The Business Of Commercial Real Estate Investment In South America

Commercial real estate is that market where properties are purchased and sold for commercial purposes

. These include shops, malls, office spaces and other properties where business and financial transactions are done. This is big business especially in South America, as there are many companies that allow investors into their plan where the investment would reap dividends in the long run.

In this kind of market in South America, the purchaser does not purchase actual title over property, but places an investment into the company and the company would then use the funds to build, purchase and then offer for lease or sale properties with the commercial market as a targeted purchaser. This is very similar to stock investments, where you purchase an interest in the company. On the other hand, you yourself can purchase the property for commercial purposes and lease out the space to prospective users and vendors. So in order to prevent being scammed by unscrupulous individuals, here are some tips for investing in commercial real estate.

a) Learn the Market. Entering into this kind of commercial investment involves a lot of finances and knowledge. One would need to learn about the demand in the market, current pricing, repair costs and other information essential to make your investment earn in the long run. This also includes doing a lot of research, spending money and waiting for the right indicators to make your investment or pull it out. Thus, you need to learn a lot before you make your investment earn in this niche market;

b) Make Partnerships. In this business, being a cornered market, is quite small and thus the people you would meet would prove to be your greatest asset when sinking your investments. Thus when making the purchase yourself, you would need to find partners to make your commercial investment flourish and eventually be a money earner. As an investor, finding partners to make that same investment would also help your investment grow and flourish in the long run;

c) Finding Financing. As it is still a recession-scarred market, finding funds is very difficult. In order to insure investors as well as lenders as to the viability of your investment, you need to make your research as well as the established partnerships your asset to be given the funds and the resources necessary to make your investment into a reality. For the stock investor, your funds still needs to be contingent, as you may not have ready cash available, on debts or other loan documentation in order to be amply protected if ever the plan goes belly up.

d) Do Due Diligence. Doing due diligence is imperative in this kind of commercial investment. If you are an investor, you need to spend time researching on the company, the proposed investment and the portfolio of earnings your investment is promised to make. If you are the purchaser, you need to do engineering, financial, marketing and commercial research in order for your investment to be fully determined as viable or just a paper tiger.

As can be seen, commercial investment is very different from purchasing real property as a home. A whole lot of factors need to be considered before, during and after the investment has been made. In following the tips above, you may have an advantage in the protection of your investment in South America so in the long run you would be laughing all the way to the bank.

by: Bobby Castro

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