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Important Considerations With Commercial Real Estate Transactions

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					Dealing with commercial real estate can be quite complicated, even for
those with experience in the business. There are always many variables to
consider, and it's important to dot every "I" and cross every "T", or you
may find many unintended consequences down the road. Here are some things
you want to keep in mind when going into a commercial property
transaction:

Think about your future, not just your present

Whether you're a business looking for industrial property, a retail
location, or commercial office space, you need to approach the deal with
not just your present needs in mind, but your future needs as well. What
is your five year and ten year growth plan? In other words, where do you
believe your business will be 10 years from now? And make sure these
projections are realistic and based on sound data and not wishful
thinking. Otherwise, you may overcommit and take on more space than you
need or can afford.

Get your financing together ahead of time

Financing a commercial real estate transaction is far more complicated
than just getting a residential home loan. Depending on the amount of the
purchase, you may need to line up multiple sources of financing. Make
sure you do all this before you start looking around for the ideal
property. And remember, sometimes private investors can be the best
sources for funds to buy or construct a commercial property. Use your
network of contacts and consider all possible sources, so you have all
your ducks in a row before you even get close to negotiating a deal.

Address any and all environmental concerns

This is especially important when going into industrial property, but it
can even come up when looking at property such as commercial office
space. Make sure you or someone on your team has thoroughly researched
all the government zoning and environmental regulations and the cost of
compliance. This is one area where you want to avoid future surprises.
Make sure your due diligence is done in this area.

Educate yourself on taxes

Whenever you enter into any kind of commercial real estate transaction,
taxes must always be a major consideration. Many times, the tax laws will
work in your favor in the form of depreciation and other kinds of
deductions you'll be allowed to take. Whatever the case, make sure you
review everything with your accountant so you know the impact taxes will
have on your purchase.

Work with a top-tier commercial realtor

This may be the most important consideration of them all. Whether you're
new or experienced in the commercial market, make sure you have a
commercial real estate broker representing you that knows what they're
doing. It is best to find a realtor with several years and millions of
dollars of transactions under his/her belt. It is also helpful to ask for
some references from others who've worked with this realtor to make sure
they had a good experience. With a top commercial real estate agent on
your side, you are far more likely to have a smooth and successful
transaction.

				
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