How To Invest in the Hottest Markets in Texas for Commercial Real Estate

Apr 23, 2021 | Blog | 0 comments

Do you want to buy or sell retail, office, industrial, warehouse, any commercial property in Texas? Now is the time!

If you are buying a commercial property, it is essential to keep a few things in mind before investing in commercial property. It is crucial to take responsibility for a few things and do your due diligence with best practices.

For investors with a long-term investment strategy in real estate, markets with stable growth rates in the long term may offer better opportunities than overgrowing in the short term. 

Real estate investing in Texas is a profitable deal. Texas is a tax-free state, and Texas promotes a business-friendly environment. Also, Texas is the second most crucial state for trading in the United States.

This guide will help you through how to buy commercial real estate in Texas and help you get started today.

Types of Commercial Property

Commercial property is a real estate property that is used for commercial or business use. Commercial property is used for the primary purpose of generating profit.

Commercial property involves malls, grocery stores, office buildings, manufacturing shops, restaurants, shopping complexes, and much more. 

There are five main categories of commercial property that you can invest in: 

Office Spaces Commercial property – These are used by companies, small businesses, and corporations for running day-to-day operations. 

Industrial Commercial property – Industrial spaces can be either factory, plants, or warehouses.

Retail Commercial property – Retail property such as single tenant (Starbucks, McDonald’s, Walgreens), shopping centers, or stores are used for selling products and services. 

Hospitality Commercial property – Hospitality commercial real estate includes hotels, motels, etc. 

Multifamily properties – Multifamily commercial real estate buildings are residential properties that include five or more dwelling units such as apartment buildings and complexes.

Each commercial property is most likely to be categorized in a zone according to its purpose. You should pay attention to zoning as the zoning will determine what kind of activities you can do with the property if you buy it, Be Mindful of it. Make sure the zoning laws fit with your strategy.

Commercial Property Vs. Residential Property

Buying commercial property is known as a profitable investment as, in turn, the returns on commercial properties are also significantly higher. Investment costs of commercial property are usually higher than residential properties. If you are planning to buy commercial real estate property, it is essential to understand that buying a commercial property is not the same as buying a residential property or home.

Why Choose Texas to Buy a Commercial Property?

  • Texas accounts for 10% of total production in the US, which was $226 billion in 2017.
  • Texas produces about 40% of America’s oil and 24% of the nation’s natural gas.
  • The most extensive transportation network in the US is in Texas, with over 16 seaports, 313,000 miles of public highways, and 380 airports.
  • Texas has nearly 1 million women-owned businesses and ranks third for women-owned establishments in the US, with an approximately 150% growth rate over the past 20 years.
  • With $1.7 trillion, Texas has the 10th largest GDP on earth, ahead of Canada and just behind Brazil.

Top 4 Hottest Markets for Texas Commercial Real Estate in 2021

  • Austin
  • Dallas/Fort Worth
  • San Antonio
  • Houston

Large and growing populations, cities endowed with diverse economies, world-renowned higher education, and research facilities help Texas create real estate and investment demand.

The three largest cities in Texas are – Dallas-Fort Worth, Houston, and San Antonio. 

It will help to know the pros and cons of this type of investment before buying a commercial property. It’s also essential to understand that there is often a higher purchase price and greater risk, with more reward opportunities. 

How to Buy a Commercial Property In Texas?

1. Assess your investment options

If you’re going to invest in commercial real estate property, it helps to understand different commercial properties. For example, commercial properties may include:

  • Malls
  • Warehouses
  • Retail buildings
  • Industrial buildings
  • Apartment buildings
  • Office buildings
  • Storage units
  • Hotels/Resorts 

Depending on which commercial property you want to buy, it is essential to understand the different building classifications and what they mean to you as an investor. Understanding the differences in commercial real estate classification can help you better understand the level of risk with potential investments.

2. Secure financing

Before you find a commercial property in Texas, it is wise to complete your financing options in advance. One step to acquire commercial real estate financing (as well as other types of business financing) is to check your credit.

Your business credit score and report may run depending on your lender and the type of loan you have applied. Some lenders may also check your personal loan.

You should review your credit and ensure that the information contained in your report is accurate. 

Once you find that your credit information is correct, now take an honest look at the type of qualification you are qualifying for. Depending on your credit, property type, and other factors, you can consider one of the following financing options:

  • Seller Financing
  • Conventional Commercial Real Estate Loans
  • Friends and Family
  • Apartment Loans
  • Hard Money Loans

When purchasing the best possible financing option, be sure to compare interest rates, fees, repayment terms, and other factors.

