Due diligence is the process of doing your homework before buying real estate. It includes investigations that help you to ensure this is a good purchase and to check for any potential legal issues with the sale.

With commercial real estate, RealWealth explains you need to ensure your due diligence uncovers whether the property matches your goals.

Match your needs

Doing due diligence with your end goal in mind will help you to know that this is a property you can use and that will work. It will help you to make sure you do not invest in something that you cannot move forward with.

Avoid issues

Due diligence will also help you uncover any potential title issues or other legal issues surrounding the property. This is especially important if you plan to resell the property. You need to know it will be yours free and clear with no boundary problems or anything else that could diminish the value for a future buyer.

It will also allow you to discover anything that could be a potential hazard, such as a history of waste on the land.

Identify potential

Due diligence can also enable you to look further into the viability of this as an investment. For example, if you want to buy an apartment unit, proper due diligence will allow you to ensure you will be able to find renters. It will also let you look into any problems that could cost you money or prevent you from renting units.

Due diligence protects you from a bad investment, which is essential in commercial real estate dealings.

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As a landlord, you probably do not like to think about disputing with your tenants. Most landlords hope for a cordial relationship with their tenants. Unfortunately, disputes do happen and you have to be prepared to handle them when they do.

Moneycrashers has advice on how landlords should handle common problem tenants.

Disruptive tenants

If you receive complaints about one of your tenants, it is a good idea to investigate it. Some tenants may throw disruptive parties, have loud pets or play loud music throughout the day and night. Try to explain to your tenant the issue that other tenants have with him or her and look for a solution. The lease agreement should always have clear rules about noise and other disruptions.

Destructive tenants

Before you rent a property, you should take pictures. Even if you vet your tenants, you cannot always predict which tenants will become destructive to your property. To safeguard your property, you should have insurance policies designed for landlords. In addition, you should keep photographic evidence of your property before and after.

Uncommunicative tenants

Encourage your tenants to speak to you if he or she has any issues with income. For example, if your tenant can no longer afford rent, you may be able to move him or her to a different, lower-priced unit. Some tenants may not explain their situation and you could find yourself saddled with utility bills, even after the tenant leaves the property. To protect yourself against lack of payment for utilities, you may want the utilities to be in the tenant’s name.

If you have clients that do not pay, that cause disruption or break the regulations of the lease, you have the power to evict.

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A contract is a legal document that creates obligations between the parties who enter the agreement. A breach of contract occurs when one party fails to fulfill any part of its contractual obligation.

There are four main types of breach of contract.

1. Minor breach

A minor breach of contract occurs when one party fails to fulfill one part of a contract, but the breach is so minor that it does not affect the fulfillment of the rest of the contract. This is also called an immaterial or partial breach. It is difficult to show harm in a minor breach unless the wronged party can prove how the missed part of the contract caused a significant loss.

2. Material breach

A material breach of contract is when a key element of the contract is not fulfilled as agreed. It is a failure to perform the contract to such a degree that the heart or purpose of the agreement is fundamentally broken. This is the most severe type of breach of contract.

3. Anticipatory breach

When one party to a contract acknowledges to the other that they will not be able to fulfill their contractual obligation by the agreed-upon time it is an anticipatory breach. The non-breaching party may also realize that a breach will occur through the actions of the breaching party without being formally notified.

4. Actual breach

An actual breach of contract occurs when one party improperly or incompletely fulfills the duties obligated in the contract. It is a breach that has already occurred, it is not anticipated.

When a breach of contract occurs, the wronged party can either seek to have the contract enforced or seek damages or restitution to recover from the financial harm of the breach. The remedy or recovery available depends on the type of breach and the severity of harm it caused.

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Not every California commercial tenant is a dream tenant, and in some cases, they are downright bad. If your commercial tenant has failed to make rent payments on time or at all or has otherwise broken lease terms, you may decide to move forward with an eviction. Tensions often run high during the eviction process. However, by staying calm and covering your bases, you may be able to make the situation easier while avoiding potential legal trouble.

Per SFGate, there is a specific process you must follow when evicting a tenant from a commercial property. When doing so, be sure to take the following steps.

Draft an eviction notice

You must give your commercial tenant written notice of your plans to evict him or her. You must do so at least three days ahead of the day you plan to move forward with the eviction. Include the amount of rent overdue in the notice and make it clear that you must receive the amount in full within three days to stop the eviction.

Serve the eviction notice

Once you have your eviction notice drafted, you need to serve your commercial tenant at his or her place of business. If the tenant is absent, give the notice to a manager or executive who is present. If no one is there, post the notice to the door and be sure to put an additional copy in the mail.

Following these guidelines may help you avoid unnecessary delays associated with evicting a commercial tenant and reduce any losses you might experience while eviction is ongoing.

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For many property owners, their homes represent many things, from reaching an important life stage to the centers of their families. Mortgage fraud, however, may jeopardize their homeownership, as well as bring other repercussions.

Having an understanding of mortgage fraud may help people avoid getting taken advantage of.

Watch for common schemes

According to the Federal Bureau of Investigation, people may engage in mortgage fraud to obtain or retain property ownership or for profit. Some of the most common types of mortgage fraud schemes people attempt include the following:

• Loan modification schemes
• Commercial real estate loans
• Foreclosure rescue schemes
• Illegal property flipping
• Equity skimming
• Silent second

Scammers also take advantage of the Federal Housing Administration’s home equity conversion mortgage program to convert the equity elderly homeowners hold in their properties into quick cash.

Avoid getting scammed

According to the Office of the Attorney General of California, people may avoid falling prey to scammers by taking certain precautions. For example, those needing foreclosure assistance should not pay for loan modifications upfront and never make mortgage payments to anyone other than their loan servicers or lenders. Should those providing foreclosure assistance services offer guarantees to stop the foreclosure process or forensic loan audits, it should raise red flags. People should never transfer or sell their homes to foreclosure rescuers as this may cost them ownership of their homes.

