things to consider
# commercial investment success lies in thorough contingency plans
7. Actual Condition of the Property
Along with an expert commercial agent, before investing in a commercial property, building or land you should always conduct a detailed contingency plan of the property’s location and its corresponding current or future infrastructure state. For example, is the property ready for rent, usage and business operations? If no, what’s the time and the capital it is needed to become fully active? What’s its wear and tear from its latest usage? In the current condition of the commercial property lies what we call the hidden cost, so it’s crucial that you know and can accurately assess that with a prolific commercial real estate agent.
8. Earnest Money
After examining all these factors and if everything rolls smoothly, you will be asked for a down-payment to close the deal, as a good faith sign that you are serious about actually buying the property. The percentage of the down-payment is typically between 1% and 3% of the actual sale price and most times it is held as an escrow if the buyer backs out. Under the normal course of things it will be subtracted upon the final full payment. Another thing to check is the time-duration of the down-payment, because in most cases there is a limited time clause for the completion of the full deal between the two parts, otherwise the down-payment cannot be returned to the potential buyer.