1. Know your market

Location is critical in real estate. “Know your market, and have a clear view of why you want to invest there,” Oehler said. “And be able to articulate that—your story is important.”

For example, a client might be familiar with a neighborhood where they grew up and want to invest in an apartment on a block with great access to transportation. The hospital two blocks away is a major employer for the neighborhood, and the investor believes that will help their building stay occupied with gainfully employed renters.

“It’s important to know who’s there, who’s not and why. Is the area mom-and-pop ownership primarily, or is it large institutional national companies? As an investor, do I want to compete against that?” Oehler said.

Your reasoning is key, but it doesn’t have to be complex or sophisticated. “If you own five buildings already, and the sixth one you’re looking at is a quarter mile away from the others, that's a good reason,” Oehler said.

2. Work with a lender that supports your goals

“First and foremost, your lender should take the time to understand what you’re looking to accomplish,” Oehler said. 

“You need a good relationship on the lending side—someone who takes the time to understand your business and your vision, someone who doesn’t view you as a transaction,” he said.

The lender should also be able to help you with services such as payments, treasury and cash management. Your lender’s payments and cash management teams should have a strong understanding of commercial real estate and specialized knowledge and tools tailored to property owners’ and investors’ needs.

“And if real estate investment is your long-term strategy and your goal is developing wealth over time, you need a lender who can accommodate you at all stages of that growth,” Oehler said.

3. Look at your portfolio holistically

You should focus on your investment strategies and overall portfolio, rather than individual deal terms, which can vary based on multiple factors, including:

• Property type: Deal terms for one sector can be notably different from another. For example, industrial may have slightly higher interest rates compared to multifamily because of its higher perceived risk. Financial terms for retail investments may require higher equity and offer lower loan-to-value ratios. Likewise, office buildings’ financing terms can be complex and may require higher equity contributions than other property sectors.
• Current stage in the real estate cycle: “We’re at the bottom of a cycle right now in multifamily, and our acquisition business has never been greater. We’re helping our clients acquire what they view as good deals,” Oehler said.
• Deal term alignment with investor needs: Deal terms will likely differ for each individual investor. “For example, multifamily real estate in general has a relatively high barrier to entry. A new market entrant needs to acknowledge and understand that to manage their expectations,” Oehler said. Some deals may look better if you put more equity into them, which can likely also positively impact pricing.

“Remember, borrowers and lenders have the same interest—a good deal that works out the way it’s planned,” he said.