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What You Should Know About Commercial Real Estate

September 29th, 2012 by

Look for a myriad of financial allies, from family members and friends to professional lenders who can help you come up with the necessary cash to buy commercial real estate. Come up with a contract where you have to pay back the loans either with a fixed rate of interest, or via a certain percentage of the property income. Watch for motivated sellers. Sometimes you will find sellers who are willing and able to sell well below the market value. Until you locate a great deal, nothing moves one way or the other when it comes to real estate. Once you identify a great deal, it is usually offered by a seller who is eager and very motivated to sell. Every property will have a lifespan. It’s important to factor maintenance costs into your projections of what you’ll need to spend on the property over the long term. Properties may need expensive repairs. For example, the electrical system may be faulty or out of date, or the roof may require replacement. All buildings have these kinds of requirements, depending on the specific building, some may require more repairs than others. Make sure all these repairs are included in a long-term plan for the property.

Develop close relationships with lenders and other investors when purchasing commercial real estate. You may be interested in buying a property that is too expensive for you to purchase on your own; having a good relationship with another investor will allow the two of you to team up and buy something that you couldn’t have acquired otherwise.

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