If you're embarking on a real estate investment adventure—particularly in a rental income-producing commercial property—you'll need to have these five experts in your back pocket. Assemble your dream team now before taking the plunge. Here are the experts you should have on your side.
1. Lender
Unless you plan to pay cash for your real estate investment, you'll need a lender to provide you with a commercial loan. Whether from a bank or a private lender, there are many options for financing an acquisition, or even refinancing an existing multifamily asset in your portfolio, which include Fannie Mae, Freddie Mac, HUD-insured, bridge, or mezzanine loans. Do your research now to find a reputable lender, such as Greystone *, which has 30 years of commercial real estate lending, investment, and advisory experience.
2. Contractor
You need a professional contractor to determine whether a property is worth investing in by assessing any anticipated repairs, as well as any further upgrades you plan to make. Working with a general contractor also allows you to develop the trust needed when you have multiple people involved with new construction or significant renovation work, such as plumbing or electrical. A contractor can also serve as or connect you with a handyman for maintenance issues, which will inevitable arise over time.
3. Attorney
You preferably will use an attorney who specializes in commercial real estate. Such an attorney can protect your finances and reduce your risk when you are buying commercial property. Your attorney should review the purchase contract to advise you whether it is fair and whether you have protections against structural problems or environmental issues. This person also helps you through the complexities of a deal, drafts leases, and reviews construction documents.
4. Accountant
Before you buy, an accountant can give you advice on what you can afford by looking at possible development expenses, operational costs, and projected profits. Your accountant also helps you prepare an operating budget. Once you own the property, your accountant will help you stay on track with paying taxes on your rental income, recommend tax-saving strategies, prepare a budget, and provide you with financial reports.
5. Property Manager
Once you have more than 10 units, it's probably a good idea to hire a property manager to screen tenants, fill occupancies, collect rents, run status reports, pay bills, and to manage general maintenance and repairs. The property manager, which usually charges a percentage of annual rental income, also serves as the point person for tenants who have concerns or emergencies.
In Conclusion
Investing in rental income-producing property can prove to be very beneficial. Once you have the right support on your side, you can be more confident in making that first deal happen.