Buying Commercial Property With a Metro Charlotte Area Expert
The process of buying commercial property can be complex, but getting each step right is vital to making an informed decision that will benefit your business for years to come. We ensure that no steps are missed and no unwelcome surprises happen in your next commercial transaction.
When you work with Regent, you can expect:
- A Custom List of Potential Properties: We’ll run a thorough market report to find potential properties that fit your qualifications.
- Expert Help Throughout the Due Diligence Process: You deserve to feel confident that you have all of the important information on your potential new property.
- Closing Support: We’ll help you navigate all the closing documents.
- Focus on Your Business: Let us worry about the real estate details while you focus on your business.
- No Extra Cost: Having an experienced broker doesn’t cost you any extra.
We’ve helped hundreds of clients with their commercial real estate investments. Our top priority is your success. Get your free market report today, or call us to talk through your real estate needs.
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4 Aspects to Consider When Choosing a Property to Purchase
Navigating the Process of Buying Commercial Property
- Step 1 – Securing Financing
- Step 2 – Market Report
- Step 3 – Make An Offer
- Step 4 – Due Diligence
- Step 5 – Closing
- Step 6 – Moving In
Buying Commercial Real Estate: Navigating the Market for Success
Whether you’re looking to buy an existing building and renovate it for your needs or buy land and build, purchasing a commercial real estate property is a process that can be both intimidating and overwhelming. Regent CRE are the local experts when it comes to buying property in metro Charlotte, ensuring that your process goes smoothly and that you don’t end up with any unwanted or costly surprises. Get expert insight into buying commercial property in North and South Carolina with Brian Smith, SIOR, and the Regent CRE team.
Why Work With a Broker?
Did you know that when you work with a real estate broker, you get all of the advantages of expert commercial real estate experience at no extra cost?
For commercial real estate buyers, finding a property is just the first step in the process. After making an offer, it’s time to start on the due diligence process. This includes a series of steps that potential buyers need to walk through in order to gain valuable information about potential problems with the property. Getting a survey, environmental inspection, and appraisal are just some of the steps you’ll need to take to determine whether you’re making the best investment.
As a business owner, you’re the expert in your field. And we know that you want to devote your time and energy into your daily business operations – not into understanding surveys and making more phone calls.
The best way to avoid frustration and costly real estate mistakes is to work with a commercial real estate broker who’s gone through each of these steps countless times before. When you work with Regent CRE on your commercial real estate purchase, you can relax, knowing that we’ve got your back throughout the complex process.
No Extra Cost
In addition to having a team of experts on your side, you don’t pay any extra. Why not? Well, typically in commercial real estate deals, the current property owner is responsible for paying 6% of the purchase price as a commission. This either goes to the seller’s broker, or is split between the buyer and the seller’s broker. Either way, this amount comes out of the pocket of the current owner – not yours. So whether you benefit from the expertise of an expert broker or not, you pay the same amount.
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4 Aspects to Consider When Choosing a Property to Purchase
What should you consider when honing in on your ideal commercial property? Whether you’re a small business owner or a commercial investor, having a bird’s-eye view of your property choice can help you avoid everything from major issues to mid-level inconveniences down the road.
1. Building Class
Commercial buildings are divided into groups labeled Class A, Class B, and Class C. What does this mean?
- Class A. These buildings have the latest features, best construction, and are situated in ideal locations. The highest-quality buildings fall into Class A, so of course, these tend to also be the most pricey options.
- Class B. This tier consists of respectable buildings that tend to be a bit older and/or less desirable than Class A properties. They may also be in areas that are a bit less accessible.
- Class C. These buildings usually need work. Class C properties may be made with inferior materials or need significant repairs and updating. Often, they’re also located in unpopular areas.
Understanding your investment goals is the first step in determining what building class will best suit your needs.
2. Zoning
Understanding zoning laws is vital when you’re making a commercial real estate investment. Local regulations determine what activities and types of buildings are allowed in different areas. And getting a property rezoned is not easy (nor is it guaranteed to work).
Zoning influences factors such as the uses of a property, signage and parking requirements, pollution allowances, and more. In order to make a good investment, make sure you have a thorough understanding of zoning laws in any potential new location.
