Brian Fielding Provides Advice on How to Form a Partnership for Buying Commercial Properties

Woman and man going through the partnership documents before investment

Brian Fielding shares that partners in a successful venture rarely note the various provisions in the partnership agreement unless there is a dispute

Property Investment Veteran Brian Fielding knows that many people who decide to go into real estate investment do so in some form of partnership. The legal definition of a partnership is “a legal relationship existing between two or more persons who are contractually associated with each other as joint principals in a business or investment venture.” Of course, partnerships exist in many forms, most commonly today in the form of a limited liability company, also known as an LLC.

Investors often enter into partnerships to share in exposure and opportunity, but also to complete the credentials necessary to affect a purchase.Few people have all of the knowledge, the capital and the various resources to complete the purchase of a commercial asset. The sharing of responsibility and risk in any one property will often allow the savvy investor to diversify and acquire a balanced portfolio of quality commercial properties.

“You should always seriously consider whom you plan to go into business with,” shares property investment veteran Brian Fielding. “There is something to the old line that the fastest way to make an enemy is to loan them money or enter into a partnership.”

This is why it is important to choose one’s partner wisely. Investors will want to find someone who is detail and goal-oriented, is honest, and does not micro-manage or steamroll the other person’s opinions. The most effective partnerships tend to have persons with different skills and assets – it is the effective sharing process that is the mark of the most successful ventures.

Whenever investors get into a partnership, it is always important to have formal documentation and ensure that the partnership complies with local laws. Retaining a knowledgeable attorney is a “must,” but check references because some otherwise excellent lawyers are not deal makers.

There are few things that will tear a partnership apart or kill a deal more than hardheaded attorneys who are so enamored with their knowledge that they forget a deal can be made only through cooperative negotiation. A good attorney will happily explain the rationale for every provision and will build an agreement that protects the parties in every “worst-case scenario” shares property investment veteran Brian Fielding.

Remember that a legal agreement is there to protect the parties when things go wrong. Partners in a successful venture rarely note the various provisions in the partnership agreement unless there is a dispute. Make certain that the attorney has included a dispute resolution provision that allows for timely and inexpensive decision-making. Property investment veteran Brian Fielding suggests including a provision for mediation by a qualified professional over time-consuming and expensive litigation.

For more information on this and other property investment topics, visit http://briandfielding.com.

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Tips for Purchasing a Piece of Commercial Real Estate from Expert Brian Fielding

Large Banner On A Building Advertising Vacancy

Brian Fielding knows that those who are looking to invest in commercial real estate can be confident that they are entering a market with a lot of potential. Commercial real estate offers a number of advantages over other kinds of investments, and the market seeing positive trends and new opportunities for buyers. Fielding also knows that those who are new to the market may need some help with the finer points, and can use some tips to help them make smart decisions about their purchases. Here, he offers some of his top tips for new investors.

  1. Take time to see properties: Brian Fielding points out that despite excitement over seeing a great property, it is not always wise to purchase the first property that you see. You should look at multiple properties and compare them to make sure that you are getting the most bang for your buck and choosing a property that best suits your needs. There are so many factors that determine what the best purchase will be. It is vital that you do not purchase a property immediately without considering them all and making an informed decision.
  2. Have a checklist and questions: Before viewing properties, Brian Fielding reminds you that it is essential that you have a prepared checklist and some questions to ask about the property. Being armed with all the factors that you must consider, as well as your own desires for the purchase is essential as it can help narrow down your possibilities quickly and efficiently.
  3. Don’t be afraid to seek help: New investors may find that they have many questions that they need answered along the way, or may be in situations where they need some additional expertise. Brian Fielding reminds you that it is always important to seek experts when they are needed. Not only are there always knowledgeable individuals like Fielding, who can give you more insight on the market, but there are other professionals who can help in other aspects of the purchasing process. A commercial real estate lawyer, an account, and appraisers are all specialists that may come in handy.
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Fielding Investments Shares the Dangers of Not Knowing the Market

Market Research for Real Estate Market

Mind Mapping is effective for comparing site options for investing says Brian Fielding

Brian Fielding of Fielding Investments knows that one of the most powerful assets that a commercial real estate investor can have is insider knowledge about the area where their property is. Without doing one’s due diligence and research about an area, even the most beautiful and well-appointed asset can fail. Because of this common mistake that is made time and time again in the commercial real estate industry, Brian Fielding is sharing this information about why understanding the area in which your investment is situated in is so crucial to your success in the commercial real estate industry.

Not doing your homework.

Fielding Investments shares that overall, many commercial real estate investors will fail because they have not done their proper homework about the area in which they desire to invest in. As more and more investments are made from abroad, this fact is on that can actually help a local investor shares Brian Fielding of Fielding Investments. Foreign investors (whether they be outside of the city or outside of the country) are at a disadvantage, because they have not worked and lived in the area in which they desire to invest.

Fielding Investments knows that residents have seen businesses come and go, which areas of town are growing, which are dying, which locations seem to do well and which tend to fail no matter what type of tenant is there. This information is invaluable and cannot be gleaned through several visits to the area – it is information that can only be learned from living there. It is for this reason that Fielding Investments always encourages commercial real estate investors to consider purchasing property in their community, because they already have all of this crucial and excellent information that out-of-town investors covet so much.

