Main Things To Know When Buying Commercial Real Estate

You may want to start looking for a property manager to proficiently manage the property

. Your real estate investment advisor should present you with 2 or 3 local companies, each with its own suggestion. Your main aim is to decide which company you will employ. The property manager will be the main point of contact between you, as the landowner, and the tenants. A good property manager is critical in keeping your property fully occupied at the highest market rent, the tenants happy and in turn helps you attain your investment objectives.

There are some points you must keep in mind when purchasing commercial real estate when you are a business owner.

Get prepared Most talented lenders can give you a checklist of their needed documents immediately. Full documentation loans are worth spending the extra time on in order to get organized and shave a couple hundred basis points off interest rates. This will add up to tens of thousands of dollars, if not more, over the life of your loan.

Financing is a main requirement for the purchase of commercial real estate. Take the steps of getting pre-qualified for your loan before you look around for the right property. This way you will look for the commercial property that you can pay for.

Know the market - use an educated profitable realtor to find your new property. If youre like most business owners, you dont have time to go on endless drives shopping for a building. A skillful commercial realtor can save you time plus you with equivalent sales/ lease rates in the area, plans for new development in the area.

Buy commercial real estate for the right reasons if your likely exit strategy someday is not an IPO, but rather selling or simply closing your business, then it makes great sense to effectively "pay yourself lease" rather than some absentee landholder. As soon you have the capital for the down payment, you should consider turning that rental payment into an advance payment that will at least give you something for your effort. By doing this, you no longer will be throwing away your rent payment monthly, but building equity in a significant asset that also offers multiple tax advantages.

Consider buying/building more square footage than you need right now -- you can always grow into it, but this will also allow you to get some leasing income until that time.

Set up a real estate holding company or what is known as an Eligible Passive Concern (EPC) to own your new property -- the formation of a master lease between an EPC and your operating company is how youll bind the two together. Only work with a commercial specialist your time is valuable so only deal with a lender that specializes in commercial loans. You can take the help of specialized Property Management team. That will help you to fulfill all your needs.

by: Shimpy

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