If your business is expanding, if it wants to take advantage of a better location or if you are just starting up a business, then buying a building can be a good option. However, don’t enter into this process blindly or you will be sorry. There are a lot of factors that you need to take into consideration, and a lot of prep work and planning to do before you start looking for a commercial building.
Instructions
1. Determine the type of building and the size of building your business needs. Size will probably be the first thing that you will need to calculate. See the Tips section below for advice on calculating the size you need. Next you will need to determine the type of building you need. There are outbuildings, office buildings and retail buildings. There are also warehouses and industrial buildings that you can buy.
2. Research the local market to get an idea about how much commercial real estate costs per square foot and to determine what is available. Work with a commercial real estate agent. They will cut down the amount of leg work you will have to do.
3. Pull together your preliminary capital for your building purchase. During this process you will talk with your financial office, if you have one, and determine how much money your business has on hand to buy a building. If you don’t have enough money to buy a building, then you will need to determine how much money your company can afford to borrow to finance a purchase. After figuring out how much you can borrow and how much money you have on hand, you will be able to approach lenders for preliminary loan approval.
4. Find a building that you want to buy. This will again involve the use of a commercial real estate agent. Select a building that will meet your space and use needs for at least the next five to 10 years, and is in an area that makes sense for your business. For example, if you operate a retail outlet you don’t want to buy a building that is difficult to get to or that has no available parking for your customers.
5. Put together your financing package. If you are borrowing money then you will need to work with your lender to complete the loan application process, secure financing and set up escrow for the property. During this step you will also need to acquire commercial building insurance in the amount determined by your lender.
6. Complete escrow and take possession of your new commercial building.
