Trusted Tips and Resources

Trusted Tips & Resources

Trusted Regina COMMERCIAL Real Estate Agent tip on buying a commercial building

 Tip on buying a commercial building:

 

 

Buying a commercial building for your business carries some obvious benefits: you'll be master of your own domain, you won't face rent increases and the property may well appreciate in value. As well, costs associated with the loan, including mortgage interest and depreciation in the building's value, may all be tax-deductible.

One downside of owning, though, involves the initial capital investment, which can substantially reduce your cash flow. Another is that you'll be responsible for fixing and improving the building for your business and for others located in it.

Due diligence
Let's assume the building you've found satisfies your must-have criteria as well as some items on your wish list: it will help you do more business, projects a suitable corporate image and does all of this economically. Still, before any transaction can be finalized, you'll have to perform some due diligence to minimize risk to your business and ensure the building is a sound investment.

Beyond the physical condition of the building, many intangibles have to be assessed. The building's history must be researched, with all liens and obligations examined to ensure there are no unpleasant surprises.

Building owners with commercial tenants are vulnerable to sudden economic downturns; a fully occupied building with a major tenant can become an under-occupied building if that tenant goes under. So the security of any income stream that depends on tenants must be carefully evaluated too. Payment histories and tenant credit files should be examined to determine how much risk is involved.

Insurance policies on older buildings may contain a list of claims that have been filed, highlighting defects and potential liabilities. It's well worth using the services of a lawyer or other professional advisor to help you make these assessments.

Take 30 days to perform due diligence
If possible, give yourself a period of thirty days after reaching an agreement with the seller before actually finalizing a deal. This will give you time to perform a detailed examination of all documents, including leases with current tenants, maintenance contracts, insurance policies and title documents, all of which should be provided by the seller.

Make that thirty-day period start when the final document in the series has been delivered to you. Your professional advisors should know which documents need to be obtained in your municipality.

If the seller is unable or unwilling to provide those documents, that increases the risk associated with the building and can provide you with an opportunity to renegotiate the price.

Assign tasks to your acquisition team
As you examine the documents, build a list of questions and issues to be checked. Are survey markers found where they’re supposed to be? Is there a satisfactory maintenance contract on the boiler? What kind of guarantee was issued on roof repairs? Make sure each item is assigned to either a staff member or an outside consultant such as a surveyor, building inspector, lawyer, environmental specialist, accountant or real estate agent . Make sure each has clear task-completion deadlines, and follow up with them frequently.

Financing your purchase
Your business plan and cash flow projections should provide the numbers that dictate what you can afford. Go over these figures with your accountant. Try to take into account all growth that could result from planned projects, as well as your future borrowing needs. Also keep in mind that a large real estate loan on your balance sheet could limit your future borrowing capacity since it will affect your firm's debt-to-equity ratio.

The next step is to prepare a brief synopsis of your financing needs Financial planning and assets for presentation to a lender. You will need to assess interest rates, repayment options and the personal guarantees required by your financial institution. It's advisable that your lawyer and, in Quebec, your notary be involved in any final agreements with a lender.

If possible, try to get a preapproved loan so that you know exactly how big your budget is before you begin your search for a building. And be realistic about those financial forecasts: unforeseen costs can eat up profit very quickly in the year following a purchase.

You'll need to check that you have met all of your lender's conditions prior to signing an offer of purchase. For example, some financial institutions require that an environmental assessment or building inspection be produced just for them. The inspection may reveal that major work needs to be done, the cost of which can sometimes be covered by your financing package. You can further protect your cash flow during this transition period by obtaining a complete quote for moving expenses and then including it in your application for long-term financing, since moving equipment and setting up electrical and other utility connections can be costly.

Ownership of a commercial building always carries risks, but if you follow the right steps when buying the property, you can reduce that risk, profit from multiple revenue streams and grow your business.

If you need advice or financing for your commercial property investment, BDC provides flexible terms for the financing of expansions, plant overhauls, acquisitions of existing businesses and purchase of fixed assets.

 

Trusted Regina Real Estate Agent shares a tip on Buying a Home: Needs vs Wants

Buying a Home: Needs vs Wants: 

House buying needs and wants

Similar to the list you develop to purchase groceries, why not develop your own list of needs and wants in a new home. This doesn’t mean you can not have what you want in your home, but rather, that you have a priority list of the most important features. You may not be able to obtain all the “want” items on your list, within your budget. You may have to compromise on a few items to stay in line with your budget.

