does any1 know what factors need to be considered when valuing a commercial property?
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Working capital. The most important facet in considering purchasing commercial property is how it affects the owner's working capital. The initial investment of the purchase can impede the business' working capital, restrict expansion opportunities and affect the business' ability to operate during an economic downturn.\n\nFunctional obsolescence. Over time, business processes change and demands fluctuate. A building may become functionally obsolete if operations change due to advances in technology or other factors. Likewise, if the workforce size increases, space configuration requirements may change, necessitating significant investment in a building's reconfiguration. Therefore, it is important to consider a building's construction and its flexibility when it comes to remodeling.\n\nEconomic obsolescence. Does the building have enough size and amenities to reflect the company's image? Does the age of the building affect the ability to produce revenue in concert with the company's projected growth?\n\nDemographic obsolescence. Factors that affect the desirability of the location can change the value of the investment. Deteriorating neighborhoods can raise employees' concerns about safety and security and require unforeseen costs of protective services and, ultimately, lower the market value of the investment. Changes in nearby roadways and public transportation may make it more difficult to attract desirable employees. If the business owner plans to sell the company in the future, demographic obsolescence can create a significant decrease in the value of the business.\n\nAppreciation of value. Short-term economic fluctuations aside, historically, buildings in the Austin area have appreciated at an average of 3.5 percent per annum. Also, keep in mind that a portion of the mortgage payment is debt service, and the owner's equity in the building increases as mortgage payments are made on the property.\n\nTax advantages. The depreciation expense connected with the value of the building is a reduction of ordinary income, up to 40 percent, assuming the owner is in a 40 percent tax bracket. At the time of sale or disposition, the owner is taxed on the recapture of the depreciation as a long-term capital gain of 15 percent. In actuality, taxes are not paid on the difference between the depreciation and the long-term capital gain, which, in this case, would be 25 percent -- a significant savings for the owner.\n\nHedge against inflation. Building ownership secures a guaranteed cost for occupying the location of choice. As building replacement costs for a like kind and quality increase, rental rates increase as leases renew. However, these increases are circumvented if the business owner also owns the location. Furthermore, as the replacement costs increase, so does the value of the building.\n\nControl of property. Along with the pride of ownership, a business owner who owns a location is able to control the unique value of the property -- for example, signage, expansion opportunities, level of maintenance and improvements. Additionally, the owner determines the building's rules, such as hours of access, air conditioning usage and types of businesses that may occupy a portion of the building.\n\nTo ensure a smooth experience, prospective buyers should put together an acquisition team. Buyers will need a certified public accountant to analyze the viability of the purchase, a source to secure financing options, a real estate broker to locate properties, and a real estate attorney to draft the offer and evaluate and approve closing and loan documents.\n\nAlso, it is imperative to have a structural engineer and specialty contractors conduct inspections of the building's structural, mechanical and exterior systems. An architect should be enlisted if remodeling is necessary.\n\nProfessional guidance in purchasing a commercial facility can make the difference between a rewarding experience and fi
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Pros\nTenants that pay off your mortgage\nDepreciation write-offable on your taxes (often leaving you with no taxable cash flow)\nCASH FLOW!!!\nThe buying price is based more on the operations of the property than what the market dictates (as in single family)\nThe building itself will often secure the mortgage with its positive cash flow.\nThe amount that is added in equity to your property every year is substantial with a property as big as 16-units.\nMore ways to add value and cash flow to the property than with a single family unit\n\nCons\nTenants (if you choose not to use a property manager)\nMaintenance (but that is the same as any property and you appear to be versed in that)\nThe selling price is based more on opertaions than what the market dictates (as with single family)\n\nGood luck
195069
My background is Business Admin., and I own a mortgage company.\n\nIn business one of the most important factors to learn is risk assessment. Are the rewards greater than the possible loss?\nFrom your question my friend, is sounds like you already know what the best option for you is.
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Depends on the size of the store, the rent, the number of employees, the range of items in stock, insurance, the state of the economy... there are any number of variables to consider when opening a business.
