Commercial real estate investing can be a lot more lucrative than residential real estate investing.  But with higher payoff, comes higher risk.  Don’t be scared off from taking the plunge into commercial real estate investing.  There are some basic theories and some specific advice when it comes to this type of investing to help minimize your risk.


Because commercial real estate investing can be costlier than residential, you may want to consider forging a business partnership.  Before doing so, make sure you’ve got all the details of the partnership in writing.  Have an attorney draft an operating agreement covering all aspects of your partnership.  This way, if things go down hill, the financial logistics will already be spelled out.


Don’t cut corners on your professional help.  You have to accept that paying for professional advisement is part of the cost of doing business.  This is one of those cases where you often get what you pay for.  Hiring competent attorneys, accountant, mortgage brokers, etc. will be key to your success.  Yes, you’ll pay more for quality professionals, but the money and headaches they will save you down the line will be worth it.


Those are two very critical ways in which you can minimize your risk before jumping into commercial real estate investing.  Next time, we’ll discuss specific ways to minimize your risk once you’ve taken the plunge.

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