If you have the funds and the time to invest in commercial real estate in California, it would be a wise venture. Investing in real estate always has a great return, assuming you can hold on a property for sufficient time for it to build substantial equity. A short-term investment is possible when you purchase a cheap fixer-upper, make the necessary improvements and resell.
However, you do have to analyze the market before purchasing CA commercial real estate, to determine what length and type of investment would be more profitable. A longterm investment only makes sense if you think you can attract longterm tenants who can pay all the costs your ownership incurs.
Prior to investing your money in a CA investment property, consider:
1. Calculating whether you could achieve desired profit margins from your investment property.
2. The lengths of contracted leases by other owners of commercial real estate in southern California.
3. Economic growth in your area of interest, including job growth and population. Your California commercial real estate broker can answer these questions for you.
Action Steps
The best contacts and resources to help you get it done
Decide what size of California commercial real estate property you're in the market for
When figuring out the size of property you wish to invest in, consider the work you'll put into it. Not only do you have to service the needs of your tenants, but you have to finance any maintenance needs as well. Therefore, be practical and discuss your limitations with your California commercial real estate broker. Don't purchase commercial real estate in southern California that's a 6-unit property if a duplex is all you have time to service.
I recommend: DC Commercial and
Shea Properties are multifaceted California commercial real estate brokers that represent buyers and sellers with investment properties; including apartments, retail, industrial properties and land.
Increase profits by investing in California commercial real estate that needs work
If you are a handy person or you can afford to pay helpers, you may want to purchase a property that requires work. Again, you must be realistic about your capabilities. Don't overextend yourself, or you may end up paying someone to fix your mistakes. That would considerably increase the cost of your investment.
I recommend: CIT Commercial real estate provides advisory services and financial capital across all industries.
Asset Management Group also offers commercial real estate management in California and partners with entrepreneurs in their development needs.
Ask CA commercial real estate firms about foreclosed properties
Foreclosed properties can be a godsend, depending on the condition of the property. Prices are usually under market value, since the financial institutions who own them are eager to liquidate. Just be sure to inspect the property fully before you put down any money. Talk with California commercial real estate brokers to find out more.
I recommend: You can check out the
Department of Housing and Urban Development (HUD) and
Department of Veteran Affairs (VA) to view their lists of foreclosed properties. Go to
Foreclosures.com for a rundown of foreclosure law before you attempt to buy commercial real estate in California.
Tips & Tactics
Helpful advice for making the most of this Guide
- Get together with your accountant and discuss whether investing in CA commercial real estate meets your investment goals.
The official source of Commercial Real Estate in California is
the Commercial Real Estate in California page at Business.com
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