Top 5 Due Diligence Mistakes Made in 
Commercial Real Estate

Top 5 Due Diligence Mistakes Made in Commercial Real Estate

Article by Sahaana M Jai

It's really a lengthy and complicated process to find an ideal commercial space for your business, and if it's not pursued in a proper way, it can cost you lots of money and also end up in a contrary place. So, when it comes to leasing an office space or any other commercial space for your business, it's very important for you to have a strategy and ensure that you are making a good decision based on the needs of your company. Below mentioned are a few most common due diligence mistakes that the tenants should be careful about.

  1. Incorrect Property Valuation: One most common mistake made by tenants while leasing a commercial space is that they don't valuate the property correctly. This might lead to lots of misunderstandings which would finally end up with a wrong deal. So, just make sure that you really are conservative when it comes to underwriting a deal. Check for sales competitors and other properties available in the market by getting in touch with the most active commercial agents.

  2. Not Understanding Lender's Underwriting Requirements: Before spending your valuable time, money and energy conducting due diligence, make sure that you have a prior discussion with the lenders about the loan amount they would put on your property. Because, these days the lenders have been very conservative and they consider lots of things like the physical condition, intended use, sale and lease comparable, environmental issues and so on. So just check with the lenders before taking it too far down the road.

  3. Not checking if the Property Complies: These days,it's not at all uncommon that a buyer gets to know that the property doesn't meet the compliance of building after purchasing it. The buyers usually get to know about it when the city inspector comes to check if there's any infarction associated with the property. So, it's always a good idea to have an architect, planner or the contractor to inspect the property and discuss the issues related to compliances during the due diligence period.

  4. Assuming There Are No issues: Usually the buyers or tenants who are in a hurry to get into a property make this mistake. They just want to get settled in a space which makes them assume that there are no issues. But sometimes the leases can have tripwires like contraction provisions, cancellation provision, fixed option rents, etc. As a tenant you must be aware of these provisions as it can put you in a bind making you devalue the property. So if you are not familiar with the commercial real estate leasing, it's good to have an attorney who can help you in reading the lease.

  5. Not Spending Time at the Property: When you are about to buy a property or leasing it, it's not just enough if you take a bland look at it as it's something that impacts your business heavily. Make sure you do a thorough round up going there at different times in a day; this gives you a better idea of what goes on there at the property. Sometimes it may also change your mind and the decision of buying the property. You won't just know what's going to be hidden; may be the moulds or the fire issues in some units to name a few. Spend enough time at the property and make sure that it's ideal for you.

Many commercial real estate investors are not aware of the things that they are unaware of! The above mentioned points surely give a brief idea and they'll also get to know the things they need to follow while looking out for a commercial space to set up their business.

Sahaana Jai, the author of the above article is working in a real estate firm offering services related to office space in Bangalore. She is also a blogger and a web enthusiast who writes articles and blogs on the commercial real estate trends in Metropolitan cities.

Article Source: https://EzineArticles.com/expert/Sahaana_M_Jai/1750468
http://EzineArticles.com/?Top-5-Due-Diligence-Mistakes-Made-in-Commercial-Real-Estate&id=9399290

Looking for commercial real estate investor leads
at an unbelievable low price?
[62,000 Database Names]







How to Contact Us:
E-mail:
barclay@netcarrier.com
Or phone or text us:
856-278-6103
Fax: 844-328-4827
Send us an E-mail with some details of your financing request. It is important to send your: Full name, PHONE NUMBER and a paragraph or two describing your financing needs. Please DO NOT forget to include your PHONE NUMBER.

Call us anytime 24/7. We are available for one-on-one discussion up to 11 PM Eastern Time and on weekends.
BARCLAY ASSOCIATES - Cherry Hill NJ


MINIMUM LOAN AMOUNTS

  • INVESTMENT PROPERTIES - COMMERCIAL MORTGAGE LOANS- Multifamily - $ 400,000 minimum loan amount. ($500,000 minimum if referred by broker.) Multifamily buildings must be 10 units or more. NOTE Possibly can do Multifamily loan amounts as low as 250,000 ($300,000 if referred by broker.) but must have 25% down payment.
  • OTHER INVESTMENT PROPERTIES Office building loans, self storage units, mobile home park financing, strip centers, warehouses and other commercial real estate property loans - $300,000 minimum loan amount ($375,000 minimum if referred by broker).
  • RAW LAND LOANS OR LAND DEVELOPMENT LOANS $1,000,000 minimum loan amount.
  • SBA LOANS-$500,000 minimum loan amount. ($600,000 minimum if referred by broker).
  • OTHER SMALL BUSINESS LOANS (NON SBA)- $500,000 minimum loan amount ($600,000 minimum if referred by broker).
  • FACTORING AND ASSET BASED FINANCING These are business loans using accounts receivable, inventory, equipment & real estate as collateral- $1,000,000 minimum loan amount.
  • OTHER TYPES OF FINANCING NOT INCLUDED ABOVE - contact us for minimum loan amounts.
Copyright 1997-2020 JS Inc./Barclay Associates-All Rights Reserved
Page copy protected against web site content infringement by Copyscape

BROKERS and other intermediaries- WE WELCOME BROKERS. It is EXTREMELY IMPORTANT that you [CLICK HERE] to obtain full information about our referral fee program and our referral fee rates to brokers.
WHAT WE DO NOT DO:
  • We DO NOT finance residential properties-only commercial.

To quickly move around other major areas of our website,
CLICK ON A SUBJECT BELOW:
[Financing Overview Page]
[Commercial Mortgage Loans]
[Income Property Loans over $2 million]
[Factoring]
OTHER SERVICES:
[Small Commercial Mortgage loans]
[PO Financing]
[CONTACT US]
[SEARCH our site]
[INDEX to Site]
We welcome brokers-for more broker information:
[Brokers Click Here]
FINANCING FOR:
[Multi-family buildings]
[Office buildings]
[Industrial buildings]
[Real Estate Developers]
[Shopping Centers]
[Mobile home parks]
[Hard Money Loans]
[Raw land loans]
[SBA Mortgage Loans]

Copyright 1997-2020 JS Inc./Barclay Associates-All Rights Reserved
Page copy protected against web site content infringement by Copyscape