Buying commercial real estate can be very intimidating to someone that has never done it before. It can easily lead to a bit of information overload because of all of the resources available to new buyers. Below are some tips to assist you in getting all of this information organized to where you can start buying commercial property smarter.
Utilize online reviews and ratings when comparing real estate agents. A lot of people will review an agent on various websites. People will also discuss any problems they may have had with the real estate agent. There can be a lot of useful information that can be found online through reviews. Be sure to check these out.
You should always consult an expert if you are interested in buying large amounts of real estate. There are many people out there that try to make plans to do large real estate deals alone and they inevitably fail. Have someone in your corner that knows what they are doing.
If you are a landlord looking to rent out a house or apartment, it is crucial that you have the tenant fill out an application and go through a credit and background check. You do not want to be stuck with a tenant who won’t pay rent or trash your house, so also ask for references.
It is important to find a bank that is willing to work with you when purchasing commercial real estate. Commercial real estate is viewed and valued by financial institutions in a different way than residential real estate. Expect to come up with a higher down payment as well, about 30 percent and sometimes even more.
Ask your future landlord, before signing a lease, whether they have an emergency contact phone number available. Some landlords leave for the weekends or holidays and if anything breaks within your unit, you’re out of luck for the time being. Make sure to discuss this with the landlord, in order to ensure that your problems are looked after quickly.
Find out what type of fee your broker charges before entering the agreement with him. They can require fees that include a percentage of the total price that the property sells for. They may not charge you a percentage but charge you a flat fee for services. Finding this out prior to contract is crucial.
Don’t accept the very first value you are offered. Almost all prices or bids have taken into account the fact that the other party will be interested in negotiation. Even if they have initially said they are not interested in negotiations you should be willing to try. Most likely that was just a strategy suggested by the opposing agent.
If you flip homes, you should always attempt to buy when the market selling prices are at their lowest. Even if this means you will have multiple properties to work on at one time, you will quickly find that these homes will bring you a fantastic profit when the buying market significantly improves.
Form relationships with your lenders in advance of trying to buy a commercial property. Commercial loans can be very different than residential loans. Knowing the terms and what you qualify for can help you to make smart purchases. It can also help you to determine what your down payment needs might be, and when you might need to consider bringing in an investor.
When going with a broker to check out a property, make sure to write down the questions that you intend to ask. List them in different categories to make sure that you get the most important questions answered. While you are there and then follow up with the rest of your questions after.
Write an easy-to-understand letter of intent, focusing on the biggest issues. You can worry about the little things later on. This approach lowers the overall tension level and actually makes it easier to reach agreement on the details at the end.
Emergency maintenance should always be on your need to know list. Make sure to consult your landlord about emergency repair responsibilities in your building or office. Know their phone numbers and also what their likely response time is going to be. Your landlord should be able to provide you a list of emergency contacts so that you can map out a safe and well organized emergency plan, in case an emergency happens during normal business hours.
It is important to research the companies that you could use for your commercial real estate needs. If you do not do sufficient research on a company, you may end up with a company that does not really care about you, but just what is in your wallet. Take the time to research so you have a good commercial real estate experience.
When you look for a real estate broker, you should look for certain abilities. You will need a broker that knows how to negotiate and stay firm on a position. You have to be able to trust your broker and be sure that they have your best interest in mind.
When looking for a broker, you can go to a generalist broker that will help you find out what kind of niche is best for you. You should then go to a specialist broker that already has connection on this particular market. You will need experts to assist you with your transaction.
Remember that the way you and your partners present yourself will go a long way in the negotiations. Come prepared with a suit and tie and look as sharp as possible when entering negotiations. This will help you garner respect from the seller for your prospective commercial real estate purchase.
Hopefully, these tips have provided you with some very valuable information, as well as given you a way to organize all of the thoughts and information you may have already had on buying commercial property. Keeping these tips in mind when you start buying can help you one day become a smarter commercial property buyer.
