Planning for your investment in commercial real estate (CRE) is essential to achieve the best possible results for your financial portfolio. A few simple steps will provide you with the information you need to make the best decisions for your needs and budget. Here are five proven strategies for preparing to make your move in the commercial property marketplace.
Research the Supply and Demand in Your Area
Purchasing during times of increased supply will often allow you to acquire new properties without paying a premium price. Conversely, during times of higher demand, you should expect to pay more for the most desirable CRE properties. Doing research on the current state of the market in your area can help you time your investments effectively in order to achieve the greatest profits.
Decide on the Type of Property You Want
You have plenty of options in the commercial real estate marketplace. Some of the most popular choices for investments include the following:
- Apartment complexes and rental properties
- Office spaces
- Retail malls and developments
- Mixed-use properties, also known as live-work-play communities
- Warehousing and distribution facilities
Investigate the Property
Once you have chosen a potential CRE investment, it is important to perform the due diligence necessary to make sure that you can use it in the way you intend. For cannabis-related businesses in particular, checking on zoning restrictions and ensuring that your plans are compatible with the property in which you are interested will allow you to make the most appropriate choices for your needs.
Understand How Much You Can Afford to Risk
Along with the amount you plan to invest in commercial properties, you should also maintain a contingency fund to manage any expenses that come up during the course of your acquisition and ownership. This includes emergency repairs, upgrades to the property required to meet local and state codes and other fees that may not be apparent at the time of acquisition. By creating a financial contingency fund, you can better decide on the amount you have available to risk on a particular investment.
Find the Best Funding Options
The right funding can make or break your commercial real estate investment strategy. Traditional funding options can take too long for approval and disbursement and may cause you to miss opportunities in the real estate marketplace. In many cases, the faster processing times and higher approval rates of alternative lenders are essential to achieve the highest degree of success for your investing activities in the real estate marketplace.