Everyone should have a balanced strategy when investing in commercial income property.
Diversification is at the top of the list including such sectors as stocks and bonds, gold and silver and commercial real estate income property.
When one group fails the other groups can pick up the slack.
What Is A MUST Before Buying Commercial Income Property?
Commercial real estate investing in income property becomes a safer avenue with steady income then perhaps playing the stock market. Of course, safety comes with professional advice. So start off contacting a professional real estate broker with years of experience in that sector that you have chosen.
Here’s what you and your professional real estate advisor need to work on:
- After a brief discussion with your professional advisor, try to figure out the amount of equity and borrowing power that you would prefer to utilize. It is essential to determine the return on equity plus risk-reward tolerance level before deciding to move forward.
- Ask your professional for some examples of different sectors of commercial income properties and what the differences are among the groups.
- Decide which sector you would like to venture into and select three or four income properties that look like possibilities. Discuss the good, the bad and the ugly about each opportunity and narrow your choices down.
You’ve Made The Decision For Your Commercial Income Property – What Is Next?
When you have made a decision, submit a letter of intent through your professional broker and hope that the seller accepts the offer. When the offer is accepted, have your professional real estate attorney draft a real estate contract to follow the lines of the LOI.
A normal 30-day due diligence is usually the proper time frame to study the property’s valuation. During this period, check with your CPA for tax guidance. Also, line yourself up with a top commercial lender so that you can decide what type of loan you will want to proceed with.
