Building Commercial Real Estate To Sell For Profit.
Building commercial real estate to sell
Constructing commercial real estate to sell can net you a good profit if you find an ideal location and act as your own general contractor. If you are familiar with the building industry and have ever acted as your own general contractor, building commercial real estate to sell can be one way you can invest in the commercial real estate market.
Even if you have no knowledge of real estate, you can make money in commercial real estate by forming a partnership with a general contractor. Unlike the residential real estate market, the commercial real estate market is booming. Many real estate investors have switched from investing in the residential market to the commercial real estate market.
For those who have little or no real estate knowledge, the best commercial real estate investments would be a group investment in property where someone else is doing all of the work and you need only invest capital. Professional people, particularly doctors, lawyers, professional sports and entertainers often make such investments. It is wise to spread your commercial real estate investments around if you are participating in group ventures or limited partnerships so that if one of them fails, the others may make up the difference.
Group real estate investments can range from a few partners getting together to purchase commercial real estate, to a large conglomerate of investors, each of which puts up a small amount of money and gets a small percentage in the property. This is generally done when malls or other large developments are built. This is one way the developer raises capital for the project. Once the project is completed, it is usually sold and the investors get a return on their investment that is usually a lot more than they could get in a bank, money market or even in most mutual funds.
The first thing you need to do before starting constructon of commercial real estate to sell is to find a good location. Know the area and what is needed. If you are interested in building a strip mall, for example, you will want to make sure it is successful. Look for an area where there is a lot of new residential real estate to find the perfect location for your strip mall.
You will have to make sure you can get the property zoned for business use. This will involve going to the zoning board of the municipality in which the property is located and applying for a rezoning permit. You can make your property purchase contingent upon getting the proper zoning.
The property will need to have ingress and egress which means you can get in and out of the property from the public road. If you have to cross over private property to get to your property where you are planning on building commercial real estate to sell, you will need to get an easement from that property owner. An easement that benefits your property is one in that gives you the right to use other property for your own benefit.
You will also have to make sure that sewer, water, utilities, curbs, sidewalks and lighting are in place. If you are building a business such as a restaurant, make sure that you have enough parking for the establishment. Most municipalities have restrictions on parking for businesses so as to insure enough spaces for the establishment without impeding on the street or surrounding properties.
If you plan to act as your own general contractor, you will have to submit your building plans to the municipality for approval prior to getting a building permit. If building a restaurant or other food establishment, you should get an environmental report to make sure the soil is not contaminated.
Once you have received your building permit, you can begin building commercial real estate to sell. Once your building is completed, whether it is a free standing store or strip mall, you can be ready to settle the property with the buyer. In most cases, when building commercial real estate to sell, you will have buyers for the property before completion. If you do not get a buyer prior to completion, you can rent the property out until you get a buyer. In some cases, this may work out better as a buyer is more inclined to purchase commercial real estate that is already established than vacant property.
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