Making a commercial purchase is a great way to invest in the booming real estate markets of Dallas Texas and California. Before you dive in, you’ll want to ask yourself many questions, learn the terms and study best practices. Understanding your goals and objectives in buying the property will help foster success. In this week’s blog post, Stonebriar Mortgage discusses things to consider when making commercial purchases in Dallas, TX or California.
Questions to Ask During a Commercial Purchase
It is important to review the commercial purchase market, your goals, and what you are looking for. Learning the real estate world is a big task, below are some simple questions to ask yourself while studying the investment possibilities:
- What kind of property am I looking for?
- Do I desire to use the building for my own business, rent it out, build equity, or something else?
- What kind of location do you need?
- Do I want to buy, or can I lease the property? What will I get approved for?
- Thinking on approvals: what is my cash, financing, and/or ability to make a down payment?
- Can and should I partner with someone else to buy the property?
- How much money and effort am I willing to risk?
- How much time do I have to manage the property?
- How much work can I afford to put into the property?
- What skills and knowledge do I need or already have?
- Will I need to contract someone to get the knowledge needed?
- Do I need a specialized property manager or not? What sort of manager do I want?
- Finally, can I handle the responsibilities of being a landlord?
Learning More about Commercial Purchase Real Estate
Whether you’re experienced or just staring out, there will be an ongoing learning curve. Subscribe to this blog and follow other expert investors to stay current on the trends and predictions for Dallas, TX and California markets. You will want to keep a glossary of the technical terms handy. Here are some frequently used terms:
- Debt Service Coverage Ratio (DSCR) refers to the amount of debt you’ll be able to pay each year using the income from the property.
- Vacancy Rate refers to the average time and percent of properties that are vacant over the year in a certain area.
- Usable versus rentable square footage- rentable square footage is the total amount of space, not just the portion the tenant will occupy. Usable square footage refers to the specific area the tenant will use for their business and can even include the columns, recessed entries, etc. This is an important term as you can maximize how many square feet you can charge for rent.
Stonebriar Mortgage is knowledgeable about the opportunities in Dallas, Texas and California markets for commercial purchases. Work with us today to start maximizing your wealth in real estate.