Tried-and-True Ideas to Profit from Commercial Real Estate Investing

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KEEP IN mind that Commercial property investing is all about the deal, the terms and the return on investment.

Below are a few key tips intended to give you a hand with your property investing.

Tip #1: Be an Investor not an Accumulator of Properties

The reason why you’re making purchases is to produce an income and a profit. And so, if you purchase real estate that produces minimal profit, then you simply accumulated property (as opposed to making an investment).

Tip #2: Recognize that all Commercial real estate has a Lifetime.

One of the greatest errors you can make as an investor is to ignore the reality that over time, you’ve got to spend money on refurbishing the building. It may need a whole new roof; or the electrical system might need to be upgraded.

Just about every building goes through these phases; some more so than others. Therefore, make sure you have a long-term plan to deal with such work.

Tip #3: Focus on One particular Commercial investment Sector at a time.

Particularly if you’re first starting out, you should target one sort of investment: Offices, Shops, Warehouses, or whatever. Every transaction needs and warrants your undivided focus. It’s safer to be master of just one, as opposed to just average over many. And who wants average-performing properties anyway?

Tip #4: Get a Mentor to gain knowledge from his or her past mistakes.

Mentors could save you from making costly mistakes; detect when you’ve overlooked due diligence points; and connect you with sources you otherwise wouldn’t have instant access to.

Tip #5: Make sure your assets are Adequately Safeguarded.

Unfortunately, law suits can occur; therefore, you should do whatever you can to shield yourself. And ask yourself the next questions to decide if you’re protected:

  • How is your property protected?
  • What do you have at risk, if you lose a lawsuit?
  • Is your very own property (for instance, your house) protected?
  • Are the alternative assets completely separate from each other so that one legal action doesn’t impact the other investments?

Don’t try to speculate, with regards to the answers to these concerns. Speak to a lawyer to ensure that you’re shielded, if you were ever to be sued.

BONUS TIP: In a Partnership or Syndicate, fund the deal through a non-recourse Mortgage.

Non-recourse means that you are not personally guaranteeing the loan.

This gives you two distinct advantages: it permits you to be taken off the mortgage in the event that the relationship goes wrong. And, if the property were to be unsuccessful, it won’t affect you personally.

 

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