Investing in Commercial Real Estate | 5 Tips for Success

Define Investment Goals:

  • Objectives: Income generation, long term appreciation, or a value add (remodel and fill vacant space) flip. 
  • What level of risk are you willing to take?

Utilize Market Experts: 

  • Utilize people who understand the regional real estate market trends, understand risk, and have strong connections across the market. 
  • Do inspections and identify deferred maintenance.

Explore Financing Options: 

  • Explore various financing options, including traditional mortgages, commercial loans, and seller financing.
  • Understand the terms and conditions of financing, including interest rates, loan-to-value ratios, and debt service coverage ratio.

Evaluate Tenant Quality:

  • The quality of tenants can significantly impact your investment. Evaluate the creditworthiness and stability of existing tenants.
  • Consider the lease terms, expiration dates, and renewal options.
  • Is it easy to re-tenant? Are the spaces plug and play or will they require expensive build out.

Implement a Solid Property Management Plan:

  • Whether you handle property management in-house or hire a professional management company.
  • Regularly inspect and maintain the property to address any issue.
  • Maintain strong tenant relationships. 

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