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Proximity to interconnecting roads (highway, intersections, etc...)\nVentilation system to include A/C & heating requirements\nAge and maintenance records of buildings (if the landlord can't provide maintenance records, beware)\nRental agreement/requirement of lease/payment plan, tenant obligations, prohibited requirements\nZoning requirements\nAdvertising and promotional opportunities, such as a fee for placing company name on mall sign, etc... \nParking availability and security, to include intrusion of surrounding businesses. \nInsurance requirements by landlord and tenant\nFinancial investments in a move\nLocation of property to potential customers/clients
928120
That will depend on what kind of transaction it is.  \nThey may include:\n - financing\n - earnest money\n - closing date\n - title issues\n - closing costs\n - price\n - down payment\n - inspection contingency\n - survey\n - zoning\n - future use\n - lead based paint\n - mold\n - insurance\n - temporary lease\n - extension\n - option period\n - non realty items\n - points (as they pertain to the loan)\n - warranties on appliances\n - ceiling fans\n - chandeliers\n - drapes\n - appraisal\n - flood zones\n - endangered species\n - septic \n - well\n - underground springs\n - deaths on the property\n - violent crimes on the property\n - schools\n - home owners association\n - highways\n - lawsuits\n - wills\n - heirs\n - deeds\n - encumbrances\n - clouds on title\n - easements\n - right of way\n - encroachments\n - termites\n - livestock\n - mean high tide\n - riparian rights\n - mineral rights\n - etc.\n - anybody think of others?\n\nThese are some of the things that could come up on a RESIDENTIAL real estate deal.  Commercial deals are of course more complicated.  \n\nDon't let the list scare you - your Realtor will know what things to address, what to look out for, and how to best help you in your transaction.
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Probably you may want to list it on the Web.\n\nIf it is not a one-shot situation: as in you are renting-out units, consider building your own site. A resource for this  is: http://selling-a-service.first411.com\n\nSorry - but you need to be more specific in your question so i took the liberty of sharing 2 possible options.\n\nHope this helps you. Good Luck!
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Commercial or residential?\n\nFor either there are various rules that effect LTV (Loan to Value)\n\nIn residential the max loan can be limited due to income or occupancy type along with other factors.\n\nIn commercial, the LTV is determined by calculating the NOI ( net operating income ) and several other factors.
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To do a real assessment of worth you'll have to value the business based on cash-flow and bring each year to present value. There are spreadsheets available on-line to do this. Just plug expenses, sales, projected growth, etc. and you'll get your answer. If you want the quick and dirty: you'll recuperate the investment in a little over 3 years. Plug the interest you want for your money, (say 7%). Bring it to present value and you'll still recoup in 5 years or less with the growth you mentioned. That is really good. If you like what the business is about and you don't mind doing the work in case one of your guys gets sick and have the ability to make it grow, then go for it.
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Patricia, you should get educated before taking a plunge into the business. Commercial real estate business is a different beast. Do you even know how motels are priced?
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Commercial property is on the rise. Anything to do with retail is on a current sell out. Even investments in commercial property is rising very well. If youre in Rajasthan, the place is supposed to pick up rapidly for the IT and BPOs. Also, manufacturing in Rajasthan is on a rise. Contact some architects there. Or get in touch with a Civil Engineering/Construction firm immediately.
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It depends on the equity later on down the road. Does the \n\nproperty hold value? Is this the only place you have \n\nlooked? It is your investment which you would need to think \n\nabout- it not just a yes or no answer.
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Contact a commercial Real Estate Agency and give them a list of your requirements. They will find the properties for you.
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I work for a firm like that.  Yes you share in the profits in the form of fees.  Fees for locating, selling, fixing etc.  Basically, learn the abc's of real estate which are locating as-is deals, valuation, and repair estimation.  Locating as-is deals are pretty easy.  Valuation requires knowing what other properties have SOLD for in the area, so befriend a Realtor (or get your license in a weekend).  Estimating repairs takes experience so befriend a good contractor.  Then approach Homevestors for starters as these guys do pay.  As you gain experience, private investors will be begging for your services.
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Call a real estate agent in the area.  They can do a CMA (Comparative Market Analysis) which should give you a pretty decent idea of property values there.
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Do a Yahoo/Google search for "commercial real estate terms" and you will get lots of sites.\n\nIf you want to check out commercial property listing go to www.loopnet.com. You can become a basic member for free and preview properties. My wife is a commercial realtor and this is the site they use to list their properties.\n\nGood Luck
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I do not know anyone off hand but if your looking to have it appriased because your looking to do a new loan DON'T! Most commercial lenders will charge you for the appraisal and send out their own company  to do the appraisal. If you do this then there is a VERY good chance you'll pay twice. This is completely different than residential where your broker will schedule the inspection and the lender will accept it.\n\nDepending on the size of the properties these inspections can cost over $4,000.\n\nKevin 866-562-6838 x 106\nkruorock@firstratelending.com