Culver City Commercial Real Estate | Commercial Real Estate Agents SWI Realty Inc., a leading Westside boutique agency, provides commercial real estate services in Culver City and other parts of L.A. Finding Commercial Real Estate Deals When you get started in commercial real estate investing, you’ll need to know some of the basics that commercial real estate agents and other investors have learned. We have provided a short list that follows: •
How do professionals value commercial property?
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How to calculate rents and vacancies?
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How to factor in risks?
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How to determine the key metrics?
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How to find what why the property is for sale?
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How to evaluate comps?
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How to find the best property?
Square footage determines the value of commercial value in its markets and submarkets. These “comps” are more relevant in the commercial world than they are for residential property. Also, any leasing for commercial property extend farther into the future than common rents for apartments; that means more cash flow will grow out of investing in commercial property. Another difference: lenders are generally asking for 30 percent down on commercial property. So investors have to determine the answers to these questions: How much can you afford? How much income do you expect? How many tenants are leasing now, how much are they paying, and how much can you expect once you fill any vacancies? Risk is evaluated by estimating current damage as well as long-term potential repairs and remodeling needs.
Novice investors also must learn about these issues: Net Operating Income, cap rate and Cash on Cash. NOI is operating income minus operating costs. The cap rate is used to determine the present value of profits that come later. Cash on cash is a metric determined by the immediate and investors use it to compare similar properties before making an offer. Also, this is a good way to get a deal: Look for a motivated seller who has a pressing reason to leave the property. That seller will be more amenable to a negotiation. See what kind of competition you will have in filling space by checking vacancy rates at commercial properties nearby and determining the asking rents. But you don’t have to do it alone. You can rely on experts. If you are looking for commercial real estate in Culver City or other parts of Los Angeles, you can contact the SWI Realty Inc., at (310) 2048971 or Email to info@swirealty.net.