Investing in commercial real estate can be a lucrative opportunity for new investors in Milwaukee. However, it can also be a complex and challenging process. To help you navigate the world of commercial real estate investment, we’ve put together this guide with ten things you should and should not do as a new investor, as well as how our team of professional buyers at Northwoods Property Resources can assist you on your journey.
What to Do:
1. Research the Market: Before investing in commercial real estate, take the time to thoroughly research Milwaukee’s market trends. Look into current vacancy rates, which fluctuate in popular business areas like the Third Ward and East Town. Understanding rental rates for different property types—such as retail, office, or industrial—can provide insight into potential returns. Additionally, pay attention to business sectors growing in Milwaukee, such as healthcare, tech, and hospitality, as these influence demand for commercial spaces. Consulting Milwaukee’s economic reports and city planning resources can give you a clearer picture of what areas and property types are likely to yield steady returns over the coming years.
2. Set a Budget: Investing in commercial real estate requires careful financial planning. Begin by setting a realistic budget that includes not only the property’s purchase price but also ongoing costs like property taxes, insurance premiums, and regular maintenance. Unexpected repairs or updates to meet Milwaukee’s building codes can add significant expenses, so we recommend setting aside a reserve fund for these contingencies. Working with a commercial real estate financial advisor can help you build a comprehensive budget that aligns with your financial goals while anticipating both immediate and future costs.
3. Work with a Professional: Investing in commercial real estate can be a complex process. Working with a professional real estate buyer, such as the team at Northwoods Property Resources, can help you navigate the process and make informed decisions.
4. Consider the Location: Location is a critical factor in commercial real estate investment. Consider the accessibility, visibility, and proximity to amenities when choosing a property.
5. Understand Zoning Regulations: Zoning regulations in Milwaukee vary by district and can significantly impact how you can use a commercial property. For instance, some zones permit retail and office spaces, while others are strictly industrial or residential. Before finalizing any property purchase, consult Milwaukee’s zoning maps or contact the City of Milwaukee for guidance on zoning classifications, restrictions, and any recent zoning changes that may impact your intended use. Properly understanding these regulations can help you avoid costly legal issues and ensure the property supports your business plans.
6. Get a Professional Inspection: Before purchasing a commercial property, it is important to get a professional inspection to identify any potential issues or repairs that may be necessary.
7. Have a Plan: Have a plan for how you intend to use the property and generate income. This can include leasing the property to tenants, developing the property, or flipping the property.
8. Consider Financing Options: Financing your commercial real estate investment involves evaluating multiple options, each with distinct benefits and drawbacks. For example, traditional bank loans usually offer lower interest rates but may require a substantial down payment and solid credit history. Private lenders, while more flexible with credit requirements, often come with higher interest rates and shorter loan terms. Crowdfunding can allow you to invest with smaller capital, but it may involve more risk and a lack of direct control. Given the significant financial implications, it’s wise to consult a financial advisor familiar with Milwaukee’s market to help you identify the best financing option for your budget, investment goals, and risk tolerance.
9. Build a Network: Building a network of professionals, such as attorneys, accountants, and property managers, can help you manage the property and make informed decisions.
10. Stay Informed: Stay up-to-date on market trends and changes in zoning regulations to ensure that your investment remains profitable.
What Not to Do:
1. Rush the Process: Investing in commercial real estate requires patience and research. Do not rush the process or make impulsive decisions.
2. Overlook Potential Costs: Make sure to factor in all potential costs when setting a budget for the investment.
3. Ignore Location: Location is a critical factor in commercial real estate investment. Do not overlook the importance of location when choosing a property.
4. Ignore Zoning Regulations: Zoning regulations can have a significant impact on the use of a commercial property. Do not ignore local zoning regulations.
5. Skip the Inspection: Skipping a professional inspection can lead to costly repairs and issues down the line.
6. Lack a Plan: Have a plan for how you intend to use the property and generate income. Do not invest without a clear plan in place.
7. Ignore Financing Options: There are several financing options available for commercial real estate investment. Do not ignore these options and solely rely on your own capital.
8. Go It Alone: Investing in commercial real estate can be a complex process. Do not go it alone and work with a professional team, such as the team at Northwoods Property Resources, to assist you.
9. Neglect Networking: Building a network of professionals can help you manage the property and make informed decisions. Do not neglect networking.
10. Remain Uninformed: Stay up-to-date on market trends and zoning regulations to ensure that your investment remains profitable. Do not remain uninformed.
How Northwoods Property Resources Can Help:
At Northwoods Property Resources, we understand the challenges that new investors face when investing in commercial real estate. That’s why our team of professional real estate buyers is here to assist you every step of the way. We can help you find the right property that fits your budget and financial goals. In addition, we can provide valuable insights into the Milwaukee market trends and assist you with the financing process. Our team has years of experience in the commercial real estate industry and can provide valuable guidance and support. Contact us today to learn more about how we can assist you in your commercial real estate investment journey.
Investing in commercial real estate can be a lucrative opportunity for new investors in Milwaukee. By following these ten things to do and not to do, you can make informed decisions and avoid costly mistakes. Working with a professional team, such as the team at Northwoods Property Resources, can provide additional support and guidance throughout the process. Contact us today to learn more about how we can assist you in your commercial real estate investment journey. (920) 851-9727