It’s a big decision to buy a commercial real estate property. Many factors go into the buying process, and it can be overwhelming. You want to make sure you’re making an informed decision, so we’ve put together four things you should consider when buying a commercial property. 

4 Basics of Buying a Commercial Real Estate Property

Building Condition

Assessing the condition of any commercial building is the first step in determining its value as an investment. Getting a detailed Property Condition Assessment will give you a clear view of the property’s condition. These details will help you know what repairs will be needed to improve the property if the condition warrants investment consideration.

Financing Options

When you purchase a commercial building, finding suitable financing options is essential. Your lender will assess the property characteristics, credit score, debt to income ratio to determine the best loan product for your needs and qualifications. While the process is similar to getting a home mortgage, there are significant differences.  

Financing options for commercial property are more difficult to understand than a standard 30-year fixed home mortgage. Because of this, you’ll want to find the most knowledgeable commercial loan broker possible.

Pre-closing Inspection

After you’ve gotten all the inspection reports, assessed the viability of the investment, secured financing, and are ready to close, the next step will be a pre-closing inspection. From the time you entered escrow, it’s been 60 to 90 days, generally, to closing. During this time, something could’ve happened to the property that could affect its material condition. The pre-closing inspection is to verify condition is essential to avoid issues that didn’t exist when you first viewed the property.

If there is a condition that didn’t exist when you reached the agreement with the seller, you can delay the closing until the issues are corrected.

The Benefit of Experienced Representation 

Buying a commercial property can be tricky. The different loan products, lease clauses, and terms can be confusing. Additionally, the purchase contract has a lot of “legalese,” which makes the document difficult to understand. Buying a home is relatively straightforward, whereas a commercial property is not.

It’s wise to hire or retain someone with experience in representing commercial property buyers. That’s where we come in.

If you’re considering purchasing your first commercial property or your tenth, please reach out to us. We have experience representing buyers and sellers of commercial properties and can help you understand the nuances.  

If we can help you, please click here for our contact page. We’ll reach out personally and promptly.

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