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7 Attractive Commercial Real Estate Investment Tips

Kevin Brunnock | Real EstateOrchestrating a commercial real estate exchange is simply a matter of evaluating the best property deals, scouting the right help, and using informed insider knowledge to help you tap into success. 

Performing efficiently as commercial real estate professionals requires that you learn commercial real estate vocabulary, that you do the homework, find experts, figure out your financing, make an offer, and practice due diligence, but there are a few other rules you should live by:

  1. Don’t accumulate commercial properties, be an investor. Producing income or profit is the primary reason people become interested in purchasing new property. If you acquire property without turning a profit, you aren’t making an investment. Being an investor means being able to instigate accrual.
  2. Every property has a shelf life, a lifetime. Many investors make the mistake of forgetting that money must be spent on the property for upkeep. A building may require an updated electrical system, or a new furnace or roof. Every building must be maintained, and there have to be long-term plans in place to handle repairs.
  3. When starting out, you have to focus one particular type of investment. There are different types of investment, ranging from offices to retail to land to apartments. Every deal requires undivided attention. Otherwise, this could result in some average-performing.
  4. Environmental concerns can over be an issue for commercial property owners. Property owners are individually responsible for fixing problems, even if they aren’t the one who caused those problems. Ownership means shelling out the cost of cleanups, disposals, and environmental assessments.
  5. Mentors can offer guidance in the face of mistakes. They can pointedly connect you with valuable resources, correct errors regarding due diligence, and grant access to opportunities.
  6. Be sure to protect yourself and your assets. In the case there’s a lawsuit, be sure that you find a lawyer and ask yourself some questions. Figure out what’s at stake if you lose a lawsuit, how is your personal property protected, and how real estate investments may impact your other investments.
  7. Attempt to finance your real estate deal with a non-recourse loan. This means that you shouldn’t personally guarantee a loan, which offers two advantages. Them being that you’ll be taken off a loan if a partnership collapses, and if the property fails, then you won’t be personally tied to that failure.

Learn what insiders know, map out a plan of action, get familiar with the major commercial real estate metrics, look for motivated sellers, and discover the fine art of identifying vacancies.

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