Commercial Real Estate Investing – The Basics

When it comes to buying commercial real estate, you must follow the same clear Logistics Of Real Estate and trusted “rules” that are used for residential property investment.
All real estate investors need to research thoroughly before making a purchase so that they know, when entering into the negotiation phase, what is the right price to pay for any piece of real estate. This is the difference between the professional and amateur investor Why Do People Overprice Their Homes as the amateur will tend to let his heart rule his head and pay over the odds for a property because he “liked it.” The professional will have his facts and figures worked out in advance and will not stray from his numbers which is why he is successful.
The professional investor will know comparable purchase prices both in and around the area of the property in which he is interested. He will know the rental value that can be achieved for the property and will know the amount of the commercial mortgage he can expect to receive on the property. He will also know the value of the property which, as a professional investor, he will expect to be higher than the price he is willing to pay.
Being armed with this information, the investor can begin to analyze each property that he is offered and make a speedy, but qualified decision on them. His rejection of a property does not make it a bad property per se, but only that it does not meet his specific criteria and may meet those of another investor.
By following these simple steps, you can ensure that you are the person with the knowledge, not the agent of the person selling the property, and in the best position to drive the sale in your direction. By all means look for the win-win situation as the seller may have other similar property that you might wish to buy in the future, but none of this should be to the detriment of your deal
Finally, if you are unsure and looking to do your first deal, fins a suitable mentor who can give you commercial real estate advice. Most investors are flattered to be asked and will usually give their time and advice for free, or at most, a coffee and sandwich at Starbucks!
Dave P Thomas

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