Do Your Homework Before Considering Commercial Investment

If you’re thinking about investing in commercial real estate, always keep in mind the “five P’s”:

Prior planning prevents poor performance.

Most people who invest in rental or commercial real estate don’t spend near enough time thinking about what their intent is and what they expect, nor do they do enough research to help ensure a successful venture.

To help you determine which commercial sector - and ultimately, which specific property - to invest in, may I advise you to consider these things:

• Why are you investing? Retirement? A steady stream of income? Long-term growth? College funds for your children?
• How much cash do you have for a down payment?
• Where is your investment capital going to come from?
• What return on investment do you expect?
• Do you want immediate income or a return years down the road?
• Do you have a plan for managing the property?

Without knowing the answers to these questions, you’re flying blind and have little chance of a satisfactory outcome. But once you have these factors in mind, you can get more serious.

A good first step is to contact me. In addition to myself, my Partner is a trained, experienced commercial real estate professional can be a valuable member of your team, which should also include, at the minimum, an attorney and an accountant – all of whom we can help you hire.

Most investors get caught up in the glamour of the transaction, but, being a good real estate professional, we can do the detail work that needs to be done. There are many commercial sectors to choose from – including retail, office, vacant land, manufacturing, warehouse, medical and multifamily residential. We can help you evaluate your specific needs and choose the right investment for you.

Commercial real estate professionals also know their market.

“Is it an ascending market? Very few are right now. Of course, that doesn’t mean you shouldn’t invest, but you must go into an investment with your eyes open.

You also must understand aspects of your market’s demographics – whether the population is growing or declining, the average age and income of the populace, and so on. And you must understand critical factors in the commercial marketplace, including economic trends, vacancy rates, lease/rental rates and so on.

You know the old adage: Ready, Aim, Fire? That doesn’t work out too well. We can keep you from going off-track.

This information may not be applicable to all areas. CONTACT ME for expertise tailored to your local.