Whether you’re looking for rental income or need a place for your own small business, taking the proper steps will ensure you purchase the right property. Lawrence Realty Inc in Red Wing, MN, and their team of commercial real estate agents has an expansive knowledge of the market to find the investment property that meets your needs. They explain a five-step overview of the buying process.
5 Steps to Owning Commercial Real Estate
1. Do Your Research
Performing some background research is the best way to begin the commercial real estate buying process. For starters, you need to understand what type of property you are looking for to narrow the choices. For example, purchasing for your own business versus looking for multiple tenants may sway the location of the desired building. Always brush up on industry-specific concepts, such as financial and contractual terminology. The final step is to visit these properties, doing your homework on pricing, taxes, leases, and all other pertinent information.
2. Hire the Professionals
A commercial real estate agent in your area will have the most up-to-date listings with detailed information to jump-start your search. Once you’ve found a property, you’ll also need a lawyer to help you through the contractual aspects. Finally, you’ll want an accountant and mortgage broker to assist with all financial transactions.
3. Determine Financing
After you’ve found the desired mortgage broker, it’s time to sit down and determine financing. With a variety of traditional and alternative leasing methods, a professional will help you choose the right loan setup with the best possible rate.
4. Make an Offer
After you have solidified financing, you can make an offer under the guidance of your lawyer. You will start with a letter of intent (LOI) that’s not binding, which allows time for your attorney to review any stipulations before the contract becomes final. This is so you don’t get yourself in a financial bind or agreement that’s longer than intended.
5. Go Through Escrow
This final step is when money and deeds truly change hands. A third party will oversee all transactions during this period known as escrow. During this time, you’ll also be required to have the area surveyed and will order any needed inspections.
The property-buying process is complex but extremely rewarding when completed. With help from the commercial real estate agents at Lawrence Realty Inc, you’ll be in your new building in no time. Reach out to the team at (651) 388-4745 or get a head-start by searching listings online.