Whether you are just starting out in commercial real estate or if you are a seasoned pro, the field is full of potential mistakes that can end up costing you a lot of money. The team at Golden Century Lending has put together a primer on what to look for and how to avoid it so you can get the most out of your investment properties.
1. Always pay attention to the location
There is a reason why “Location! Location! Location!” is such a common phrase in the commercial real estate industry. Property location goes beyond population demographics, tax brackets, and traffic. Commercial real estate investors should also look at expansion space, safety, and any plans for new construction in the area before purchasing or selling a property.
2. Never let emotions get in the way
Too many commercial real estate investors make purchases based on emotions, whether it is the result of a nostalgic attachment to a neighborhood or because they got embroiled in a bidding war. Always keep your emotions in check and listen to your data and budget instead.
3. Look beyond public listings
Public listings are a great place to start looking for commercial real estate opportunities, but that’s just scratching the surface. Make connections with wholesalers, brokers, and simply talk to people in a given community to learn about properties that are for sale, but not in the public listings.
4. Always take upfront costs into consideration
Upfront costs can eat into your budget, especially if renovations and construction need to happen. Overlooking upfront costs can come back to bite you after the sale is completed.
5. Buying sight unseen properties
If you are new to the commercial real estate arena, buying properties sight unseen is a good way to land yourself in the middle of a money pit. Always ask to see if you can take a tour of the property, either by yourself or with an inspector, to get an idea of the repairs that need to be made and the cost.
Golden Century Lending provides tailored Financing solutions for commercial real estate. Contact our offices to get the funding you need.