Buying Commercial Real Estate
Is it time to buy? Buying commercial real estate is for a stable business, where the facility purchase does not directly affect the bottom line of the business. Property ownership is far from the first hurdle a small business owner must clear.
Purchasing Commercial Property
Purchasing commercial property is an investment tool; a goal of the small business owner; not the primary concern of the business operation. Oftentimes it is the business owner’s CPA that first recommends property ownership. If you think you are ready, first see your CPA and then see your banker contact.
Some entrepreneurs are fortunate enough to consider a purchase of property early. The majority of business owners must establish their business first. Establishing a business can take years in some cases.
As a simple rule of thumb a business will need three years records of sustained growth, even marginal, proof of solvency, each year showing gains in growth and a profit margin that will allow such an investment to be justified…each year. These are minimums before approaching a lender.
Your real estate broker relationship is essential when looking into the “purchasing commercial real estate” question at this point. Your lender will want to know the approximate value of your investment so this is when, if you haven’t already, you should establish a relationship with a trusted broker.