real estate in the Atlantic City and Downbeach area.