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As wonderful and constant as commercial real estate
is Cheap
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ruin the interest, investment and return on a property. Besides inaccurate
assessments and risks that are beyond your comfort zone, the only real reason
these pitfalls occur is because of the lack of due diligence that you perform.
By not investigating deeply enough, not overturning every rock, and rushing into
what seems like an awesome deal, you can experience some horrible events that
can literally cost you hundreds and thousands of dollars.

These are
setbacks I hope you never experience by asking every question, verifying
everything, and assuming nothing.

Below you will find some unfortunate
and common mistakes that can occur if you are not completely on your
game.

Some of the major pitfalls in commercial real estate are related to
the zoning and use of a property. Brokers may offer information that is not
accurate about the rezoning and use capabilities of a property. Although many of
the people in this business are honest and have
integrity Cheap
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agents that will do and say almost anything to sell a property.

Some
problems that arise may include not checking with the city planning and zoning
decision makers to see if a property can and will be able to be rezoned to the
zoning that is expected. Also, just because the zoning may include your use, you
must check with the city to make sure there are no special contingencies
regarding use.

The last thing you want is to have a property you believe
can be re-zoned to a higher and more profitable use, and after you purchase it,
realize you cannot do what you intended! This can mean a less of a return on
investment, or a complete loss of an investment. Believe me, situations can get
very bad regarding the rezoning and use of a property, and fighting with the
city will take more
money Cheap
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Another
pitfall that can arise is purchasing a building that is leased, and then losing
tenants due to leases or rental agreements being up! It is important to see and
verify the leases of a building to make sure you will have some income to cover
the debt service while you change, renovate, or do whatever it is you are going
to do with the property. Verify you will have tenants when you purchase the
property; otherwise, you may not have enough income, and this can leave you in
the red.

It must be acknowledged that every property and situation can
differ greatly from another. Because of this, there can be many different ways
that a property can go. For this reason, all what ifs must be
addressed Cheap
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scenario. When you limit yourself on exit strategies, you increase your
possibility for failure.

With every property you must ask yourself, What
is the worse that can happen? Weigh the risks and the probability of the worst
happening, and either plan an exit strategy for this possibility, or don't move
forward. You must look at everything from the worst to best case scenario, and
have an exit strategy for each. Not only will you be prepared for anything that
comes your way, but you will have less of a chance of really getting buried and
losing money on an investment gone badly.

In commercial real estate, I
often see a person trying to save a few thousand dollars that ends up costing
him or her hundreds of
thousands Cheap
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negotiations. It is always important to know what you are willing, and not
willing to do when you go into negotiations regarding the purchase or selling of
a property, as well as leasing and rental agreements.

For example,
asking for $35.00 per square foot and being offered $30.00 per square foot,
(reasonable in this situation), and assuming the interested party is very
motivated about the space, and coming back with $33.00 a square foot and nothing
less, my cause the loss of the three year leasing
agreement Cheap
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because it is not leased out is definitely not worth it!

Take the $30.00
per square foot; get the property leased up, and make an agreement that the rate
will increase two or three dollars every year after. Don't lose the tenant
because you want to play hard ball in negotiations when, really, you can make it
work!

As you become more educated and get closer to reaching your goal of
being a real estate insider, you may want to branch out into new markets and
expand your comfort zone. This is great. However, you must realize there are
many differences between various types of properties. Doing a deal with a 120
unit apartment complex is different than a 55,000 square foot office building.


When moving into different markets, items can easily be
overlooked Cheap
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are not aware of them. It is often a good idea to partner with someone already
in that new market so that you may have the benefit of experience and know-how
on your side. Learn form this venture so you will be more familiar with the
market, property, and how it should be addressed. It is easy to get in over your
head with new markets that can lead to major and expensive problems.

As
you continue on your adventure in commercial real estate, be sure to do all your
homework regarding a property. You will be less likely to run into problems, or
better yet, be prepared to fix the problems if financially worth it. Never
assume everything is as it appears,
because Cheap
Austin Johnson Jersey , more often than not, it isn't! You must play smart
in this game, or you can lose everything. Use you resources to get the best and
most accurate information and you can avoid these pitfalls in commercial real
estate.