10 steps for creating a winning real estate transaction- Frank Dever
Commercial real estate transactions can be very lucrative but they are complex in nature and can become entangled with lots of problems. So how does the successful investor create a winning transaction and be protected financially and legally at the same time?
As with so much in life, the answer is having accurate and timely knowledge and reliable information before you take the final steps in acquiring a new investment property. Here are ten actions you can take to help create a winning transaction and protect yourself at the same time.
1. Develop a good working relationship with a seasoned and experienced commercial real estate broker who can help you identify an investment property that will meet your goals; who will be a valuable source for current and accurate information about the commercial market; and provide guidance throughout the transaction.
2. Retain a first rate real estate attorney who will provide proper legal protection in your contract or lease as well as the closing, and also be a good sounding board and advisor as you move through the process.
3. Have a good financial advisor/analyst with knowledge and experience in commercial real estate transactions, who will add solid and timely analysis to your decision–making process.
4. Form a relationship with a strong local banker who will be a source of good information, ask good questions and help keep you focused on the finance-ability of your project.
5. If there is a structure involved, utilize a competent building inspector who will examine your property and provide you with a highly detailed evaluation.
6. Utilize public records and the internet to build your knowledge about a prospective property and its ownership. Google, for example, is an invaluable resource for researching information about individuals. There was a commercial leasing transaction in my area that blew up when a new tenant was arrested by the FBI just two weeks after moving into their new location. The internet had a wealth of information about this tenant and their operating history in several states. Had someone done their homework, a serious problem could have been avoided.
7. In Florida, www.Sunbiz.org is another resource that can assist you by identifying names and addresses of corporate officers for most businesses. This will help you to know the seller or landlord, an essential element of any negotiation.
8. The County Property Appraiser’s website may help you determine and verify property tax information, a building’s age, ownership, history and original cost.
9. CountyPublicRecords can inform you of the details of the original recorded mortgage.
10. Talk with people in the surrounding community. Use your eyes and ears and your common sense. Don’t allow yourself to be rushed when making a large acquisition or lease decision. Take the time to walk around the surrounding area and talk with the neighbors, workers in the area, other tenants. They can have invaluable information about your building, proposed roadwork, environmental issues, new construction in the area and may be able to tell you important “war stories” about your building. The stories may deal with present or past tenants, current ownership or even maintenance issues pertaining to the property.
As a last thought, remember that there are many elements to a transaction. Make yourself an expert before you make your offer.
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