The first step I take with my clients is to sit down and go over your goals. Doing this gives me the opportunity to understand what you are trying to achieve and how real estate can fit into your plans. Here are some of the basic questions we go over at an initial consultation.

 

1. What is your use case?

That is, what are you going to use this property for? Is it an investment? Do you plan to owner-occupy the property? Maybe both? Knowing this right off the bat helps me determine what factors are going to be most important to you and your business. For example, an investor is going to be very focused on the ROI of an asset. Whereas, an owner occupant, will be much more focused on your business’s wants and needs.

 

2. Location, Location, Location

I know, this is the biggest cliche in real estate, but it is the single most important factor to consider when purchasing an asset. There are so many aspects to this, it is hard to provide a comprehensive list of all the angles we have to examine in terms of location. Additionally, buying commercial real estate in Duluth and Superior is vastly different from other areas like the Twin Cities or other cities. Here are some examples of what we need to consider:

 

1. What state/city do you want to be in?

2. Are the traffic counts important to you?

3. What impact does demographic data have on your business?

4. How will zoning laws affect your search?

5. What are the market trends for the area?

3. Do you plan to finance the purchase?

This is incredibly important to know early on in the transaction. If you do plan to finance your purchase, we will need to ensure the asset can be underwritten. For investment properties this includes looking at the debt service coverage ratio (DSCR), cap rate, lease terms, and quality of the tenants.  For owner occupants, we will need to work closely with your lender to ensure we meet any requirements their underwriters have.   Overall, buying a commercial property is a very involved process. Most importantly, remember that searching for commercial real estate in Duluth/Superior is an active process, not a passive one. Therefore, I highly recommend working with a professional who is intimately familiar with commercial real estate and the local market.    If you are considering buying commercial real estate in the Twin Ports, give me a call. I would be happy to help you and provide some advice. Contact me.