Learn How to Invest In Commercial Real Estate with These Ideas

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Buying commercial real estate can be very intimidating tosomeone that has never done it before. It can easily lead to a bit of informationoverload because of all of the resources available to new buyers. Below aresome tips to assist you in getting all of this information organized to whereyou can start buying commercial property smarter.

Remember when buying commercial real estate that the loansare structured differently than residential real estate loans. Buying a triplexis the same as buying a commercial property and it is not eligible for aresidential loan. So remember when looking for commercial property, know thefacts on commercial real estate loans before buying.

Make a careful selection of the broker you are going to use.Take the time to get to know him and find out if your interests are going to beyour broker’s first priority. If the broker does not agree with yourobjectives, move on to interview the next broker on your list.

If you are in a partnership situation with commercial realestate, you should get a non-recourse loan in order to protect yourself.Non-recourse means that you are not personally guaranteeing the loan. This isimportant because it allows you to be removed from the loan if the partnershipdoesn’t work out.

When you are purchasing commercial real estate, make surethat you use a broker who has a lot of experience in the field. You will wantsomeone who knows what they are doing to maximize your potential of getting thebest deal. This will save money and elevate the value of your purchase.

If you are planning on investing in an apartment complex,think big. The more apartment spaces you have to rent, the greater your profitpotential. Think of it this way; as long as you have to take out a loan tofinance the building, you may as well make it worth your while. Not only canyou earn more money with a larger building, but in most cases it is no moredifficult to manage than a smaller building.

Consider whether to manage your rental property on your own,or through a rental agency. On your own may be less expensive, but if there areproblems in the future with unpaid rent, damages, or lawsuits, you will be gladto have someone on your side. Not to mention the inconvenience of having tofind a plumber at 2am when the pipes freeze. Let someone else deal with theheadaches.

Learn the new formulas that run commercial real estate. Justlike how you use formulas such as the 75% rule when buying houses, commercialproperty will have new and different formulas to get used to, like NetOperating Income and Cap Rates. Make sure you’re familiar with them in order tomake a good deal.

Hopefully, these tips have provided you with some veryvaluable information, as well as given you a way to organize all of thethoughts and information you may have already had on buying commercialproperty. Keeping these tips in mind when you start buying can help you one daybecome a smarter commercial property buyer.

StephenCanjar is President/Owner of Peak Performers Realty Inc. Niagara.


“Consulting with you on your real estate needs is something Itake seriously.  With almost two decades of experience serving the entireRegion, you can rest assured that all your real estate needs will be well takencare of.  Each client is supported by a TEAM of agents, administrators,full marketing, and modern day technology second to none…all working togetherfor you. Let me show you what a difference quality service can do for marketingand getting your home sold.”  Get Listed. Get SOLD. With Stephen Canjarand www.movingniagara.com

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