Finances: First, get your personal financial house in order. This means going through your finances and cleaning up any problems that could affect your financing power and credit score. Orient your financial affairs to serve your purpose of building wealth by owning your own building or property. Your home is your best investment.
Budget: Next, establish a realistic objective and define what is attainable. Find a financial institution you plan to build a relationship with and get Pre-approved. You can work your purchasing power on your investments and equity line of credit. Your budget may include liquidating some of your assets for equity, such as a rental property. You can use this equity in your budget to purchase your commercial property, make a down payment or make renovations.
Location, Location, Location: You must be committed in looking for your property. Good deals in commercial property or homes are not on the market long in Keystone. Most small commercial properties are bought cash by big investors. Small investors that need to finance their purchase have to be ready with all your strategies in place for the purchase including your budget. Otherwise, you can be cut out of the deal for the cash buyer.
Purchase: Once you have identified a potential purchase, get a professional to accurately value a property based on its condition, your return requirements and your borrowing power. Understand why “What is it worth?” is the wrong question, and how to answer the right question: “What is it worth to me?” Remember to start out with a small property with your budget, because this will require less initial capital and generally a reduced time management commitment, but still the experience of ownership and prospect of financial rewards.
Finally, get professional advice. A commercial specialist experienced in appraisal, financing and other related areas can prove invaluable to first-time investors to select an appropriate property, minimize risks and chart a long term path to success. Also, to keep your budget on track by using an experienced tax professional that can help explain liabilities and strategies and budgeting. As I look back on my experience of purchasing all types of properties, I know to apply one simple principle: “think it all the way through.”