Avoid Mistakes When Investing in Commercial Real Estate
Mistake #1. Not Being Informed About a Commercial Mortgage
Before looking for your next investment take the time to with a commercial mortgage broker. This can save you hours of searching in the wrong price range or worse, offering and then finding out you don’t qualify for financing.
Mistake #2. Not Shopping For Mortgage Terms
Banks will sharpen their pencils to get your business especially if you have a good credit rating and bring other business to them e.g. RRSP’s, general account, savings etc. Posted rates should viewed as a starting point. You need to know what the best rate is and this is usually done by get competitive quotes. Also, ask whether the bank will cover appraisal fees, and about buy-out fees, penalties, payment options, portability etc. The time spent can save you thousands of dollars over the life of the mortgage.
Mistake #3. Not Getting Professional Inspections
Nobody wants to purchase only to find out later there are defects, latent or otherwise. Ensure you obtain inspections where needed e.g. commercial unit inspection, structural engineer, insect, radon etc. If the inspection identifies deficiencies you may be able to negotiate the purchase price to cover required repairs or make your satisfaction of the inspection subject to the seller remedying the problem. Your RE/MAX commercial agent can advise you on inspections you should consider.
Mistake #4. Not Using A Professional Commercial Real Estate Agent.
Your RE/MAX commercial agent can help you make a purchase with the least amount of problems. He or she can ensure the price you pay is market value. They can offer expert advice on what to look for, conditions to include, negotiation strategy etc. After all, they work for you.
Mistake #5. Not Knowing The Full Cost Of Purchasing or Selling.
Know all the costs associated with your transaction. Consider the following costs: legal fees, transfer tax, property taxes, and accounting fees.