OurHouseForRent Blog

5 Tried-and-True Tips To Help You Profit From Commercial Real Estate Investing

Author: Chris Lang

Sometimes the best looking property can actually be the worst real estate investment you've ever made. Remember that investing in Commercial property is all about the price, the terms and the ongoing return on investment.

Here are several tips for successful Commercial property investing.

TIP #1: Be an Investor and not merely a Gatherer of Commercial properties.

The reason you make investments is to produce a worthwhile profit. So, if you buy a property that produces little or no growth, then you basically acquired a property (instead of making an investment).

TIP #2: Get yourself a Mentor so you gain from his or her Experience.

Mentors can save you from making very costly errors; identify when you've missed due diligence items; and connect you with resources, that you otherwise wouldn't have immediate access to.

TIP #3: Understand that every Commercial real estate has a Lifetime.

One of the biggest mistakes you'll make as an investor is to ignore the fact you will need to spend money on the upkeep of the building over time. The building may need a new roof; or the electrical system may need to be replaced.

Every building goes through these renewal phases at some stage. Therefore, make sure you have a long-term strategy to handle such repairs.

TIP #4: Focus on ONE Commercial Property Type at a time.

Especially when you're first starting out, you should focus on one type of investment: Offices, Shops, Warehouses, or whatever you prefer.

Each deal needs (and deserves) your undivided attention. It's much better to be master one aspect, than be average over many. And who wants average-performing properties anyway?

TIP #5: Decide whether you and your assets are Adequately Protected.

As with anything in life, messy lawsuits can occasionally occur. Therefore, you need to do everything in your power to protect yourself and your investment.

Ask yourself the following questions to determine whether you're fully covered:
How is your Commercial real estate protected - both legally and insurance wires?
Are your other investments totally separate from each other so that one lawsuit doesn't affect the other investments?
What do you have at stake, if you lose a lawsuit?
Is your personal property (for example, your home) isolated?

Don't be casual, when it comes to the answers to these questions. Talk to a solicitor to ensure that you're fully protected if ever you were to be sued.

BONUS TIP: For a Partnership or Syndicate, finance the deal with Non-recourse Finance.

Non-recourse means that you aren't personally guaranteeing the borrowings. This gives you two distinct advantages: It allows you to be taken off the loan if the partnership goes sour. And, if the property were to fail, the financier cannot come after you personally.

Once you understand the "Rules of the Game", buying Commercial property is really quite simple. You just need to do a little homework and make sure you get the right advice along the way.

If you would like to discover even more strategies and secrets ... I would invite you to watch this FREE video and  find out the #1 Secret for Success with Commercial Real  Estate.Chris Lang is a Mentor, Coach and Buyer's Advocate ... for Commercial Property Investors.

Article Source: http://www.articlealley.com/article_2202234_33.html