What are the “secrets” involved when purchasing CRE?
Today we’re sharing our top 3 factors that are important to making the best decision when purchasing a commercial property. As a sneak peek, learn from our eBook, “The Secrets To Commercial Real Estate Financing”, the crucial points to review before your purchase.
TRANSPARENCY APPROACH IS IMPORTANT WHEN PURCHASING COMMERCIAL REAL ESTATE | THE BROCHURE
Typically when people shop to get a commercial property, they seek out a broker with their needs, and receive a brochure on potential properties. Every item from Net Operating Income to expenses, size of property, cap ex work etc. must be checked.
DOES THE PROPERTY NEED CAP EX WORK?
Most potential owners do not hire engineers to scope out the actual work needed after a purchase is made. The work could include items such as roof repair, boiler replacement, or HVAC systems, or even work on the outdoor parking lot. The estimated dollars needed to spend on this property can be extensive, so it needs to be added to the actual cost of the purchase.
IS THE NET OPERATING INCOME CONSISTENT WITH CAP RATES OF OTHER PROPERTIES RECENTLY SOLD?
You must do an analysis of the NOI vs. Cap Rate. NOI/Cap rate = Valuation of the property. Make certain this is done properly.
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