3. Partner with the right team

Buying commercial real estate property in Texas involves a lot of moving parts. In other words, it can be complicated. Even experienced investors know that it is essential to surround yourself with the right team of experts to ensure that investments have the best chance of success.

Consider hiring a commercial real estate agent in Texas that specializes in the types of all type of commercial properties. The right partners can help you to land your dreams.

Here are some of the experts who need to run your commercial real estate deal as smoothly as possible:

  1. Commercial real estate broker
  2. CPA – Accountant
  3. Commercial Real Estate Attorney
  4. Civil Engineer
  5. Architect  

Before you start shopping for potential properties, it would be wise to have your in-hand team. If you get the right help, you will know immediately when questions or problems will occur. Gathering a team of professionals may not be cheap, but it can save you from costly mistakes in the long run.

4. Find the Right Property for Your Needs

Before starting your search for commercial property, know your criteria & needs; understand why you are investing in commercial real estate. Find a property that can get you the desired outcome.

5. Do your Due Diligence

Before you proceed with a deal for a commercial real estate property, do due diligence. Think about your options, calculate the numbers and analyze. Is it a good deal for you? What can be the inherent risks and the potential rewards? Is there any other property that would be better for your needs? 

Buying commercial property can be a risky deal for those who act irrationally in a hurry. You can take the help of a successful commercial real estate broker agent in Texas; with proven systems on your side, you are more likely to avoid the traps of commercial investing and realize success.

6. Understand your Motivations for Investing in Commercial Real Estate Property

What is your motivation behind investing in commercial real estate? It is an essential question to ask yourself before you start hunting for real estate properties.

Do you want an office building or apartment that you can rent to multiple tenants to reduce the risk of non-payment? Are you looking for a property that you can use at least in part for your own business?

Maybe you’re like a larger property that can appreciate and increase your capital over time. You may be able to take advantage of tax breaks or assess your investment portfolio.

Whatever your motivation is, it’s helpful to identify the “why” before you invest. Knowing why you want to buy commercial real estate can help you find the right investment opportunities.

7. Make an Offer & Close the Deal

When you find the property you want to buy, the time has come to make an offer. Your commercial real estate broker in Texas will write your purchase offer, but it would be best to have a lawyer review it thoroughly before signing and filing. When you come under contract, be prepared to ask for earnest money from the seller.

During the due diligence period, your lender may require a survey. Always ask the Seller’s agent upfront for an existing survey. The survey can provide valuable information about the property, including boundaries and locations of development, utilities, and easements. 

If the complete survey proceeds well and further screenings, you can proceed towards closing. Your commercial real estate realtor in Texas and the attorney should be able to guide you through many complex steps in the process. Once again, it is necessary to establish a reliable team of experts before you are adjacent to the closing table.

Are you looking for Buying or Selling Commercial Real Estate Properties in Texas?

  • Need a development partner? We can find the right tenants and manage the entire development process –land acquisition, entitlements, zoning, and leasing.
  • Need a Texas broker? We will find the right properties to lease or buy for you – guarantee to find hidden opportunities and off-market sites. Or if you are an out-of-state broker and need a Texas broker to represent you.
  • Need funding for your build-to-suit development? We have several capital investors ready to place their money.
  • Need to place your money outside the stock market and want mailbox money? Have you considered buying a NNN Investment Single Tenant Commercial Retail Real Estate Property – McDonald’s, Starbucks, Dollar General, etc.
  • Need a contact person for a retailer or restaurant, or City? After 30 years in the business, we can help you make the connection to the right person.

To brainstorm opportunities, call Pam Goodwin at 214-929-9013 or schedule an appointment at pam@pamgoodwin.com.

Contact us Goodwin Commercial, one of the best commercial real estate companies in Texas, where Pam Goodwin can help with the best real estate strategies for investing in the real estate market. Pam is one of the topmost recognized experts on commercial real estate with more than 30+ years of experience in the following: Retail and Restaurants – single tenant net leased pad sites, tenant representation, NNN investments, ground-up development, 1031 exchanges, SBA loans, entitlement services, and available for mentoring, consulting, and classes both via Zoom or in-person and as a speaker to your group or corporation.

Pam is an expert at helping investors buy/sell the property and build wealth. She is known for her confidence, knowledge, determination, resourcefulness, finding hidden opportunities, and Rolodex of connections.

You May Also Like
Influencers in Retail

Influencers in Retail

On the following pages you will find our picks of the leading influencers in the retail space....

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *