The Louisiana commercial real estate market has come a long way since Hurricane Katrina and the floods of 2016. Even so, both new and seasoned real estate investors should take special care when purchasing commercial property. Here are some basic pointers to help get you started.
According to Forbes, hiring a structural engineer helps to ensure that you purchase buildings that are safe and in good shape. Here are just some of the tasks a structural engineer may complete on your behalf:
- Check for structural integrity
- Review surveys and inspection reports
- Conduct property condition assessment
It is also important to take a good look at the investment risk by comparing the revenue to expenditures. Some buildings may bring in high incomes, but if utilities are too high and rents are too low, it may still operate at a loss. For this reason, each commercial property is different and should be evaluated separately.
As is the case when purchasing a home, your due diligence should include permits and title. If there are title defects, you will want to identify them as quickly as possible, so that the issue may be resolved. Title fraud is a growing crime all across America, so you want to ensure you are purchasing from the rightful owner and that you are, in turn, the rightful owner after closing.
Finally, it is highly recommended that you have a clear financing plan in place before submitting your Letter of Intent. Sellers appreciate short closing times, and if the property is a good bargain, you may beat other buyers to the finish line. By completing all the research prior to placing your bid for the property, you help to ensure that even with a quick closing time, you are making an informed decision.
This article provides information on purchasing commercial real estate and is not intended as legal advice.