Getting Your Investment Team Together
September 13th, 2013 by Tatyana Levin
Commercial real estate can be an amazing investment, but finding the right property and closing the deal can be a challenge, especially if you’re going it alone.
Commercial real estate is big purchase that requires a lot of paperwork, finding, and commercial investment knowledge, so anyone, especially first time buyers, would profit from some help.
But the question is who do you turn to?
A successful commercial real estate deal requires a buyer and four people:
- A commercial real estate broker
- An attorney
- An accountant
- A mortgage broker
A commercial real estate broker is your first line of attack. A good one will be able to find you a good property in your price range and especially in a good location.
And yes, brokers are supposed to know the city that they work in, but remember that they aren’t psychic and can’t predict property value in the very long term. They can only use the information that they have and past trends that they are aware of. This means that even in commercial real estate there is no such thing as a sure thing.
An attorney is necessary for dealing with the legal side of things. For example you might be buying a building with tenants who have existing leases. Whether or not you are allowed to change certain terms like rent or if you are obligated to keep leases in tact until they expire organically.
When buying commercial property, there are tons of contracts to sign, and the last thing you want to do is sign them without having a lawyer look them over first.
An accountant is always important to have around, but it’s especially when large sums of money are being thrown around.
Not only can buying a commercial property be expensive, it will also change your taxes, so it’s best to consult with an accountant before you claim a large investment and maybe even put yourself in another tax bracket.
Neither the buying process nor the financing process for buying a commercial property is the same as it is for buying a residential property. It can be very confusing, especially if it’s your first time buying commercial property.
That’s why it would be nice to have a little guidance with the help of a mortgage broker where the financing is concerned. And you shouldn’t necessarily wait until you’ve found a property and are looking for financing. A mortgage broker could help you estimate how much financing you can receive for different types of properties.
A good team will help you find and finance a good property legally and wisely.