If you’re going to invest in flipping a piece of commercial real estate, you must adhere to 3 critical tips to ensure your success, or else you may end of wasting time, money and energy on a dead end.
Here are 3 tips:
1. Make sure the next guy will pay more than you. Buyers will value commercial real estate differently depending on it’s use, time of year, short term and long term economic growth, property location etc, etc. Not knowing what type of buyer your looking for could cost you in the end.
2. Improve the net operating income fast by tenanting the property. Many investors search for properties that are 50% occupied because they like to buy them with a stable income. When they value the building, the income determines its worth and they know that if they locate a tenant for the other 50% of the building, they could double the net operating income as well as the building’s value.
3. Make your buyer sign a non-circumvent and confidentiality agreement before showing them the deal. Many investors play a win-lose game of negotiations and will try to circumvent you to cut you out of your deal unless you protect yourself. Before you show an opportunity to anyone, make sure they have signed the necessary paperwork or else you might get burned.