Tips for New Commercial Real Estate Investors
When you are new to commercial real estate investments, you will want to be extremely careful with your first purchases. Picking the right commercial property requires careful planning, the advice of experienced investors, several due diligence steps, and plenty of research.
Hiring an experienced South Florida commercial real estate attorney during your property search is beneficial for investors of all experience levels. A commercial real estate attorney can help you catch bad deals long before you finalize any contracts. Your attorney will also help you save time by narrowing down the available options to the ones that match your needs the best.
Commercial real estate is valued differently from residential real estate
Commercial real estate is valued mainly by cash flow while residential real estate is heavily influenced by the prices of other residential properties in the area. Two commercial real estate buildings in the same area can have very different potential cash flows and asking prices.
Although location certainly matters in commercial real estate, there are several other factors to consider such as the number of potential tenants, the market, and more. When trying to determine the value of a commercial property, ask an experienced investor or attorney for their opinion.
Stick to what you know
If you have experience with a particular sector in commercial real estate, you shouldn’t try to venture too far from it. Sticking with what you know will help to ensure that your investment is successful because you will have a better idea about the qualities of a property that will work the best for your sector.
For example, if you are highly experienced with the hospitality sector, you will be able to quickly narrow down the available properties to the ones that are most suitable for the hospitality business. By utilizing your experience, you are maximizing your strengths, and you’ll have a much better chance of picking a successful property.
Be patient with your investment
Patience is essential when investing in commercial real estate, especially when you are new to it. You should wait for the right property once you have identified the sector that you want to work in rather than rushing into a deal.
Assemble a team of professionals including advisors, an accountant, a south Florida commercial real estate attorney, and others who can help you filter through the available options, and pick the best property that offers the highest potential return and matches your requirements the closest.
Mark Schecter is a veteran commercial real estate attorney who can help you find the perfect investment property no matter what your experience level is. Contact Schecter Law today at (954) 779-7009 for advice regarding your next commercial real estate investment or for a consultation.