Are you considering your first commercial real estate investment? Here’s some tips!
Number One: Don’t just buy something because it’s cheap. A low price tag can actually be a red flag, not a golden ticket. You have to look at the whole picture, because the value of a commercial property is determined by a multitude of factors.
Number Two: You make your money when you buy the property, not when you sell it. Overpaying now and banking on future appreciation is a huge gamble. Appreciation isn’t guaranteed, so the deal has to make sense on day one.
Number Three: You absolutely have to know your market. What kind of properties are actually in demand here? What size? What are the local regulatory factors? You need to understand the core drivers of demand in your specific area.
When you look at a potential investment, break it down into three parts:
1.The initial cash I put in to acquire the property.
2.The cash flow (in and out) while I hold the property.
3.The money I hope to get when I sell.
If you’re considering your first or your fiftieth real estate investment, I’d love to connect!
Emma McDaniel Lunning, CCIM
864-576-4660
emma@mcdanielandco.com