Here’s a review of needs versus wants:

Needs

Adequate square footage for comfortable living.
Sufficient bedrooms for your family
Sufficient bathrooms
Comfortable eat-in kitchen
Garage or basement for storage needs
Backyard for children’s play area
Easy access to school

Wants

Specific carpeting, paint, exterior color
Pool
Jacuzzi
Hardwood floors
Bay windows
Built-in entertainment center
Brass lighting fixtures
Skylights
A pretty view

Try finding a happy medium of NEEDS and WANTS. That is, you will want to look for a home that includes all of your needs, with as many wants as practical, while remaining within your budget. Once you have this information in hand, your needs will be clearly defined from your wants. Having this knowledge will establish a clear direction for your new home shopping.

 

Trusted Regina Real Estate Agent -7 Steps To a Hot Commercial Real Estate Deal

 7 Steps To A Hot Commercial Real Estate Deal:

There's an old joke in commercial real estate: If you think nobody cares you're alive, just miss a few mortgage payments.

Unfortunately, there was a lot of that going on during the credit crisis that started in 2008, as commercial real estate values went into a freefall. According to the Massachusetts Institute of Technology Center for Real Estate, commercial property values fell by 10.6% in the fourth quarter of 2008, alone – the biggest price drop since 1984.

But to savvy real estate investors, times of lower prices typically reveal genuine investment opportunities. For instance, according to a survey by Marcus & Millichap Real Estate Investment Services, of 1,129 commercial property investors, 51% planned to increase commercial real estate allocations during the 2008 credit crisis.

So, despite the significant drop-off in acquisition plans from the peak in 2005, more than half of investors still planned to increase their commercial real estate holdings. A mere 11% planned to reduce their real estate portfolios in 2009.

Finding a Good Commercial Real Estate Deal
Ask any real estate professional about the benefits of investing in commercial property and you'll likely trigger a monologue on how such properties are a better deal than residential real estate. Commercial property owners love the additional cash flow, the beneficial economies of scale, the relatively open playing field, the abundant market for good, affordable property managers and the bigger payoff from commercial real estate.

But how do you evaluate the best properties. And what separates the great deals from the duds?

Like most real estate properties, success starts with a good blueprint. Here's one to help you evaluate a good commercial property deal.  

1. Learn What the Insiders Know

To be a player in commercial real estate, learn to think like a professional. For example, know that  commercial property is valued differently than residential property. Income on commercial real estate is directly related to its usable square footage. That's not the case with individual homes. You'll also see a bigger cash flow with commercial property. The math is simple: you'll earn more income on multifamily dwellings, for instance, than on a single-family home. Know also that commercial property  leases are longer than on single-family residences. That paves the way for greater cash flow. Lastly, if you're in a tighter credit environment, make sure to come knocking with cash in hand. Commercial property lenders like to see at least 30% down before they'll give a loan the green light. 

2. Map Out a Plan of Action

Setting parameters is a top priority in a commercial real estate deal. How much can you afford to pay? How much do you expect to make on the deal? Who are the key players? How many tenants are already on board and paying rent? How much rental space do you need to fill?

3. Learn to Recognize a Good Deal
The top real estate pros know a good deal when they see one. What's their secret? First, they have an exit strategy – the best deals are the ones where you know you can walk away from. It helps to have a sharp, landowner's eye – always be looking for damage that requires repairs, know how to assess risk and make sure to break out the calculator to ensure that the property meets your financial goals.

4. Get Familiar With Key Commercial Real Estate Metrics
The common key metrics to use for when assessing real estate include:

Net Operating Income (NOI)
The NOI of a commercial real estate property is calculated by valuating the property's first year gross operating income and then subtracting the operating expenses for the first year. You want to have positive NOI.

Cap Rate

A real estate property's "cap" – or capitalization – rate, is used to calculate the value of income producing properties. For example, an apartment complex of five units or more, commercial office buildings, and smaller strip malls are all good candidates for a cap rate determination. Cap rates are used to estimate the  net present value of future profits or cash flow; the process is also called capitalization of earnings.

Cash on Cash
Commercial real estate investors who rely on financing to purchase their properties often adhere to the cash-on-cash formula to compare first-year performance of competing properties. Cash-on-cash takes the fact that the investor in question doesn't require 100% cash to buy the property into account, but also accounts for the fact that the investor will not keep all of the NOI because he or she must use some of it to make mortgage payments. To uncover cash on cash, real estate investors must determine the amount required to invest to purchase the property, or their initial investment.

Look for Motivated Sellers

Like any business, customers drive real estate. Your job is to find them - specifically those who are ready and eager to sell below market value.  The fact is that nothing happens - or even matters - in real estate until you find a deal, which is usually accompanied by a motivated seller. This is someone with a pressing reason to sell below market value. If your seller isn't motivated, he or she won't be as willing to negotiate.

Discover the Fine Art of Neighborhood "Farming"
A great way to evaluate a commercial property is to study the neighborhood it's located in by going to open houses, talking to other neighborhood owners, and looking for vacancies.

