Buying Commercial Real Estate – What You Need To Know For A Wise Investment

As a real estate investor who transitioned from no-money-down rental homes to investing in commercial real estate, I have seen a lot of different trends and tactics and have tried many of them. My partners and I do a lot of different types of real estate investing. If you would like help getting started in commercial real estate, we may be able to help you. We offer flat-fee consulting services to help you with things like finding property, analyzing the numbers, and performing due diligence, as well as helping with more general things like financial planning and determining how real estate fits in with your overall financial strategy. Buying a piece of commercial real estate is a big step and it can definitely help to have another set of (experienced) eyes, looking over your thought process.

If you need help, please click here for more information on our commercial real estate advisers services.

An Example Commercial Real Estate Story

Who knows, this could be your story soon.

A lot of people talk about how hard it is to start your own business, but for the most part it has always been easy for me. I guess I have a knack for business. It runs in my family after all. My father, my grandfather, and even one of my uncles were all businessmen themselves. None of them depended on the others either. They all started their own businesses as a way to prove themselves. I inherited the tradition, and I did very well. Buying a franchise wisely, hiring the right employees, advertising and marketing – all of this was easy for me to do. The one thing that was always difficult, however, was picking out commercial real estate.

The thing is that the commercial real estate you get is absolutely crucial. If you hire the wrong people, you can always fire them and get new ones. If you buy the wrong franchise, you can always convert it into a different kind of store. With commercial real estate for rent, however, things are much more difficult. You need to balance a lot of different factors to get things right.

You see, when you buy commercial real estate, you want to be as central as possible. You want your business to be in a location that is convenient for all of your potential clients. That way, you will be able to benefit from foot traffic as well as planned excursions to your place of business. The problem is that the more centrally located a piece of commercial property is, the more expensive it is going to be to buy or lease. Commercial leases can be tens of thousands of dollars a month. Sometimes, they can even be hundreds of thousands for a moderately sized store. This translates into a significant investment just to stay there from month to month. If you invest in the wrong commercial real estate, you might not get a second chance. You could be bankrupt before you ever get on your feet.

Still, although the wrong piece of commercial real estate can break you, conversely the right one can make you. Even a mediocre restaurant, store, or arcade in the right location will do very well for itself.

Location Is Important In Commercial Real Estate Investing, But That’s Not The Only Thing

The truth is, it’s a little more complicated than the above story makes things appear. You’ll need to take into consideration a lot of factors when you’re buying your first piece of commercial property. Try to start small… maybe a half million dollar property would be a good starting place, so you can get the lay of the land, get your feet wet, and make mistakes without having a giant, highly leveraged property looming over you.

Good data is a big part of the battle – that’s the main thing you can do to mitigate your risk. Plan ahead, prepare for down times, and get good advice going in. Sometimes the best commercial real estate deal is the one you DON’T do!

Remember, if you need help, our commercial real estate advisory service is here to help.

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