You know you want to develop commercial properties, but you have little experience in the field. Could a checklist help you experience peace of mind?
Crexi offers tips for reducing risk when investing in business properties. Understand how to protect your time and energy when investing.
Check building systems
Have experienced professionals familiar with the latest building codes in California inspect all building systems, such as plumbing, structural, electrical, roofing, HVAC and windows. Beyond learning the party paying bills, understand how the local utilities department meters and delivers utilities.
Research property details
Learn the property type you want to develop or invest in, the lot and building size, the number of units and the number of floors the building has. Once you have that information, check it against the details received from the seller or broker for accuracy. Investigate details that do not match what the seller or broker provided.
Collect tenant information
If the commercial building already has tenants, ask for details such as utility payments, rent and security deposits. Double-check the information against the rent schedule, and look for the opportunity to extend a lease that the broker or seller did not mention.
Perform inspections and look over reports
Do you want to invest in a sizable multifamily community? If so, take time to get to know every vendor with a hand in taking care of the property. That may include electricians, property managers, pest inspectors, environmental consultants and plumbers. Further, review such documents as legal violations, legal actions involving the seller, building permits and the title report.
Leave no stone unturned when taking over commercial real estate. Proper due diligence may save you considerable time and money.