Have a Partner in Your Commercial Real Estate Search!
When looking to invest in a commercial property, there are a few things to keep in mind, such as the condition of the property and whether there are any legal claims against it. At Teviston Capital Group, we can help you find the proper financing for your commercial investment, and you can move forward once you’ve found the right property!
The Property Needs Updating
There are countless commercial properties on the market at nearly any given time, and each one of them will be in a different condition. You might find a location that needs some upkeep, while others will need a major overhaul before they could be considered inhabitable for your business. Properties that need significant updates can seem like a welcome challenge to some, but it’s important to weigh all of your options before signing on the dotted line.
The Net Operating Income (NOI) Doesn’t Cover Everything You Need it To
Net operating income (NOI) refers to the property’s profitability after all operating expenses are subtracted. For commercial real estate investors, operating expenses include the cost of maintaining the building, and can include everything from insurance premiums and utilities to property taxes and legal fees. Once these costs are removed, you can determine if your NOI will cover everything you need it to, such as other taxes or improvements to the building.
The Cash-On-Cash Return or ROI Is Negative
One thing you definitely want to avoid with commercial real estate is a significant loss, especially in the early stages. Your cash-on-cash return is the cash income earned on the cash that is invested in the property. If the annual return is higher than the money paid towards the commercial mortgage, then you should come out ahead. However, if the return is lower, you’re essentially losing money, and that can create several issues for both you and your tenants.
There is a Lack of Due Diligence
No investor wants to deal with legal issues once they’ve signed for a commercial loan, which is why it’s important to know about any liens or other legal claims on a property. You’ll also want to check on zoning and permits to make sure that the building can be used for business purposes. The last thing you want is to think that everything is moving along smoothly, only for a legal hurdle to derail the deal.At Teviston Capital Group, our consultants can help you decide if a commercial property is a good investment for you. We have hundreds of funding sources available, and would love to help you get started.
The Property Needs Updating
Does the building need a major overhaul?
Net Operating Income Doesn’t Cover Everything
Are your expenses affecting your NOI?
The Cash-On-Cash Return Is Negative
Are you spending more than you’re making?
