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Deciding to Buy

Commercial Real Estate Sign Represents Property Leasing Or Realestate Investment. Includes Offices And Land Leasing - 3d Illustration

Buying commercial property is a lot more challenging than purchasing a typical residential single-family home. While the potential financial rewards are great, investing in commercial property requires meticulous planning and careful organization to achieve the best results. Start your commercial real estate investment right by learning the basics.

Here’s everything you need to know about buying commercial property in California:

Reasons to Invest in Commercial Property

Commercial real estate gives buyers and investors the opportunity to diversify their portfolio and hedge against the instability of the stock market. In addition, buying commercial property is worth your while because:

  • You can lock in costs. When you purchase commercial property with a fixed-rate loan, you will be able to accurately predict future expenses. With increasing rental prices, you can rest assured that your costs will not fluctuate.
  • There are tax benefits. As a commercial property owner, you will be entitled to tax benefits such as interest depreciation, amortization expense, favorable capital gains treatment, and deductions from your mortgage interest and property taxes.
  • You have more options. Commercial properties come in all shapes and sizes. You can invest in office spaces, retail shops, malls, and apartment buildings, to name a few.

Factors to Consider When Searching for the Perfect Commercial Property

In order to reap the rewards of your investment, your commercial property should pass muster when it comes to:

  • Location. The success of your commercial property investment relies on the oldest real estate mantra in the book – location, location, location. If you are buying a multi-family apartment building, the neighborhood in which it is located will have a huge impact on the number of tenants you will be able to attract and the rent you can charge.
  • Zoning and limitations. Familiarize yourself with state laws, zoning rules, and building codes in your target areas. If you would like to purchase an apartment building in California, for example, think about how the state’s new rent control law may impact your investment. Find out the extent to which you can modify the existing property according to local zoning laws.
  • Physical condition. Inspect the property thoroughly before finalizing any deals. Look for any potential environment and liability issues like lead paint, asbestos, or mold.
  • Opportunity for growth. Consider the property’s potential for expansion or resale so you can truly make the most out of your investment.

Tips on Buying Commercial Property in California

Follow these tips to make sure your commercial property purchase is a success:

  • Enlist the help of expert commercial real estate advisors
    To get the most out of your commercial real estate purchase, it’s best to get the help of professionals. With their guidance, you will be able to identify the asset that meets your real estate goals and receive advice on how to grow your investment. Find an advisor who knows about your target areas and can connect you with exclusive opportunities.
  • Do your research
    Learn about the commercial market in your target locales. Look into vacancy rates, property prices, rent averages, and average capital rate.
    Consult your real estate advisor on up and coming areas with the greatest investment potential. Discuss the pros and cons of investing in a future development as opposed to putting your money in a current commercial hot spot.
  • Figure out how to finance your purchase
    Discuss the best way to finance your commercial property purchase with your accountant and real estate advisor. At R&Z Real Estate Advisors, we have a range of financing services to meet your needs.

    Paying for your property in cash will speed up the process but may entail long-term risk. Borrowing money, on the other hand, leaves you with more cash on hand, entitles you to tax advantages, and allows you to build equity.

  • Undertake due diligence
    Once you have decided on a property, remember to check the overall condition of the property, as well as the building’s history. Examine the property’s security for potential liabilities. Look into past insurance policies and ask your advisor to aid you in your assessments. Consulting with a professional is vital during this stage of the buying process.
  • Create a strategy for your purchase
    Follow an action plan if you want to speed up the buying process. From figuring out how much you’re willing to invest on your commercial purchase to narrowing down your options, strategy is essential. Consider your investment objectives and work with your real estate advisor to achieve your goals.

Achieve Your Commercial Real Estate Goals with R&Z Real Estate Advisors

With expertise, experience, and resources from Compass Commercial, we can bring you closer to your real estate investment goals. Contact us here 650.391.1758 or call us at (Tony) and 650.391.1781 (Ray) to learn more.

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The Commercial Real Estate Buyer’s Checklist

Buying commercial real estate in California entails a great deal of paperwork and requirements. To make things more complicated, no two transactions are ever the same, so what worked in a previous transaction might not for the next one.

So whether you’re a first-time buyer or a seasoned property investor, this checklist will help you get ready to negotiate and secure financing. It covers the main aspects of a commercial purchase, including buyer representation, due diligence, and paperwork.

Having a checklist on hand will not only expedite the process; it will also help protect your interests and prevent costly mistakes.

People with plans ofinvesting in commercial real estate may not always have cash on hand to make the purchase. This is why it is important for them to know aboutfinancing options available to them.

How to finance commercial property

Among the wide arrayof commercial real estate loan options, the most popular include the Small Business Administration (SBA) 7A Loans, CDC/SBA 504 Loans, Conventional Mortgage Loans, and Commercial Bridge or Hard Money Loans.

The secrets behind the popularity of theseloans are the easy application and approval, as well as security. You must be forward-looking enough toknow which among these loans will most favor yourlong-term financial goals and challenges for the investment property. If you qualify for your chosen loan’sterms and are dedicated to seeing it through, then success in your investment can be anticipated

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