Use a "Three-Pronged" Approach to Evaluate Properties
Be adaptable when searching for great deals. Use the internet, read the classified ads and hire bird dogs to find you the best properties. Real estate bird dogs can help you find valuable investment leads in exchange for a referral fee.

The Bottom Line
By and large, finding and evaluating commercial properties is not just about farming neighborhoods, getting a great price, or sending out smoke signals to bring sellers to you. At the heart of taking action is basic human communication. It's about building relationships and rapport with property owners so they feel comfortable talking about the good deals - and doing business with you.
 

 

 

Robert MacKay Trusted Regina Real Estate Lawyer expert tip on choosing a Regina real estate lawyer

It’s an exciting time – the old house is sold, the new one is ready, and all that’s left is the move…..oh wait – not quite yet! There’s all that legal “stuff” to deal with now….signatures….titles to be given…and pages and pages of documents that need to be signed before the key is in your hand!!! And to top it all off – who really knows a good real estate lawyer?

MacKay & McLean provides the professional services of a large Regina law firm, with the intimate attention of a small firm. The legal process can be daunting and overwhelming, but it doesn't have to be. MacKay & McLean is with you every step of the way.

MacKay &  McLean are TRUSTED REGINA LAWYERS

Here Robert shares a tip on hiring the right Regina Real Estate Lawyer  

 

Not taking real estate transactions seriously isn't a wise decision - time and money can be easily wasted if real estate matters are not entrusted to someone who has the skills, knowledge, and experience to handle them.Many complaints against lawyers are due to different real estate related issues, thus, practicing in this area of law requires more guts and dedication. This is the age of specialization and efficiency.


When searching for or choosing from Regina law firms, you want to get the best service at a competitive cost. Therefore, hire:

A specialist, someone who is a member in good standing with the Law Society and the Real Estate Association.

Someone who has assistants who are concentrating 100% on residential real estate – which will enhance their ability to answer your questions, address any possible issues and get the job done, particularly if special problems arise when processing the real estate transaction through to its ultimate conclusion (e.g., getting a key for the purchaser and closing funds for the vendor on closing day).

A firm that generates competitive quotes and prices, one who will prove that every dollar spent is worthwhile. Furthermore, a firm that makes paying easier and hassle-free.

Someone who makes themselves available as much as possible - ready to show up on lunch and after-hour appointments, and allows out-of-office and off-location signings.

A lawyer and a team that uses the Land Titles Online Submission System which reduces delays and errors.

A lawyer that will do more than just tell you where to sign your name: someone who is willing to explain a transaction’s process and progress, and professionally answer all of your questions.

Once you have committed to either buying or selling your property, simply tell your realtor and lender, as applicable, that Robert MacKay will be representing you and to forward the appropriate instructions to MacKay & McLean, attention "Robert MacKay".

 

Robert MacKay is your Trusted Regina Real Estate Lawyer  

 

Trusted Regina Real Estate Agent shares advice on Understanding Current Regina Market Conditions

advice on Understanding Current Regina Market Conditions:

Numerous factors affect the real estate market. There may be more buyers than sellers. There could be more sellers than buyers. Interest rates, employment statistics and pricing. The supply of resale and new homes are also considerations when selling a home. Generally speaking, there are three types of markets that affect the sale of your home. Understanding each of these can make a difference to your bottom line.

Buyers' Market

Description: There is an abundance of homes on the market. Supply exceeds demand.
Characteristics: Many homes available for sale. Fewer buyers than homes. Homes remain on the market longer. Stable prices. Prices may also drop.
Impact: Less panic in buying. Buyers shop longer for homes. Upon negotiation, they often have more leverage.

Sellers' Market

Description: There are more buyers than homes available.
Characteristics: Few homes on the market. Many buyers. Homes are sold quickly. Prices often rise.
Impact: Home prices are higher. Homes prices often rise. Buyers purchase quickly, and tend not to shop as much. Multiple offers are common. Sellers may prefer offers with no-conditions.

Balanced Market

Description: There are roughly the same amount of buyers, sellers and number of homes on the market. Supply equals demand.
Characteristics: Demand equals supply. Sellers accept reasonable offers. Homes sell within a reasonable time period. Prices generally remain stable.
Implications: There is less tension among buyers and sellers. There is a reasonable number of homes to choose from.

 

 

Previous Posts

ADDRESS

S & E Trusted Online Directories Inc
TrustedRegina.com
310 Wall St #209
Saskatoon, SK   S7K 1N7
Ph: 306.244.4150

GET THE APP

App Store Google Play
Follow us on Facebook Instagram Linked In Twitter YouTube RSS Feed
Abex
Abex
Stevies
Sabex
NEYA
Website hosting by Insight Hosting