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Brian Fielding Reveals Financing Options for Commercial Real Estate

Commercial real estate financing options from Brian Fielding

Brian Fielding reveals several ways that investors can purchase commercial real estate.

Brian Fielding of Fielding Investments knows that one of the biggest challenges that those who enter the commercial real estate field face is finding financing for their endeavors. Fortunately, there are many different options that are available to commercial real estate investors when it comes to financing. One of the easiest ways to finance an endeavor is to pick up a partner to go in on a piece of property together. It is important to choose a partner with experience and managerial attributes in order to ensure that your venture is a success! You can also get a large loan from the bank, which is a lot harder to do if you want to invest in residential real estate.

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Q and A: Is it Time for Me to Get a New Roof? Answers from Brian Fielding of Fielding Investments

Today we received a wonderful question from Tad in New Orleans who asked “Our investor group found a really nice retail property in a location that we think is going to become more and more valuable, but as part of our due diligence, our engineer warned that the EPDM roof [whatever that is] was nearing the end of its useful life. The seller tells us that we can put another roof on top of the existing one very inexpensively. Is that really true?”

 

Dear Tad,

As with most questions like this, there is no hard and fast rule. EPDM [properly known as ethylene propylene diene terpolymer] is arguably the most common type of roofing used for relatively flat surfaces and, properly applied, such roofs will be warranted for between 15 and 20 years. Available in black and white, EPDM roofs are made from oil and natural gas, and are applied in a variety of widths that overlap and are sealed with adhesives or specially formulated tapes. Properly installed and maintained, these roofs should provide excellent protection for your valuable asset.

However, there are many factors that determine the success that you will enjoy with your rubber roof. A poorly adhered seam or a puncture wound [oftentimes inflicted by careless maintenance persons who service rooftop systems such as HVAC, antennae plumbing vents, grease scrubbers, etc.] will leak and may often be hard to find and correct. Similarly if the roof was not professionally engineered, contractors will tend to find “shortcuts” that lower their bid or increase their profit with shortcuts that will likely be unseen by anyone other than roofing professionals. Keep in mind that standing water is the bane of most roofs, and a proper design will have slope of at least 4% … again somewhat dependent on the climate conditions in your target community.

There are innumerable variables that will determine the type of roof you require and to determine if, in fact, you can simply apply a second roof on top of an existing one [many communities do not allow this practice … particularly where the roof load has not been fully analyzed and deemed satisfactory to the new additional weight]. How the roof is fastened, to what weather standards it has been designed [for instance a roof placed on a building in South Florida will likely have to be able to withstand higher wind lift standards than in other areas of the country], the manner in which slope is provided [and to what standard], and the rating of the proposed insulation all are major factors in estimating cost and one should not assume that the company with the lowest price is the best value.

  At Fielding Investments, we utilize professional roofing engineers to set the specifications for roofs that we require. The fee is often quite substantial, but we find that only the most professional firms will quote our jobs and we enjoy the benefit of knowing that all quotes that we receive are “apples for apples”.

With all but NNN leases, the requirement that the roof be leak-proof is borne by the Landlord … so we recommend that you have a roofing engineer inspect and advise whether the Seller’s suggestion that you can install a roof over the existing leaking one meets your local building code. Keep in mind that if the roof has leaked, there is a strong possibility that there will be damage to the underlayment, including insulation, wood joists, and plywood decks, to say nothing about one of the most troublesome environmental concerns of mold formation.

Good luck with your investment activities … let us know if your deal is successfully culminated.

Yours,

Brian Fielding

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Q and A: Residential Property Investment vs. Commercial Property Investment

Dear Mr. F.

I have been trying to buy my first investment property and most people suggest I buy residential over commercial. Why do you favor the latter?

Joseph M.

 

Dear Joseph,

Perhaps it is a matter of personal preference, but for our investors, we have had the most consistent returns in commercial real estate. If you are seriously considering buying a multi-family home for pure investment, I would caution you to insure that you have no lead paint [or other environmental] issues and that you do the most extensive credit check on your prospective tenants. Removing a bad tenant can be a costly and timely proposition … particularly when the proposed eviction involves families. Further, if you fail to fully and completely remediate all environmental concerns, you may find yourself with a tenant who doesn’t have to pay rent until the work is completed using a full permit process and then reviewed by a licensed environmentalist.

With commercial tenants, there is rarely any significant emotional attachment to the process of removing them for delinquent payments and the courts tend to enforce contracts quite literally. Understandably, that may not be true when a judge hears tales of woe from persons who are going to losing the roof over their head.

Good luck with your search … let us know how things work out.

Brian Fielding

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Brian Fielding Sheds Light on Misconceptions about Contaminated Properties

Brian Fielding knows that many investors will balk at the word “contaminated,” oftentimes thinking that the property has been exposed to radiation, chemical issues or worse. While there are some of these properties on the market, the majority of “contaminated” properties pose no danger and can be remediated with a variety of new technologies over an extended period of time.

 

“The shrewd investor understands the legislation and limits of liability when investing in a contaminated property,” said property investment guru Brian Fielding. “There are real opportunities out there to make some huge gains with minimal exposure.”

 

Educated investors are rarely intimidated solely by the term “contamination” and often are able to purchase a property at a huge discount to the underlying value.  Mr. Fielding recommends that persons thinking of investing in “environmentally challenged” assets retain an environmental professional and an attorney familiar with that state’s regulatory authority if they are considering purchasing properties with that designation.

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