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Investing In Commercial Real Estate

Are you interested in investing in the commercial real estate market? As far as investing is concerned, investing in commercial real estate puts you in a superior position. There are a great many commercial real estate opportunities available to investors across the nation.

It goes without saying that the complexity of commercial real estate deals is much higher than that of the standard residential deal. Here, we will focus on the most important factors of investing in commercial real estate.

Property Types

There are a variety of commercial property types available to real estate investors. Each property type has its own benefits. Below is a detailed list of the various types of investment property types:

  • Multifamily – Commercial multifamily properties include anything that is more than four units. These structures include high-rise condominiums, apartment complexes, and smaller multifamily units.
  • Retail – These building types are common in the commercial real estate sector. These structures include restaurants, banks, strip malls, and community retail centers. Retail properties typically range from 5,000 sq. ft. to 350,000 sq. ft.
  • Office Building – These structures are among the most common types of commercial real estate investments. This classification includes parking decks, cubicles, single-tenants, skyscrapers, etc.
  • Industrial – Compared to residential properties, industrial properties are located in less desirable areas. Industrial properties include warehouses ideal for distribution and manufacturing.
  • Special Purpose – These properties are built for a specific use and cannot be utilized for any other purpose. Structures that fall under this category include stadiums, car wash facilities, schools, amusement parks, airports, etc.

Employ Industry Professionals 

Every commercial real estate deal requires various professionals like lenders, real estate agents, real estate attorneys, and appraisers. These individuals will double as your advisors when it comes to particular aspects of your deals.

If you start with one trusted professional, they will likely lead you to the rest. You will no longer have to ask yourself, “How much is my house worth?” The professional team you hire will assist you in building up your real estate knowledge.

Get to Know the Market

Your team of professionals will help to give you an inside perspective of the current state of your local commercial market. Understanding the nature of your market is pertinent to selecting the right property in the right area. Your commercial real estate agent will be able to offer you all of the information that you need. Enquire with your agent and appraiser about everything from fair market values to potential rental costs.

Commercial Lending

Unlike residential loans, commercial real estate is secured by a lien placed on the subject properly. If the loan goes into default, the commercial lender assumes possession of the property. Commercial real estate refers to any income-producing property.

Conclusion

With the right team and a little know-how, you can reach your goal of being a real estate investor. The most important factor as a beginner is doing your due diligence. Understanding your local market is critical to your success as a real estate investor.

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