How To Flip a Commercial Building

Flipping is a term which means purchasing a revenue-generating asset, usually a property, making the necessary improvements and reselling that asset to earn money. Flipping is one of the easiest and quickest ways to earn money. Although this term is usually applied to houses, flipping can also be done to other types of properties, like commercial buildings.

The process of flipping commercial buildings may differ from flipping a residential house. There are other concerns when it comes to commercial buildings. The following tips will help you learn how to flip a commercial building the right way.

1.      Learn the basics of flipping commercial buildings. Understand that flipping a commercial building has different concerns compared to residential houses. Since you are selling a business property, make sure you understand how things work in that particular business. If you're new to flipping commercial buildings, try to find someone who has flipped this type of property before. Ask for advice or try considering making him your partner.

2.      Find a property with a great discount. Like flipping residential houses, the best way to attain a higher profit, is to find a place with a bigger discount. The lesser the amount you'll spend on the property, the better deal you will get. Try to find a property that hasn't been upgraded for a long time. This kind of property will cost less as compared to a well-maintained and upgraded building. Also, make sure you do your research on the seller, location and the property itself. By doing this, you can easily get a better deal.

3.      Examine the building. It is important that you get all the necessary information about the property from the buyer before you purchase it. Consider the location of the building, what type of business the property was made for, its physical appearance, staffing and operations. These things will be your deciding factors before you purchase a property. Make sure that the money you will spend on the property, maintenance and improvement will be lesser than your potential profit.

4.      Make the necessary improvements. After you inspect the building and decide it is a good investment, the next thing to do is to determine the necessary changes to make the property look better. The first thing you should keep in mind when doing this is to make improvements only if necessary. Don't fix or replace something that isn't broken. Go for simple changes like landscaping the building, painting the paths, replacing flooring, painting the interior or expanding the parking lot. These changes will make the property more profitable.

Also, if you can find a way to reduce the cost of maintenance, do so. This is one advantage of flipping commercial properties. Unlike residential properties, there are some ways you can decrease the maintenance cost while improving the appearance of the property.

5.      Resell the property. Before you find a buyer, understand that the basis for pricing a commercial property is different from the factors that affect the price of a flipped residential house. Commercial buildings are priced according to the cash flow it generates.

These are the steps on how to flip a commercial building. The great thing about flipping a commercial building is you can manipulate the cost of improving the property. This is a great way to increase your income. Remember that your net income is your initial profit minus the money you spent. By reducing the cost of maintenance and improvement, you can easily increase your net income.


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