How To Get Into Commercial Real Estate in Colorado
If this is your first time buying commercial property in Colorado, you must consider some things before proceeding. Purchasing commercial real estate isn’t the same as buying a residential property.
Rushing into the sale without knowing the basics, like do you need a commercial real estate loan to fund your purchase, can get you into trouble.
While you are still in the consideration stage, we share some essential aspects you need to know when buying commercial property.
What is commercial real estate?
Commercial property is used for business purposes and may include five or more units. On the other hand, residential properties are single-family homes or homes with up to four units.
There are five main categories of commercial real estate:
Multifamily homes are residential properties with more than 1 unit, including duplexes.
Office space is either low, mid, or high-rise properties used as offices. They can be a single office down the street or in a high-rise building.
Retail properties are used to sell goods or services to consumers. You can find them in malls and shopping centers.
Industrial properties are used in heavy manufacturing or light assembly. These include warehouses, distribution centers, and storage facilities.
Hospitality properties include hotels, motels, and short-term rentals.
How to buy commercial real estate?
Commercial property is more expensive than residential homes, making it harder for borrowers to secure funding.
Working with Castle Rock Mortgage, your trusted and experienced Colorado commercial mortgage broker, early on is a good idea. You can get the best deals plus assistance during the buying process.
Determine your purpose in buying commercial real estate.
You should check zoning laws if you are buying commercial property for personal use and conducting business operations. Knowing limitations and guidelines is better when purchasing commercial property in your preferred location.
For example, if you are buying space to turn into a restaurant, you should find out if the property meets the specific zoning requirements for restaurants. If you ignore zoning requirements, you may get more headaches as you go along.
For borrowers buying commercial property as an investment, there are perks you can enjoy over residential property investments. Bank of America has data showing commercial property returns between 6 to 12% yearly compared to single-family residential units, which get you between 1 to 4% annually.
Make your offer
Once you’ve secured funding and know your purpose in buying your commercial property, you are ready to make your offer.
You can ask a lawyer to draft a Letter of Intent and Purchase and Sale agreement.
Are you ready to buy your first commercial property in Colorado?
Buying commercial property isn’t as simple as buying residential homes. You need to know your purpose, secure financing, and work with professionals who can help you realize your goals.
At Castle Rock Mortgage, you are working with loan experts who have helped numerous clients purchase the commercial property they desire in Colorado.
Give us a call or message us today to help you get started.
* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.