How To Buy Commercial Real Estate In A Down Market

The recent recession has presented many opportunities to those who want to buy commercial real estate. Real estate prices are depressed, and interest rates remain at all-time lows. The question is, however, how do you find the best deals in a depressed market?
The first thing that you must do is determine why a commercial property is for sale. Is it a financially strained owner, or is it a distressed asset?
Distressed Owner vs. How To Price Your Home To Sell For Top Dollar Distressed Asset
A distressed owner can be defined as someone that needs to sell assets quickly to raise money for other obligations. With the recent fluctuations in the economy, many building owners have found that they need to quickly liquidate some of their smaller properties to manage their larger ones. This creates the perfect opportunity for someone wishing to enter the commercial real estate market.
Distressed owners are usually open to creative financing arrangements or will offer rock-bottom pricing just to unload the property. Skillful negotiations will allow a buyer to obtain these properties at below market pricing.
A distressed asset is an asset that is not performing at peak levels. For example, a strip mall with low occupancy rates is considered distressed. Many real estate owners are willing to sell these properties for a significantly reduced price because they do not wish to spend the time and money to fill the available suites.
Again, distressed assets present a great opportunity for investors to secure commercial property at very low prices.
What To Look For When You Buy Commercial Real Estate
When you buy commercial real estate, you must take into consideration the future potential of the property. While the price and interest rates may be significantly low, if the property has little future value, it may be a property you wish to bypass. Conduct a little research on the surrounding area before you commit to purchase to make sure the deal is as good as it appears.
Additionally, you will also want to research taxes on the property. The high property taxes will force you to charge higher rental rates, and if these rates are not competitive in the area, your property may sit empty for extended periods of time.
Finally, you will want to check the property against current zoning laws and building codes. There are some cases where a property becomes distressed because Steps To Buying A House 2019 the owner is not interested in making the necessary changes to bring a building up to code, or cannot find renters under the new zoning guidelines.
While all of these conditions may make you not want to buy the property, you can also use these flaws to your advantage. Having knowledge of the taxes, zoning and building codes, and even future potential on the property will help you negotiate a further reduced price.

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