Ten Tips For Investing In Commercial Real Estate From CRE-Finance LLC
The demand for commercial real estate has grown in recent years.
Online, April 19, 2014 (Newswire.com) - Commercial real estate seems to be a quick way to obtain a higher return on your capital but this may not always be the case. The demand for commercial real estate has grown in recent years, it can be very risky for first timers. Whether you are a first timer prepping to start investing in commercial real estate or want to make the move into commercial real estate from residential, Todd Tretsky, of CRE-Finance.com wants to share the following tips that should help you make the right investment decisions:
1. Do Not Hesitate From Thinking Big
Larger commercial properties may require a bigger investment, but they reduce risks and have a greater potential when it comes to ROI. Buying a small office or a shopping outlet may not turn out to be as profitable as buying multiple offices or shops.
2. Stay Patient
It may take a long time to purchase, renovate, and sell a commercial property than a residential one. You need to make sure that you do not lose your patience and jump into a wrong decision. Consider this investment as your retirement plan or big bonus, which will take time to reap the results, not as a way for quick cash.
3. Consider Your Options
Most investors are usually comfortable with buying apartment properties and they may recommend the same to you. Consider other commercial property options as well before you make a decision, such as office buildings, industrial etc. everyone has their unique goal and you need to fulfill yours.
4. Be Prepared To Invest Time
Don't get discouraged if it takes too long for you to cut your first deal or you're spending more time per deal. Your experience will help you build a learning curve and get better. Just fight the temptation to get discouraged for the first few months.
5. Learn New Formulas
When you set foot into commercial real estate, be ready to learn the new formulas and the jargon associated with the industry. For example, you may have to be acquainted with Cap Rates and Net Operating Income.
6. Take Your Relationships Seriously
Building relationships with private lenders and investors is very important when buying or selling commercial property. You will find more deals easily, if you know more people in your network.
7. Find Financing In Advance
Commercial loans are different from residential loans, as down payments are a higher percentage than loans on single-family houses requiring you to put down more money. Find the best lenders beforehand to use when you make an offer. The mortgage professionals at CRE-Finance can help you with your commercial financing needs.
8. Be Prepared To Incur Due Diligence Expenses
You may or may not cut a deal but due diligence will cost you a lot of money after your offer is accepted. It is also important to see it through for example, property inspection. Be prepared for such expenses.
9. Partners Are Your Bridge to Wealth
Not everyone can buy a million dollar property on their own, so spend some time in finding good partners such as brokers, lawyers, and real estate agents etc. to help you out.
10. Seek Help Regarding Tough Questions
Lastly, it is important to associate with experienced commercial investors to understand the intricacies and to clear any doubts. Know who you can rely on to answer and help you when you need a quick advice and make friends with them.
If you have any questions regarding commercial real estate or are seeking financing, contact Rich or Todd at 855-515-5585 or visit us at www.cre-finance.com.