5 Things You Should Know Before Buying Your First Commercial Property

Buying your first commercial property is no easy feat. There are many factors that go into creating a high-value transaction and countless ways to end up in the red if you make the wrong moves. The editors at Real Estate Wired put together a list of things you should know before buying that first crown jewel in your portfolio:

  1. Look for Properties With Problems That You Can Solve
    • When buying that first commercial property, we need to look out for value, which can be found by solving problems that the current landlord does not want to deal with. This is where the juice is!
  2. Location, Location, Location
    • In a commercial deal, the WHERE is just as important as the WHAT. If it is in a city, make sure the property is situated in an area that is accessible to transportation and conducive to shopping.
  3. Don’t Shy Away From Violations
    • When I bought my first commercial property there were over $100K in violations, but through my due diligence, I knew that I could rectify these issues within a year’s time. This gives you leverage to buy a property for a fraction of what it’s actually worth.
  4. Speak With Someone Who Has Gone Through The Process
    • Experiential advice can go a long way when going through the acquisition process. Many nuances in purchasing can only be discovered by going through it.
  5. Be Proactive in the Mortgage Process
    • Don’t be a bystander in the mortgage process. It’s important to understand the equations that are used to evaluate your affordability options. You can even go as far as doing the work FOR the mortgage broker by providing your own comps. One thing that you can always count on is that people are lazy.