Purchasing a commercial building can be a lucrative venture and an enormous investment. However, it is time consuming, complex, and money draining and has a greater liability than residential property. Therefore, it is prudent to get professionals to help with the buying process. Importantly, you have to consider various factors when buying a commercial building such as location, price, purpose, and condition. Here is a guide for purchasing a commercial building.
1. What are you looking for?
Determine the kind of property you want; its purpose, size, location, and your budget. You have to establish whether you would like to partner with someone, the amount of time you will commit to the building, and the work you will put on the building. As you figure out what you are looking for, ensure you evaluate the benefits and risks of purchasing a commercial building.
2. Find Experts
The purchase of a commercial building requires the input of various experts such as a real estate broker, commercial real estate attorney and certified public accountant (CPA). While a commercial real estate broker to help you locate and acquire a commercial building, a commercial real estate attorney helps you deal with contracts and real estate transactions. A CPA will help you examine the finances of the building and determine its investment potential.
Do not settle on the first building you come across. Visit many buildings and determine the merits and demerits of each. Consider the price, location, condition and allowed uses of each. Also, consider things like the taxes on the property, reasons for the owner selling, repairs needed, and income generated.
You may need some form of financing to help you make a purchase. Consider different banks and mortgage companies that finance commercial buildings and their interest rates. Also, you may find partner investors to raise funds for the building.
5. Negotiation Process
Negotiating the purchase of a commercial building can be intense and time-consuming. It is advisable to hire professionals to do it on your behalf. When convinced that the building is worth it, a buyer signs a letter of intent (LOl).
6. Due Diligence
A buyer has to conduct due diligence and do their own inspections and investigations on the building before making a purchase. The first step is to obtain an American Land Title Association (ALTA) survey that provides valuable information such as improvements, boundary lines, and the identification of easement. In addition, you have to assess other documents such as leases, mortgages, utility bills, insurance policies, environmental reports, fire inspection reports, and parking lot contracts.
7. ADA Compliance
It is important to determine whether the commercial building you want to purchase adheres to the Americans with Disabilities Act (ADA). The building should be handicap accessible from the parking lot to the doors and bathrooms. The parking lot should have handicap parking slots that are spacious and accessible. If the parking lot is not a handicap accessible, you can hire a parking lot striping and paving service to revamp it and avoid lawsuits.
Purchasing a commercial building is a lucrative investment opportunity that is complex, time-consuming, and money draining. Before investing, you have to consider the risks and benefits of the building, the type of building you want, and importantly, do your due diligence. Also, ensure that the commercial building is ADA compliant to avoid lawsuits.