As a new commercial real estate investor, you likely have a few questions that are still unanswered. Here are some of the most commonly asked questions about investing in commercial property:
Yes, especially as a new investor. Hiring a licensed broker will guide you in the right direction, help you find the most profitable property, and aid in closing a deal. While you might not want to pay a real estate commission before having any cash flow, hiring a professional is worth the fee. Without a broker, you will have to find properties, negotiate, do research, and fill out paperwork independently. So if you are looking for commercial property in Brevard County, trust the certified experts at Ullian Realty to help you in the process.
As well as hiring a broker, you should hire an experienced lawyer who will help you with legal advice. A real estate attorney will review all your documents and leases to ensure that you follow all of the procedures correctly. If you are renting out your property to tenants, you need an attorney to protect against any lawsuits or other legal actions your tenants may take against you.
The two general categories of real estate you can invest in are physical property and non-physical real estate investments. The first category encompasses residential real estate, commercial property, industrial properties, and raw land. The second refers to REITs or real estate investment trusts in which you can invest in shares of the company that owns the commercial space.
While investing in commercial property does require more hands-on work and more capital upfront, it pays off in the long run. Therefore, investing in physical property is generally considered the most lucrative investment with the highest return.
Real estate lending allows you to acquire funds in the form of a loan to finance your down payment or set up a mortgage. With a loan, you can pay back the lender over a period of time rather than paying upfront.
There are five types of commercial loans:
These all have their qualifications, so speak to your commercial mortgage lender about what is suitable for you.
Yes, you should always work with a broker that is a Certified Commercial Investment Member or a member of the Society of Industrial & Office Realtors. These certifications ensure that the real estate agent you are working with is experienced and knowledgeable. Looking for this certification will help you narrow down a broker from a wide field of options. Several of our brokers at Ullian Realty are CCIM and SIOR certified.
Net Operating Income is a formula used to calculate the profitability of an investment. The formula is:
Net Operating Income = (Gross Operating Income + Other Income) – Operating Expenses
“Other Income” is any extra profit your property makes, such as money earned from vending machines, parking lots, or laundry machines.
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