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Buying Commercial Property: A Step-by-Step Guide

  • Writer: Garrett Leonard
    Garrett Leonard
  • Dec 1
  • 4 min read

A Practical Roadmap for Investors, Business Owners & First-Time CRE Buyers

Presented by Creative Investment Advisors


Buying commercial real estate (CRE) can be one of the most rewarding investments you make—whether you're a business owner seeking an owner-occupied building, an investor acquiring income-producing assets, or a developer purchasing land for future projects.


But commercial property transactions are more complex than residential deals. They require deeper financial analysis, professional guidance, and careful due diligence. This guide walks you through the entire step-by-step process, helping you purchase with confidence.

Why Commercial Property?

Commercial real estate offers powerful benefits:

  • Rental income and cash flow

  • Long-term appreciation

  • Tax advantages (depreciation, 1031 exchange, interest deductions)

  • Control over your business location

  • Stability during economic shifts

  • Ability to increase value through improvements or better management

But the path to purchase requires preparation, analysis, and the right team behind you.

Creative Investment Advisors helps buyers at every stage—from property search to underwriting and closing.

Step 1 — Define Your Investment Goals

Before searching for deals, determine exactly what you’re looking for.

Ask Yourself:

✔ Are you buying for your business or as an investment?

  • Owner-occupied property (office, retail, warehouse, flex, etc.)

  • Investment property (retail strip centers, small multifamily, land, etc.)

✔ What is your ideal property type?

  • Multifamily (2–50 units)

  • Industrial or flex space

  • Retail or office

  • Mixed-use

  • Development land

  • Special-use (restaurants, churches, daycare, etc.)

✔ What is your budget?

This includes:

  • Purchase price

  • Down payment

  • Closing costs

  • Renovations or buildout

  • Operating reserves

CIA can help you build your investment criteria and create a buying strategy that aligns with your objectives.

Step 2 — Build Your Commercial Real Estate Team

Commercial acquisitions require expert support. Your team should include:

  • Commercial Real Estate Broker (CIA)

  • Commercial Lender (Bank, SBA, Private Lender)

  • Real Estate Attorney

  • CPA or Financial Advisor

  • Contractor/Inspector

  • Environmental Engineer (if necessary)

  • Surveyor or Civil Engineer (for land)

Your CIA advisor coordinates and manages this team throughout the process.

Step 3 — Get Prequalified for Financing

Knowing what you qualify for helps narrow your property search.

Common Financing Options

✔ SBA 504 Loan (for owner-occupied up to 90%)

  • Low down payment (10–15%)

  • Great for buying or constructing buildings

  • Includes equipment and renovations

✔ SBA 7(a)

  • Flexible for mixed-use and business-heavy properties

  • Allows working capital and business acquisition financing

✔ Conventional Commercial Loans

  • Typically require 20–30% down

  • Best for strong credit and stabilized properties

✔ Private / Bridge Financing

  • Faster closings

  • Useful for properties needing renovation or repositioning

CIA connects buyers to financing options based on property type, credit, and cash flow.

Step 4 — Begin Your Property Search

Your broker will help you identify opportunities both on-market and off-market.

Factors to Consider:

  • Location & market growth

  • Traffic counts & visibility

  • Tenant mix and vacancy rates

  • Zoning and permitted uses

  • Future development plans

  • Nearby competitors

  • Overall condition of the property

CIA helps create a custom search strategy and presents properties that match your goals and budget.

Step 5 — Underwrite the Property (Financial Analysis)

This is where CRE differs from residential real estate.

Key Metrics Every Buyer Must Understand

✔ NOI (Net Operating Income)

NOI = Income – Operating Expenses

✔ Cap Rate (Capitalization Rate)

Cap Rate = NOI ÷ Purchase Price

✔ DSCR (Debt Service Coverage Ratio)

DSCR = NOI ÷ Annual Loan PaymentsLenders typically require 1.20–1.30+.

✔ Cash-on-Cash Return

✔ Vacancy and operating history

Your CIA advisor provides full underwriting, including:

  • Rent rolls

  • T-12 financials

  • Expense breakdowns

  • Pro forma projections

  • Sensitivity analysis

Step 6 — Tour the Property and Inspect Systems

Before you make an offer, carefully review the physical condition.

Important Items to Inspect:

  • Roof + HVAC

  • Structural integrity

  • Plumbing + electrical

  • Parking lots

  • Landscaping

  • Accessibility (ADA compliance)

  • Environmental risks (Phase I ESA)

  • Deferred maintenance

For land acquisitions:

  • Soil tests

  • Topography

  • Utilities

  • Zoning

  • Easements

  • Environmental concerns

Step 7 — Make an Offer (LOI or Contract)

In commercial real estate, the first step is usually a Letter of Intent (LOI).

Your LOI should outline:

  • Purchase price

  • Due diligence period

  • Financing terms

  • Closing timeline

  • Earnest money

  • Contingencies

  • Seller disclosures

  • Tenant estoppels (if investment property)

Your CIA broker negotiates terms to protect your interests and secure a strong position for due diligence.

Step 8 — Conduct Due Diligence

This is the most important step.

Financial Due Diligence

  • Rent roll verification

  • Bank deposits

  • Leases & CAM reconciliations

  • T-12 income & expense report

  • Tax returns

  • Service contracts

Legal Due Diligence

  • Title search

  • Survey

  • Easements & encroachments

  • Zoning confirmation

  • Certificate of occupancy

Physical Due Diligence

  • Building inspections

  • Roof/HVAC reports

  • Environmental reports

  • Structural engineering opinion (if needed)

CIA assists you in evaluating risks, projecting future performance, and determining deal viability.

Step 9 — Appraisal & Final Loan Approval

Lenders require:

  • Appraisal

  • Environmental report

  • Rent roll / financial verification

  • Business financials (for owner-occupied buyers)

Your broker helps keep the lender on track and ensures all documentation is delivered promptly.

Step 10 — Closing & Transition

Once due diligence is complete:

  • Final loan docs are signed

  • Title transfers

  • Funds are disbursed

  • You receive keys and take ownership

After closing:

  • Meet with tenants

  • Update insurance

  • Set up property management

  • Begin value-add improvements

  • Transition utilities and vendor contracts

CIA stays involved post-closing to support leasing, referrals, or future transactions.

Final Thoughts

Buying commercial property is a powerful way to build wealth—but it requires careful evaluation, expert guidance, and strategic planning.

Creative Investment Advisors supports buyers through:

  • Opportunity sourcing

  • Deal underwriting

  • Financial projections

  • Lender introductions

  • Negotiations

  • Due diligence guidance

  • Closing and post-closing strategy

Whether you're a first-time investor or a seasoned buyer, CIA ensures you make smart, strategic, and profitable CRE decisions.

Next Step: Schedule Your Commercial Buyer Strategy Call

Want help finding, evaluating, or financing a property?


📞 Book your consultation with Creative Investment AdvisorsYour trusted partner for Commercial Real Estate, Business Brokerage, and Capital Advisory.

 
 
 

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