Do you think the time is right for you to consider investing in Ventura County commercial real estate? Whether you are an experienced retail investor or a first-timer, specific topics are critical to planning your investment opportunity. Success and recurring revenue are the ultimate results. Your success goals and how much recurring revenue you need are yours to determine. Are you planning to flip the investment for a quick return, better your community, or realize long-term gains from rent revenues?
People get into commercial real estate investments for a variety of reasons. Usually, it is to diversify a person's investment portfolio to limit exposure to just one source of investment. There are, of course, exceptions to every rule. An investor may be hoping to impact a specific community by investing in a downtown commercial space or family house unit. Moving a community as a whole can be a rewarding effort without a significant influx of recurring revenue. Others may just want the challenge of something different and jump into a commercial investment to realize that challenge. Knowing the facts, understanding the people in the investment community, and accepting gains and defeats are all part of commercial property investment.
What type of commercial space is best for you?
Now that you have decided to invest in commercial property for sale in Ventura, the next question is which type of property meets your vision. Is your goal to provide housing for a wide range of people, hold retail space to boost the economy, make an industrial investment in the community, or create something brand new out of nothing? It is wise not to react to a building that looks like it has potential because of location or the price. There may very well be terrific opportunities in that space, but setting a goal for how you want to invest should be done before evaluating properties. Remember, this is a business endeavor you are embarking on, and good planning will help you to be successful. After analyzing the potential types of commercial spaces available, work with an agent to help you find the perfect investment that meets the defined goals you have outlined.
Supply and demand
The sale of goods and services is driven by supply and demand. You may have developed the coolest gadget, but there is no value if no one wants it. The same principles hold for commercial real estate investments. Knowing the market is critical to your success. Is the area you wish to invest in high demand? Are businesses moving to the neighborhood? What is the population of the city/town? How are rent prices moving? Complete a deep analysis of the investment region. Knowing the immediate area and a radius that includes neighboring cities would be most prudent. Something could be happening in a next-door town that could cause real estate to increase or decrease in the area you have selected. If you have decided to invest in commercial property for sale in Ventura, know what is happening in nearby Los Angeles or Santa Barbara as well as Ventura County commercial real estate.
Research… and research again!
We have all heard the phrase “you need a little R and R.” In this case, you need R and R but not in the rest and relaxation department — although that may be a necessity after you start investing! Research and more research will help define your goal(s) further and to develop a plan that proves successful.
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Research the commercial investment’s performance history
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Research zoning laws
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Research market supply and demand
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Research financing options
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Research potential tenants
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Research operating history
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Research leasing requirements
Investing in commercial property in Ventura is an incredible way to experience the growth of your capital investment if appropriately planned. Investing in commercial real estate is precisely that, investing. We want to make smart decisions with our investments to provide for our families in the future. Research will allow you to make the decisions necessary to be successful.
Making the purchase
Once you have determined the area in which you want to invest, the type of Ventura county commercial real estate you wish to purchase, and have a solid plan in place, it is time to make the purchase. If you are financing the purchase, you will need to understand commercial banking rules. Banks tightened up the requirements of loan recipients after the housing crash in the mid-2000s, so if you are a new investor, finding the right lender will be a critical step in your success. The details of any loan will need to be factored into your five, ten, and 20 year plans with the commercial space. The bank may have caps on the total amount to borrow, length in business requirements, and proof of income requirements. Have all your documents in order before heading to the bank to secure the loan. If you are paying cash for the property with the intent of flipping it or selling later, do not forget capital gains tax, as that can significantly impact your investment revenue.
Operating the space
You did the research, you bought the space, now what? The answer to this question lies with the first step — your goal. Did you purchase a space to flip for an immediate return on your investment? Are you hoping for a boost to the economy of your local community? Are you looking for long-term rent revenues? Depending on your answer, you may have different tasks ahead of you. Maintaining lease agreements and the grade of tenants are important if looking for those longer-term gains.
If you are looking for a quick flip and sale of the property, be aware that delays will happen, especially with the supply chain issues we face today. You will need money set aside to operate the space for all investment types. Unexpected things will come up, and it is a best practice to set aside 5% of your annual operating budget for the unknowns.
As with any business, crafting a business plan is crucial to your success. If you are unsure how to accomplish this, many business consultants and investors would be happy to help guide you. Ventura County commercial real estate could be an excellent investment for your future — just make sure to do your research! If you're ready to get started, reach out to the Cohen DeBuiser Team for expert assistance in finding the right property.
