People are attracted to commercial real estate investing for a number of reasons. Your reasons will likely be determined by your current knowledge and goals. The more information you have, the greater your earnings will be through your commercial real estate dealings. Below, you?ll find some great tips to help you start your commercial real estate career, or to add to your already wide breadth of knowledge.
Buying commercial properties requires plenty of perseverance and calmness. Never rush into an investment. The property you buy in a hurry might not deliver what you need to reach your goals, leaving you to regret the purchase afterward. Plan to keep your eye on your market for as long as a year if you want to find the right investment.
Put your energy toward one investment at a time. Focus on a single type, should it be apartments, offices, retail, land, etc. It is best to be able give each investment your undivided attention to ensure the best possible results. Becoming a guru in one investment category is preferable to minimal success spread across multiple investments.
Get a commercial loan approval before looking at commercial property. Consult with friends and fellow investors to manifest a short list that includes the optimum lenders of your community. Research all the lenders on your list and determine which one you?d like to work with. Talk to the lender and make arrangements for financing prior to purchasing your first property. If you are willing to devote the time to covering all of your bases, you can improve your chances of qualifying for a loan.
Get clear and precise square footage numbers for any space. Two different measurements are commonly used in commercial real estate. One is a measurement of the usable square footage based on the available square feet based upon space that can be used by the business. The other measurement is total square feet, which will include walls and spaces that cannot be inhabited. By knowing both measurements, you will have a smoother time dealing with the property.
Before settling on a broker, determine if they negotiate aggressively or rationally. Know what sort of education and background they have. Choose a broker who only uses ethical methods and can help you to get only the best deals. Request evidence of previous negotiations, both successes and failures.
Social media is an important tool for keeping brokers and investors appraised of your services. After completion of a transaction, you should work to cultivate an online presence.
The seller is required to disclose any information they know regarding any possible environmental hazards. Hazardous waste on the property is a large area of concern. Regardless of whether or not you caused the problem, as the landowner it is your responsibility to fix it.
Before buying, make sure that you consult a tax adviser for assistance. A tax adviser can let you know how much money the buildings will cost you, and the amount of your income that will be taxable. The adviser can also assist you in finding areas with comparatively lower tax rates.
You should try to understand the NOI metric. Success means that your income outweighs your operating costs.
Scrutinize any disclosures made by a real estate agent whom you intend to hire. One thing you should specifically watch out for is dual agency. Dual agency in real estate is when the agency works for both parties. In the case of a rental situation, the agency represents the landlord and the tenant. Both parties need to clearly understand that the transaction is being handled by a dual agent and consent to this fact.
Don?t underestimate your relationship with private lenders or investors when you buy commercial real estate. Often, commercial real estate is sold before ever being listed as being for sale. The only way you might find out about it is through the network of people you have carefully developed over time. Private lenders and investors are often in the know and can be key to informing you of a potentially good deal.
As stated earlier, there are a lot of exceptional reasons to look into commercial real estate investments, but being knowledgeable on the opportunities is important. Apply the tips from the article above to your commercial real estate needs and you are sure to be on your way to maximizing your profits.
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Source: http://loanstop20.com/2012/07/30/a-guide-to-successful-commercial-real-estate/
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