Taking the steps to owning a commercial real estate property can be a long process, but a very rewarding process. Whether you are looking for a large apartment complex or something smaller, here are four tips to help you along the way.
1). Know what you are looking for
The first step you need to take before your purchase a commercial property is to know what you are looking for. In order to know what you are looking for you have to ask yourself some important questions such as: what kind of location do I need? How much can you commit to the property? How much work/maintenance are you willing to put in? Are you ready and willing to make an investment of this size? Ask yourself these questions and more to know if your time to buy is now.
2). Learn the Lingo
When you begin your search for commercial real estate, you will run into a lot of vocabulary and acronyms you are going to want to familiarize yourself with. Here are a few to get you started:
Loan-to-value (LTV): Ratio of lender vs. total value of purchase
Debt Service Coverage Ratio (DSC): how much debt you will be able to cover every year
Capitalization Rate (Cap Rate): income of property / total value of property
Ad Valorem: A tax on the assessed value of property
3). Figure out your Financing
Most people will need to get some help to be able to purchase a property. If this is the case, you will want to find out what bank/credit union/mortgage company you are going to use. What will be your interest rate? If these financing methods aren’t for you, there is more than one way to finance a commercial real estate purchase. Contact Moncayo Homes to help you see other options that could be available.
4). Call Gay-Lynn Barnes for the Expertise you’ll need
Buying commercial real estate can be a long process. Some properties can get a little complicated. With struggles along the way, let Gay-Lynn Barnes and her team help you achieve your commercial real estate venture.
If you are looking to fulfill a commercial real estate dream, let Gay-Lynn Barnes help you along the way.