Steven Taylor on What to Look for in Los Angeles Commercial Real Estate

If you’re an investor interested in joining the game of commercial real estate, Los Angeles is a popular market. Commercial property can be a lucrative asset, but all real estate investments are inherently risky. Like in any other city, it is essential that you put your capital into the right building. By properly researching Los Angeles properties and looking out for red flags, you can make sure you are picking up a property with a good chance of success.

But what do you look for in Los Angeles commercial real estate? In this article, Steven Taylor, of Los Angeles, shares his expertise on what signs to look for on your journey to invest.

What do investors look for in Los Angeles neighborhoods?

In Los Angeles, it’s often a very fine line between a downtrodden area that is about to skyrocket, and a neighborhood that is going downhill. Buying in a low value area can be a fantastic opportunity to get in on the ground floor before a neighborhood becomes popular, but it only works if things go your way. When looking at buying commercial real estate in Los Angeles, you want to look not just at the specific neighborhood, but the growth of the entire surrounding area. Where is the movement coming from? Get specific. You can never do too much research. Los Angeles native Steven Taylor, an experienced commercial real estate investor, says to look closely at job growth in an area. If local businesses are expanding and hiring, the market could be on the rise.

On the other hand, you should be looking out for red flags that a neighborhood is heading downhill. Watch for businesses shutting down, influxes of renters moving out, and declining traffic. Don’t be afraid to ask — talking with local business owners directly can be a great way to get clear insights about a neighborhood.

How does a commercial real estate investor assess property condition?

When investing in Los Angeles commercial real estate, one of the most important purchasing factors is the property condition. While it can be profitable to buy a property as a fixer-upper, if the building needs extensive repairs to function successfully, you have a lot to consider. There are a lot of old buildings in LA — some just need repairs for cosmetic appearances, but some need a complete overhaul to be usable. If you aren’t careful, you may get stuck in a situation dealing with repairs that cost you more than they’re worth. If you’re looking for a property you can improve without ending up with a money pit, here are a few signs Los Angeles native Steven Taylor looks out for:

Los Angeles Commercial Real Estate checklist:

1. High ceilings: It is common for renters of commercial properties to require high ceilings to operate correctly. While low ceilings can be raised, it can be unpredictable how construction will go until you get started, and there can be a lot of unexpected costs. Make sure ceilings are in good condition, and that the ceiling height fits the needs of renters before investing.
2. Good roof: One of the most common and expensive repairs for a commercial building is updating the roof. If a commercial building needs a new roof, it is going to cost significantly more than it would at a residential real estate property. When looking for properties in Los Angeles, focus on buildings with strong roofs with minimal leaks or damage.
3. Strong walls and floors: Steven Taylor always walks through a commercial property looking for small signs of bigger damage and issues. Look thoroughly for any small cracks or other signs of settling in the floor or walls. If there is anything unusual, have it looked into immediately. A good commercial real estate property has a solid foundation that won’t settle.
4. No environmental damage: In Los Angeles, there are a lot of commercial properties in industrial areas. If you are purchasing a building in one of these areas, you want to look out for clean buildings that don’t have any sort of contamination. Environmental contamination can turn into another money pit, so be on watch for any chemicals or other contaminants that could affect the working or renting conditions of the building.

Originally published at http://steventaylorlandlord.wordpress.com on February 11, 2021.