Homeowners have rights against predatory lending practices; however, that does not mean that such scams do not occur. To protect themselves and their property, homeowners may benefit from working only with reputable services if they find themselves in need of mortgage assistance.

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When making your first foray into commercial real estate in California, you may elect to construct a new property in order to be one of the first to enter into a lightly developed area. This requires, however, that you have a strong understanding of local zoning regulations.

Many come to us here at Goodkin APC expecting to gain easy approval for their proposed property, only to later learn that their plans often come into conflict with the intended use of the land. To avoid this, you should familiarize yourself with the commercial opportunities local laws allow for.

Different types of commercial zones

According to the Los Angeles County Department of Regional Planning, there are several different types of commercial zones. Restricted commercial zones allow for most commercial services, while neighborhood commercial and general commercial zones extend those uses to include rental, tailor shops and outdoor advertising, and secondhand stores, respectively. Commercial highway zones permit professional office space, financial services and parks and playgrounds, while commercial manufacturing areas allow for just that. Commercial planned development allows for most other non-residential restricted commercial services, while commercial recreation zones alott land for various types of recreational services. Each respective type of zone specifies certain allowable features, such as:

• Parking
• Exterior displays
• Outdoor storage
• Building height

Zoning variances and conditional use permits

What happens if the area you wish to build a commercial property on is not zoned for your desired use? You can seek a zoning variance, which allows for a waiver of development standards. However, officials often do not grant variances for properties not otherwise allowed in a particular zone. An easier option may be to seek a conditional use permit, which allows for certain uses which may not precisely fit into a certain zone.

You can find more information on commercial property regulations throughout our site.

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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.

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An investment partnership may take your California business to the next level. Drawing upon the competencies of other professionals, you may find opportunities to expand the scope of your organization.

Understanding how an investment partnership may benefit your company can help you decide if it is the right choice to pursue.

Increase your marketability

One of the characteristics of an investment partnership is the combining of assets between participants. This means your company can enjoy the benefits of having access to more resources. One advantage of this is the increased marketability your company may have to lenders. When they see a larger number of assets, they may feel more confident in loaning funds for business ventures.

Partaking of the adjoined assets requires you and other participants to have both integrity and transparency. According to Inc., transparency will allow you and others to maximize every opportunity. Likewise, sharing openly and honestly with each other can help everyone identify weaknesses and implement solutions to avoid costly failures along the way.

Increase your competitive edge

A major challenge of operating a business is the need to stay competitive in your market or industry. An investment partnership allows you to draw upon the strengths of other successful professionals while still maintaining your expertise. Your newfound relationship may give you opportunities to learn other skills and competencies that can help you improve your organization.

Because an investment partnership does not cost as much as other business transactions, it may be a more affordable option to consider. Prior to agreeing to a partnership, you and any other participants should develop and sign a formal contract that discloses everyone’s responsibilities, rights and benefits.

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Investment partnerships carry high risks but may also bring high rewards. Holding stakes in such business ownership, you may have concerns about protecting yourself, your personal finances and your business earnings. The type of structure you choose for your business, such as a limited liability company, may impact operational and administrative factors, including your liabilities. While some options may suit one business, they do not always fit the needs or goals of another.

Setting up your investment partnership as an LLC may offer you certain advantages as your business profits and grows.

Tax benefits

According to the U.S. Small Business Administration, structuring as an LLC allows you certain tax benefits. Unlike with a corporation, your business profits and losses pass on to your personal income for tax filing purposes. Therefore, you do not have to pay personal taxes on your earnings, as well as corporate taxes on your business’ earnings. You should keep in mind, however, that you classify as self-employed and must therefore pay self-employment Medicare and Social Security taxes.

Personal liability protection

Structuring your company as an LLC, instead of a traditional partnership or another formation type, may also provide some personal liability protection. An LLC separates your personal and business assets for the purposes of liability. Consequently, your personal assets, such as cars, homes and savings accounts, may not be on the line in the event your investment partnership gets sued or you must file for bankruptcy.

Pros and cons exist for all business formation types. Therefore, you may find it beneficial to consider these various benefits and disadvantages before choosing a business structure.

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Selling a brilliant product or service to the public is a sure-fire way to achieve the American dream. You may not be able to launch, grow and operate a business by yourself, though. Collaborating with business partners may give you access to the capital, knowledge and skills you need to make your venture work.

If you suspect your business partner may be a narcissist, you may expect to have some bumps along the way. After all, narcissists may be selfish, demanding and manipulative. They may also have trouble expressing empathy or considering the needs of others.

Draft a comprehensive partnership agreement

Because of the possibility of having a future power struggle with a narcissistic partner, you should start your venture on the right foot. Drafting a comprehensive partnership agreement may help you minimize conflict. In your agreement, outline each partner’s rights and responsibilities. Also, consider including provisions for resolving disputes, removing partners and wrapping up the partnership.

Maintain focus

Your business venture has pressing needs you must address, but managing a narcissistic partner may divert your energy. To maintain focus, try not to take your partner’s behaviors personally. By maintaining a healthy emotional distance, you model appropriate partnership behavior for your narcissistic partner.

Negotiate effectively

If your narcissistic partner shares some decision-making authority with you, you may struggle to reach a consensus. Brushing up on your negotiation skills may be beneficial. By looking for collaborative solutions that allow each partner to win, you may keep disputes to a minimum.

Even if one partner is a narcissist, it is usually possible to make a partnership work. Ultimately, while you probably have little control over how your partner behaves, you can and should control your response.

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