When it comes to purchasing an investment property there are many reasons why investors are attracted to commercial real estate. Commercial investment properties often offer promising returns with low risk. However, as a new investor, or one looking to move into commercial investing, you may be interested in learning about some of the best tips for diving in.
Here’s a few tips for finding the right investment property that meet your needs.
Figure Out Your Budget
One of the most important tips that a new investor must take into consideration is their budget. If you have the capital to invest in cash upfront, then you have a pretty good idea of what you can afford. However, if you do not it is important to figure out how much capital you can acquire. You’ll need to examine and prepare your personal income, assets, and liabilities so you can approach lenders for funding. Or, you should seek individuals who might be willing to invest capital in your venture. After exploring these options you should have a better idea of a realistic budget for your investment property purchase.
Seek Advice From A Professional
Find an experienced commercial real estate broker to work with. Commercial brokers with experience in representing buyers, and maintaining and protecting their best interest; such as those at Elifin Realty, can help you navigate through the buying process. It is not recommended to approach serious commercial investing without a broker, commercial real estate lawyer, and an accountant on your team. These people will help you through obstacles, help keep your investment properties rented, and give you invaluable advice when making critical decisions.
Location, Location, Location
Keep the location of the property you are investing in mind. The location can dictate whether the investment will give you the best returns, or not do so well. Get to know the neighborhood and research similar property types in the area. Are the shopping centers bustling or vacant? Do the multifamily units rent for top-dollar, or are they often tenantless? Your broker can help you with this, as well as identifying and comparing comparable, but it’s important to keep location in mind throughout the buying process.
Understand the Market
There are a variety of investment property types such as retail, office, multifamily, warehouse, industrial, flex space, commercial land, and more. Before you delve into a specific type of commercial investment, understand the market. Ask your broker, and do research into the current analysis and future predictions of the market. Make sure you’re making the right decision on where you plan to invest. Research and preparation time are always well worth it when you get to closing.
Explore Various Sellers
It is ill-advised to settle on the first property you see. There are a multitude of possibilities when it comes to commercial real estate, even in smaller cities. Explore a few sellers and find one that is motivated to sell. Motivated sellers are more likely to sell at a lower price and even concede some terms in order to close a deal faster. This is another area where having a broker on your team becomes a huge asset. They know who to contact and what questions to ask when getting more information on a property or negotiating a deal. At Elifin, we focus on empowering our clients with expert knowledge about the market so they are confident that they’re making the best decisions with their investments.
Though there are many ways to go about investing in commercial real estate, keep these tips in your arsenal to “buy right.” While no deal is created equal, a smart buyer will find one that works for them and provides the best returns. If you are looking to invest, don’t hesitate to contact us today.