When purchasing any investment property in Mobile, AL you need to ask lots of questions. This is the initial step to purchasing any commercial real estate in Mobile, AL.

Here is some questions you might ask.

• What kind of property are you looking for?
• Are you looking to use the building for your own business, rent it out, build equity, and/or something else entirely?
• What kind of location do you need?
• Do you need to buy or could you lease the property?
• What’s your situation regarding cash, financing, and/or ability to make a down payment?
• Would you be willing to partner with someone else on the property?
• Would you be willing to partner with someone else on the property?
• How much time can you commit to the property?
• How much work are you willing to put into the property?
• What skills/knowledge are you bringing to the table?
• What skills/knowledge will you need to hire experts for or contract out?
• What kind of property manager might you need (or not)?
• Are you willing to do the duties of being a landlord?

Another important step to owning investment property in Mobile, AL is to know the real estate language.

Here is some of the common terminology:

• Loan-To-Value (LTV): A ratio of how much money you’re asking from a lender vs. the total value of what you want to purchase.
• Debt Service Coverage Ratio (DSC): Operating income over total debt service. Basically how much of the debt you’ll be able to cover each year with income.
• Capitalization Rate (Cap Rate): Income of the property divided by the total value of the property.
• Cash on Cash: Annual income over how much you actually invested. The amount invested could be just the amount your down payment was.
• Vacancy Rate: Percentage of properties that are vacant in a time period in a given area.

When dealing in investment property, let the experts of Merrill P Thomas Company be on your side.

Buying commercial real estate is often a complex process. You’ll likely need to hire experts to help with some of the steps. Which and how many experts depends largely on the type of property you’re purchasing.

At the very least, you’ll need to hire an accountant, commercial real estate lawyer, commercial realtor, and a mortgage broker.

If the property is more complicated, you could need other specialists like tax experts, accountants, lawyers, notaries, appraisers, engineers, and/or environmental specialists.

There are some things you can do on your own (through research) but there’s many that are better to hire an expert for.

For more information, contact us at 251-476-0808