3. Location
The right location plays a crucial role in your real estate success and can influence your cash flow for years to come. Whether you’re searching for industrial buildings, retail stores, warehouses, or a flex building for your own growing business, here are a few questions to ask in regards to location:
- What are the zoning requirements of the property?
- Where is the business’s target market in relation to the property?
- How much are property taxes?
- How far is the property from the employee base?
- How will future developments in this area affect the property?
- How is accessibility (distance to highways and freeways)?
- Does the location offer good visibility?
- What do local growth trends look like in this area?
For commercial real estate investors, working with a local broker can give you key insights about the locations you’re considering, offering you a leg up on your investment success.
4. Additional Costs
As you consider a property, take into account any additional costs that may be incurred over and above the selling price. Interest rates, property taxes, utilities, and maintenance costs can all impact your monthly payments and/or rental income.
If you don’t have the answers to all of these questions, don’t worry. With CCIM– and SIOR-certified broker Brian Smith, you can benefit from the experience of a local expert who’s been through the process hundreds of times before. Let Brian and the Regent CRE team guide you on your search for your ideal CRE investment.
The Process of Buying Commercial Property
When you partner with Brian Smith and Regent Commercial Real Estate, we’ll walk with you through every step of the process. We’ll take care of the gritty details, so you can focus on running your business.
Step 1 – Securing Financing – Get Regent’s Expertise from the First Step
What financing options are available to you? SBA loans, permanent loans, hard money loans, and blanket loans are just a few of the options for securing financing for your commercial property. Whether you’re walking through a loan process with a financial institution or you have cash on hand to make the purchase, we offer guidance for choosing the best option and maximizing your savings on your new property.
We also help our clients look even further down the road, discussing potential ways that your property can be an asset to you even years later and into retirement.
More than just searching for properties and scheduling a showing, we prioritize listening to your goals and your business plan. We want to make sure that we have a thorough understanding of your priorities so we can create a custom plan that will get you the best return in your business.
Step 2 – Market Report – Get a Custom List of Properties That Fit Your Needs
We offer free market reports so that you can have a custom list of the options that are available to you. Our comprehensive search database tools ensure that nothing is missed.
As locals to the metro Charlotte area, we’re deeply connected in the Charlotte real estate community. Our years of experience and network of relationships give us even more opportunities to find potential properties for our clients, including those that may not yet be listed to the public.
The metro Charlotte market has a wide variety of different types of commercial properties available to prospective buyers – from office buildings and retail space to flex options and industrial complexes. However, in this area, only about 20% of these are available for sale, while the other 80% are for lease.
Whether you want to buy land or renovate an existing building, we’re here to help you determine the best option for you with the available real estate properties.
Step 3 – Make An Offer – Experience Regent’s Proficient Negotiation Expertise
The way a proposal is negotiated can have an enormous impact on the end result of your new buy. We’ve done this hundreds of times before, and we understand how to get you the best deal through the negotiation process.
Once your offer is accepted, the due diligence process starts. This process typically ranges from 30-75 days.
Step 4 – Due Diligence – Ensure Nothing Is Missed
The ultimate goal of due diligence is to determine if you want to move forward or not. This period includes inspections such as a survey, environmental inspection, and an appraisal with the bank, as well as with a third party appraisal.
After the due diligence period, if you terminate the contract, you’ll forfeit the earnest money. This is a refundable deposit that you put up, which is held by an attorney or a title company in order to show your interest in the property. However, if you terminate the contract for any reason or no reason during the due diligence period, then you get the earnest money back.
Therefore, the due diligence period is a very important pocket of time used to figure out if the property is a good option for you. It’s highly important for this process to be completed properly so that you don’t end up with major unknown issues with your property.
It’s vital to have a thorough understanding of what needs to happen during this process, ensuring that nothing gets missed. Unfortunately, major problems with a building or property can be overlooked when each step is not carried out correctly. These types of issues can cause incredible financial burdens down the road, like in the following true story from one of our clients.
Case Study: Finding an underground leak
We recently worked with a group who was going to buy an old gas station. Although the property seemed like a great fit, through the due diligence process, we ended up finding out that some of the tanks underground had leaked, leading to contamination. Fortunately, we were able to identify this leak before they closed on the property.
