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How to Invest in Commercial Real Estate

Posted on: July 22nd, 2015 by John Lin No Comments

Investing in commercial real estate can be a very successful endeavor for those who are willing to spend the time and effort in researching available properties, developing networks in the real estate community and identifying the right type of investments.

Deciding to invest large sums of money involves thinking on a larger scale regarding commercial investments since it is valued differently than residential property. Income from commercial real estate is directly related to usable square footage unlike residential property. There will typically be a larger cash flow with commercial property because you will earn more with multi-tenant dwellings.

If you are ready to advance into larger, more profitable deals in the commercial real estate industry, there are some important points for consideration:

  • Finding the right deal – finding your first deal can take longer than expected so do not get discouraged too quickly. Researching and screening deals and putting offers together takes time, patience and diligence. Once your first deal is done, you will have the experience you need to move on to the next one.
  • Networking with private lenders & investors- networking and building relationships with investors and private lenders is crucial with commercial properties because you are dealing with real estate costing one million and up, and you will be working closely with people in your network. Buying million dollar properties, most people can’t qualify on their own and need assistance from private lenders or deal partners. They will also have experienced input when searching for deals on properties.
  • Take the time – buying commercial real estate takes longer than residential homes. Researching and screening deals can take many months or years before you come across the right property. Keep this in mind when you are making decisions about selecting properties to purchase. You don’t want to rush into a bad decision or the wrong deal. It can be thought of as working towards your retirement portfolio rather than a means for quick cash.

These guidelines will help you gain the right perspective when searching out the right deals to successfully invest in commercial real estate.

Contact jlin@capstarco.com to assist with new and existing business acquisitions and sales transactions.

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