The process to sell or buy a commercial property should be a smooth process, not a hassle. Whether you’re buying a new building for your expanding operations, or buying rental property to create a new income stream in Cleveland and Northeast Ohio, the real estate attorneys at Manning & Clair Attorneys can provide support and guidance to make the experience as cost-efficient and successful as possible. As you tour properties and perform your due diligence, Manning & Clair encourages you to keep the following items in mind. The following tips cover real estate investing for beginners. Once you understand the basics, schedule an appointment with us to discuss your situation in further detail.
Real Estate Investing for Beginners: Understand the Laws
Real estate laws, rules, and regulations can differ by county and city across the Cleveland area. Consult with our experienced real estate attorneys regarding any purchase or lease documents. We should review all of your purchase or lease documents before you execute them. We can be your right-hand expert from start to finish. Having a team you can trust is important.
Have Your Loan and Documents Ready
You want to be ready when that perfect commercial property becomes available. The last thing you want to do is to find the perfect property for your needs, but not be prepared to get your offer accepted. This is especially true when the real estate market is hot and competition is high. To buy a commercial property, you must prepare and be ready to go at a moment’s notice. Consider the steps below:
- Be fully prepared to submit a written purchase agreement and commitment to buy a commercial property with a “buy in” from all decision-makers (contingent upon inspections and meeting zoning requirements, etc.).
- Have proof of funds to buy a commercial property.
- If obtaining financing, have a pre-approval letter from a reputable lender.
The above-mentioned items are vital. There may be more steps depending on the commercial property. However, no seller is going to accept an offer, open an escrow, and tie their property up with a buyer that is not ready to purchase and has not shown sufficient financial capacity to purchase their commercial property.
Most major commercial lenders will take you through a commercial real estate loan preapproval process. In some cases, an owner may be willing to finance the purchase for a buyer. In any event, be fully prepared to make an offer and demonstrate financial capacity to complete the purchase transaction.
Doing Your Homework and Negotiating Purchase Terms
If you’ve done your homework and market analysis, you should understand the fair market value of the commercial property. If you have the data, it should be easier to negotiate with the seller. However, there are many variables involved, and market conditions will dictate the price and the willingness of both parties to negotiate. Timing is also a key negotiating factor. It all boils down to the fact that the buyer will need an adequate amount of time to do their investigations. This process may include:
- Environmental survey reports
- Structure and systems inspections
- Verification of zoning
- Permitted uses and/or conditional use permits, if applicable.
If the commercial property is for an investment, you’ll want to review all tenant leases and even financial statements from the tenants. This is to ensure that they follow the terms of their respective leases. An experienced real estate attorney can help you do the homework. At Manning & Clair, we can help you understand what all stakeholders want and the timeframes you will need to do your due diligence. This information will help make sure the transaction ends up as a win-win for all parties.
An Attorney Review is Essential
Have us review the documentation and title information prior to signing any final sales contract or lease agreement. Our experienced real estate attorneys deal with commercial real estate purchase contracts every day. Meanwhile, a buyer may see one every few years. We can spot irregularities that you may not, and save you both time and money. Manning & Clair Attorneys At Law have extensive experience in providing Cleveland-area businesses of all sizes with expert advice as they navigate the sometimes choppy waters of a real estate transaction. We have the experience and knowledge to help you effectively run your business. Contact us to schedule an appointment now!
Manning & Clair Note: This information is for a general overview and discussion of the subject regarding real estate investing for beginners. It is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. Please consult an attorney for advice about your individual situation.
