More Investors are using the Internet to Conduct Due Diligence
One recent example: A leading commercial real estate Web log (better known as a blog) has introduced a new index tool designed to increase ROI and minimize investment risk. NetGainRealEstate.com, the brainchild of two California brokers, was officially launched in July. But, in mid-October, the blog unveiled its National Income Property Index (or NIPI). This free index tool examines local employment statistics and the cost of debt service to give investors a better picture of the market.
Co-founder Bob Mann says that NIPI fills in a needed gap for investors seeking the best due diligence tools: “This tool works for an individual property all the way up to a giant portfolio of properties,” says Mann. “We’re updating the data on a weekly basis, too, so investors don’t have to use outdated information anymore.” The NIPI crunches employment figures to determine the appropriate spread that an investor can use when bidding on a property. It also calculates the current cost of debt service to generate a range of capitalization rates. NetGain also offers due diligence checklist known as the Economic Valuation System that also rates property investments.
LoopNet Broadens Service Lines and Data Universe
Aside from expanding service to cover commercial property sales data in more than 300 countries, LoopNet also documented more than 50,000 transactions during the 100-day period leading up to Halloween — the most it has recorded FOR THAT PERIOD OF TIME.
The San Francisco-based company, which trades under the ticker LOOP, has become one of the most heavily trafficked real estate Web sites. Earlier this year, LoopNet launched its Recent Sales service to members. The service provides real estate transaction information and covers all major property classes, including land investing. One cool function: Records are now available just a few days after a transaction has closed. Given the volume of deals that have closed in recent months, investors can use this information as part of their due diligence.
The Recent Sales comp service has grown dramatically since it was launched in March, bringing the total up to 650,000 as of late October. This is solid revenue for LoopNet too since each individual property record costs as much as $3.95. Marketing director Thomas Byrne of LoopNet says that his company is actively refining and building on the database.