I ndividuals that flip commercial real estate typically have found a quick way to get rich. The process involves purchasing commercial real estate at an inexpensive price, making significant improvements, and then selling it on the open market for much more than was originally paid. However, it may be that you are financially strapped, and cannot find the avenue to begin this profitable venture. There are alternatives to consider before deciding whether or not to invest in buying and selling commercial real estate for flipping.
First, you have to know what a fair price for your commercial real estate is. If you don't know, there are two things you can do. First, you can get your commercial real estate appraised. An independent appraiser will be able to give you a solid opinion of your commercial real estate's value. Not only that, but you will be able to see a list of comparable sales in your neighborhood which assisted your appraiser in coming up with your value. Another thing you can do to find out a fair price for your commercial real estate is to check out recent sales in your neighborhood. However, you have to keep in mind that other commercial real estates may have sold for more or less than your commercial real estate will, based on factors like location, age and features in the commercial real estate.
Obtaining a loan to purchase commercial real estate that is much lower than its true value is often easier than purchasing traditional commercial real estate. Choose an area in town that is desirable where you can purchase commercial real estates inexpensively. Make sure that it has the right amenities, with no huge negative impact, like being positioned next to the landfill. This will only limit the potential buyers.
Do extensive research by talking to available commercial real estate agents that are familiar with the area, and the viability of the current commercial real estate market. Avoid sinking your hard-earned dollars into commercial real estate until you are 100% sure the current commercial real estate market is solid, and you can reasonably expect a quick sale.
Once you have found a dilapidated commercial real estate, or one in need of major aesthetic repairs, have it inspected to ensure it has no major structural defects. By choosing houses that need significant cosmetic improvements, such as enhancing the landscape, exterior and interior painting, new flooring, and new bathroom fixtures, you will be able to perform the work quickly.
Be sure to choose only improvements to the commercial real estate that will not drain your bank account. Over time, you will become highly adept at commercial real estate improvement projects and will be able to perform any of these duties yourself. You will also learn to hone your skills by using repair manuals or watching other individuals in the work they perform.
Once the commercial real estate is complete, you can either sell it on the open market, or rent it out for a monthly fee. Renting the commercial real estate is an ideal solution if it is not selling quickly. Be sure to ask the going rate for rent comparable to other properties in the neighborhood. The amount of rent charged every month should be at least equal to the value that someone would pay for a mortgage. Any additional funds that are collected over and above the money you have put out to purchase and improve the property can be put toward the next commercial real estate for flipping.
It is highly advisable to develop positive relationships with contractors and commercial real estate agents. Over time they will likely reduce their standard fees when working on your commercial real estate, or showing you new properties to purchase. In addition, it is important to fully understand all of the building codes and regulations in your area whenever purchasing a new commercial real estate.
New flippers might not know what to consider before buying commercial real estate. Typically investors have to pay cash in order to have the ability to invest into a piece of property. Once the payment is made the investor has to commit to remodeling the commercial real estate and selling it for a profit. New flippers might not know what to consider before buying commercial real estate. Many commercial real estates on the market are short sales or have undergone foreclosure. Although they sell for cheap prices it might cost a lot more in the long run to remodel commercial real estate to get it sold for a decent price on the market.
The plumbing is one of the most important parts of commercial real estate.
Pipes that are withered and beyond repair can cost thousands to fix. If the pipework is not in good condition then it is wise to invest into a different piece of property. Copper is better than galvanized steel when it comes to pipes for plumbing. Look for copper pipes when searching for commercial real estate to flip. Add copper to commercial real estate if you purchased the property and found a poor plumbing job after your purchase, it is better for the longevity of the property.
Another part of the commercial real estate to take into consideration is the foundation. Depending on where the commercial real estate is located you do not want to find a weak foundation. Commercial real estate that resides on a flat service may be easy to fix, but commercial real estate on hills are going to be tough. Have an inspector check both the plumbing and foundation of a piece of property to minimize the cost of remodeling it for sale.
Research the prices of commercial real estate in the area you plan. Get an idea for how much commercial real estate costs in the area you plan on investing. Avoid overpaying for property that is not worth the cost. Even if commercial real estate looks promising you do not want to pay more than you should. Part of being a good house flipper is having good negotiation skills. Try to talk down the price of commercial real estate so that you can flip it and make the most amount of profit possible. Capitalize on any deals in a given neighborhood so that you can produce the maximum amount of profit possible.
Form a relationship with a reliable contractor. You should know at least two contracting teams or companies that charge a fair price. The purpose of this is to ensure that you pay as little as possible to flip commercial real estate. Shop around for a good contractor just like you would shop around for a fairly priced commercial real estate to find the best deal.
Marketing is important. Once the property is remodeled you should do everything you can to give it exposure. Make flyers, inform people in the neighborhood, post ads online, and add the property to the MLS. Transform commercial real estate and make it look as beautiful as possible and you should attract a lot of potential buyers and get the type of offers you want to see.