7 Steps for Getting Commercial Real Estate
Commercial real estate is a great investment, but it requires hard work to make it pay off. Here are some essential steps you need to take to educate yourself about the business, select properties, and close deals.
Perform Some Self-Reflection
Before you dive in, you need to ask yourself some questions and make some decisions. Are you ready to take on the responsibilities of a landlord? Are you able to commit the time and energy to maintain a property? If not, are you able to hire people to handle this for you? Perhaps most importantly, are you in the right financial position to undertake a commercial real estate purchase and assume the risks involved?
Learn the Lingo
If you’re ready to move forward, you need to educate yourself about the commercial real estate industry. Seek out real estate vocabulary lists, study them, and read further about anything that doesn’t immediately make sense to you.
Visit and Evaluate Lots of Properties
As you begin your search, it’s smart to visit many, many properties. It’s a good exercise to objectively evaluate each, and learn the challenges and opportunities they present. This will help you focus what exactly you’re looking for.
Build a Team of Experts
Any commercial real estate owner must have a relationship with a lawyer, an accountant, a realtor, and a mortgage broker. Do your homework and seek out the best fits for you in your area. Don’t be afraid to be picky; these people will impact your business greatly.
Hardly anyone has cash on hand to buy a commercial real estate property, so you must work with a lending institution to craft a financing arrangement that works for you. Your creditworthiness will play a big part in this. Also, the more you can put towards a down payment, the better.
Build an Offer
If the team is assembled and the financing is lined up, work with your lawyer to build an offer to the property’s owner and present it. With a little bit of luck, a reasonable offer may be accepted right away, but be prepared to negotiate.
Perform Due Diligence for Closing
Once the offer is accepted, there is still lots of important work to be done at closing. Set up the proper surveys and evaluations, verify everything that is being sold has been accurately depicted, and work with an escrow officer to hold funds and settle disputes.
This is the process in a nutshell. If you are successful and enjoy it, you may be able to make a great career of doing it again and again!