Flipping Commercial Real Estate? Follow These Three Pro Tips

One of the most exciting job opportunities to explore this year – whether pursued full-time or as a second job – is flipping properties. While flipping has been the subject of many reality TV shows, both residential and commercial, property investing has enjoyed upticks over the last few years, especially in urban areas.

In fact, for the first time in over a century, population growth in urban areas is actually happening faster than population growth in the suburbs, as of 2011. In March 2016, the average U.S. home sale price was $186,000, and roughly 32% of people looking to buy were first time homebuyers. Likewise, the commercial sector is stronger than it has been in years. Commercial real estate investing is still a popular form of flipping property, but can be very difficult if you lack experience in commercial practices. Here are a few tips for investing in commercial property.

Offer the Property Out to Tenants

A great way to improve the net operating income is by renting the property out to tenants. Commercial real estate investors have been known to search for properties that have tenants currently renting, which generates a steady income.

Maintaining a constant cash flow by collecting rent payments is a great way to improve the worth of the building once the prospective buyer values the property. Plan to do your research when you find a building that currently has tenants, as well as a Plan B if they suddenly leave.

Make Sure the Next Buyer Spends More Than You Did

Simply put, you want your investment to yield a profit. Investing in a property is typically done so to gain a return after you’ve completed necessary work to add value.

If you spend a certain amount of money to purchase a property and perform customized renovations, then make sure the repairs are put into place wisely, so that the subsequent buyer ultimately spends more purchasing the property than you originally did. If for some reason this does not end up the case, you may experience a loss financially, however, a very valuable lesson learned for future ventures.

Renovation Financing

Unless you have hundreds of thousands of dollars to dispense, you probably shouldn’t risk funding the entire project, to include renovation, with your own personal money. The best way to be successful in a flip is to leverage your money by finding a form of renovation lending with a secured short-term loan program.

Preferably one that will escrow the funds and is tailored to projects specifically designed for renovating.

If you’re interested in commercial real estate investing, contact Growth Investments Ltd : GIL Lending today to get started.