Investing in commercial real estate can be a major step for anyone, especially if you are a relative novice in the industry. Because there is generally a lot of capital involved, it can be a somewhat intimidating prospect to contemplate. However, if you keep a few key factors in mind, you should be able to identify the signs that tell you whether a particular investment opportunity is relatively safe and worth your while.

Market research

Part of the due diligence for any commercial real estate investment opportunity is thoroughly researching the location of the property. There should be easy access for the public to this location, and you should be aware of any trends that are prevalent in the area. You should also make a point of determining if the opportunity is in an area which has been shunned by other investors, because there’s probably a good reason for that.

Ask the tough questions

When you’re presented with a good-looking commercial real estate investment opportunity, you should ask yourself all the tough questions first, and not be dazzled by the potential for big profits. Does this opportunity fit what you are looking for? Does it align with your overall business plan? Are you really ready to take on an investment like this?

Line up financing

There are usually tons of details associated with any commercial real estate investment opportunity, so you’ll want to be as organized as possible before jumping in. One of the essential aspects of any investment is of course the financing, and this should be the first thing you address, since lack of it will negate all other issues. As a rule of thumb, your personal financial situation will probably dictate the types of commercial real estate investments you can safely handle.

If you’re considering a property which is far beyond your realistic price range, this will be spotted by any lender, and you’re likely to be declined for approval. Your best bet is to consult with an accountant before you plunge into any kind of investment, because a professional will be able to assess whether or not you can afford to go after the property in mind.

Thinking about a commercial real estate investment?

If you have been considering a particular real estate investment, but don’t have all the funding lined up to make it happen, we may be able to help. Contact us at Proactive Funding Solutions to discuss the details of your investment opportunity, and let our financial specialists provide you with some options.