San Antonio investors may be feeling the urge to invest in the commercial real estate market. However, if you've never owned or purchased a commercial real estate property before, it can feel overwhelming to sort out what you should and shouldn't do. This is why it can be beneficial to have a real estate lawyer by your side during every step of your transaction.
In addition to having an attorney to represent you, there are several steps you should consider taking while shopping for the right property:
- Get the insider's advantage: Novice real estate investors will want to learn as much as they can about the real estate market. You'll want to know, for example, how investors assign value to a real estate property. Unlike residential property, commercial property receives its value based on the amount of square footage that is available to rent. Another trick you should know is that purchasers who have cash on hand -- usually 30 percent of the property value -- will have a better chance of getting approved for a loan.
- Create your action plan: Armed with the tricks of the trade, you'll next want to create an action plan. This involves getting clear about your budget. What properties are within your budget? What do you need to receive as a return on your investment? How much income do you need to make in order to afford your mortgage? Does the property already have tenants under contract, and how many? Do you plan to manage the property yourself, or will you form a relationship with a real estate management firm?
- Know a good deal when you see one: Take time to assess the value of your prospective purchase. Keep a close eye on damage that you'll need to repair and how much that will cost. Check that the property is appropriately zoned for your intended purpose. Check for hidden costs. Calculate the income you need to receive, the cost of the mortgage and how much your profit should be.
Evaluating a real estate property can be complicated, but with a skilled real estate lawyer on your team, you can minimize investment risks and handle your transactions in a legally appropriate manner.
Source: Investopedia, "7 steps to a hot real estate deal," accessed Sep. 21, 2017