Property is purchased every day by commercial real estate investors. These investors aim to make a profit by making necessary changes to the property and then either selling it or using it for business purposes. While this may seem like a daunting task, it is not as difficult as it may seem. To get started as a commercial real estate investor, read on for some valuable tips.
Utilize Your Property for Advertising
If your future rental property or apartment complex allows it, consider hosting a yard sale or garage sale. You can ask the property management if you are allowed to post signs within the complex, such as on light poles or tree stumps. However, be aware that some property managements do not allow any sort of advertisements to be displayed publicly.
Don't Be Afraid to Go Big
When buying rental units to turn into a commercial business, do not be afraid to go big. In many cases, the minimum number of units per property that requires a commercial license is low enough that you will want properties with more units than that. It is only slightly more difficult to manage 25 units compared to 5 units.
Be Prepared for a Longer Process
Buying commercial property takes more time and involves a more complex process than buying a house. However, this complexity is necessary to ensure that your real estate investment yields a high return. Keep this in mind as you navigate the process.
Buy More to Save More
When purchasing commercial property, it is often more cost-effective to buy more units. Why go through the hassle of purchasing a property with only 10 units when you can purchase one with 25 units for a lower cost per unit? Since you are already going through a lot, you might as well go for a larger property.
Know When to Walk Away
The most successful commercial real estate investors are the ones who can find a good deal and know when to walk away from it. Have an exit strategy in place and know how to calculate your minimum acceptable levels for payoff, returns, and projected cash flows. No matter how appealing a property may seem, do not hesitate to let it go if it does not meet your expectations.
Network and Market Yourself
Make sure to have business cards on hand and pass them out to everyone you meet. You never know when someone may call you with advice, a tip on a property for sale, or even to ask you to represent them as their investor. Business cards are an easy way to get your name out in the real estate world.
Ensure Basic Utilities are Available
Before purchasing a commercial property, confirm that basic utility services are already in place. Beyond electricity, you will also need water, sewer, and gas for your business.
Advertise Locally and Beyond
When selling your commercial property, make sure to advertise both locally and out of town. Many sellers mistakenly believe that only local buyers are interested in purchasing properties. However, private investors may be interested in properties outside of their area if the price is right.
Work with an Experienced Real Estate Agent
If you are trying to sell your commercial property, it is important to hire a real estate agent with experience in commercial real estate. Some agents may be new to the commercial real estate game and may not be able to