Success Tips for Working in the Commercial Real Estate Industry
Real estate has been a popular pathway to financial profit for decades, so much that the market gets flooded with realtors from time to time. Commercial real estate is an even bigger ball game, with larger properties and bigger fallouts at stake. For those with little to no experience in buying large properties and who are looking to get started, the expert tips below will provide a solid understanding of what it takes to be successful in commercial real estate.
Be Prepared for Things to Take Time At First
Because commercial deals generally take longer than single-family house deals do, it is important to remain patient and avoid making hasty business decisions. Because of their sheer size and law requirements, commercial real estate deals require longer purchasing negotiations, renovations, and often take much longer to get sold.
Maintain Professional Relationships via Networking
Keeping your professional network active is crucial when working with commercial real estate. Getting to know and collaborate with private lenders and investors will open the doors to available properties the general public may not have knowledge of or access to, as many commercial properties are sold before they are even listed online. Make sure you spend much of your time finding and building relationships with deal partners who can assist you financially. If you have more people in your network who know what kind of properties you’re interested in, you’re already way ahead of other realtors in the business.
Be Prepared to Pay Your Due Diligence
After your offer to purchase a property is accepted, it’s time to pay your dues, in a sense. These dues come in the form of property inspections, appraisals, and other law-required tests and inspections. Because of the size difference in single-family versus commercial properties, the expenses associated with commercial properties may leave some wanting to run for the hills. Commercial property buyers should be willing to spend $5,000 to $10,000 on post-purchase expenses.
Don’t be afraid to go big or go home! Commercial real estate investors who are new to the game may be tempted to start out with smaller units, such as a 5-unit apartment complex or a 7-unit commercial building. Experts say this isn’t the way to go. Instead, try going for properties with at least 10 units to see the financial benefits for yourself. A crucial benefit to purchasing large properties is that the more units you purchase, the cheaper they become per unit, saving you money in the long run.