4 Keys to Finding Commercial Real Estate
Commercial real estate can be a great investment if you find the right deal. Whether it’s the additional cash flow, the beneficial economics, or bigger payoff, investing in commercial real estate can payoff if you’re prepared and educated in the ways of the business.
Here are seven tips to get you started in commercial real estate.
Think Like a Pro
When you get into finding commercial real estate, it’s important that you think like a professional. You need to know that commercial property is valued differently than residential property and how it’s different. The income on commercial real estate is directly related to usable square footage, which is not the case with residential properties.
You’ll see a bigger profit from investing in a commercial property and the leases are longer than single-family residences. However, commercial property lenders prefer at least 30 percent of the money up front before they’ll give the loan a green light.
Have a Plan
When you begin the process of looking for commercial real estate to invest in you should set parameters early. Ask yourself the important question regarding your search. How much can I afford to pay? How much do I expect to make on this deal? How many tenants are already on board and paying rent? And how much rental space do I need to fill?
Recognize a Good Deal
There are two keys that professionals have to recognizing a good deal. The best deals are the ones that you know you can walk away from so it’s important to have an exit strategy. It’s also important to have a good landowner’s eye. As soon as you see the building, start looking for damage that will require repairs, assess the risk of owning the building, and calculate whether the property meets your financial goals.
Find a Motivated Seller
Part of finding the right real estate deal is finding cheaper property in good shape that you can turn into a profit. There are several reasons that an owner may be looking to unload a good property for below market value. If you can find a seller like that, negotiations will go easier and you’ll probably get the property cheaper.
A large part of making a profit off of your commercial real estate investment is finding the right deal. These four tips will help you start to find that deal. If you’re looking to buy commercial real estate, contact Harkins Commercial Real Estate to help you find the right deal.
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