However, if the group had gone through the process on their own without an experienced commercial real estate broker, they likely would have purchased the property without knowledge of the leak. In the long run, their $250,000 purchase would have led to a million dollar environmental issue!
We’re glad this story had a happy ending. Our top priority is your real estate success, and ensuring that every element of your property is thoroughly checked is a crucial part of the process of successfully buying commercial property.
Step 5 – Closing – Let Us Navigate the Complex Formalities
The pages upon pages of closing documents can seem like a different language. As experts in our field, we’ve done this hundreds of times before. We’ll handle the complex language and make sure no details are missed, taking the stress of closing off your plate.
Step 6 – Moving In – Regent CRE Is Here For You Every Step of the Way
Finally, it’s time to move in. Before moving in, renovations are sometimes necessary in order to adapt the building to your business purposes.
An expert commercial real estate agent can help you figure out what types of improvements might need to be made, and the best ways to go about the projects. This is common for many of our clients. As well-connected Charlotteans, we can also provide contractor suggestions for any work that needs to be done on your building.
Focus on Your Business
Like most owners of small businesses, we understand that you’re an expert in your field. Your time is highly valuable, and we know that you want to spend it on your business, not on navigating the commercial real estate market.
With the right team of experts, you can focus on what you do best, knowing that we’ll work out the complicated details and that you have a safe landing for your next commercial building, whether it’s office space, flex, industrial, IOS, or retail.
Tired of Paying Rent?
Renting office, retail, and industrial properties can be a great way to try out a property without the commitment of a big purchase. But many business owners find themselves tired of seeing the cash flow leave the bank account each month for rent and having no control over increasing rental rates.
Purchasing your first commercial property not only gives you control over your property, but it’s also an investment strategy for years to come.
When you buy a property, you can put it into an LLC, which is essentially a holding company. The LLC then owns the building, and the business does a lease with the holding company (LLC). Eventually, this becomes a part of your retirement plan as a business owner. In the future, you now have the option to sell the business, keep the building, and lease it back to a new tenant. Now, you have a whole new revenue stream.
FAQs About Buying Commercial Property
Is it better to buy or lease commercial real estate?
The decision to buy or lease is a personal one and depends on factors such as your current cash flow, plans for expansion of the business, how long you want to stay at a property, and how confident you feel in the location, among others.
The major benefits of buying are that you get to build equity and you can pretty much do whatever you want with the building and property.
On the other hand, leasing gives you more cash on hand and releases you from having full responsibility for the property. Plus, it’s easier to move on if and when business needs change.
Can you buy commercial real estate without a real estate broker?
Although it’s possible to buy commercial real estate without a broker, it can be a dangerous endeavor. The complex components of buying a property require a thorough understanding of the real estate process. Forgotten steps or a misunderstanding of various components of the buying procedure can lead to missed negotiation opportunities, potential environmental problems, and overall higher costs both immediately and down the road.
Plus, working with a broker doesn’t cost any extra to you as the buyer.
What’s the best way to find the right commercial property to buy?
There are a number of online platforms that anyone can use to find available commercial properties. Most of these platforms will allow you to input search details such as location, type of property, price, and number of square feet.
However, the best way to access exclusive properties that may or may not be listed online is to work with a commercial real estate broker. Real estate brokers not only have access to the most comprehensive search database tools, but often have connections that allow them to be privy to properties that haven’t even been listed yet.
What is the most profitable type of commercial real estate?
While it depends on the area, office, retail, and industrial commercial real estate properties tend to be the most lucrative. Prioritizing tenant retention as well as owning properties with a higher number of tenants are also effective ways to increase cash flow.
Find Your Next Commercial Property with Regent CRE
If buying a commercial property lines up with your business or investment goals, don’t do it alone. Work with an experienced broker to navigate the process of securing the best property for you. Not only can expert knowledge of the buying process save you from costly mistakes in the long term, but it doesn’t cost anything extra.
Brian Smith, SIOR, and our team have closed nearly 1000 sales and lease transactions in the metro Charlotte area, and we have the expertise, tools, and experience to lead you through a successful commercial property purchase with less hassle.
Contact us today to get started on the process of finding just the right property for your needs.
