Top 5 Things You Should Know About Commercial Property Construction
When considering an investment property in Miami Beach, constructing a new property or remodeling an existing building are both good options. JMK Property Investment is experienced with successful commercial construction projects. We know commercial property construction seems overwhelming initially. We’ve put together five things to know about commercial property construction to give you some general information.
Commercial Property Construction Projects Come In All Sizes
Some people picture cranes looming over a high-rise building when considering commercial property construction. Large construction projects are certainly one aspect of commercial property development. There are other lucrative options to consider.
Small-scale commercial construction projects are a place to start if you don’t have a lot of capital. Examples of small-scale projects include updating a building’s facade or adding on to an existing structure. By buying an affordable building and doing some updates, you can enjoy a revenue stream quickly.
Medium-scale commercial construction projects are a bit more involved. They consist of updating a building’s structure, a complete remodel, or a building expansion. A mid-size commercial construction project takes more time and effort but has excellent profit potential.
Large-scale commercial construction projects involve building a brand-new structure. Don’t assume this isn’t possible for your investment property in Miami Beach. Projects can be successful by being creative in designing a building with a footprint for smaller lot sizes. Another option is replacing a dated structure that is no longer feasible with a new one.
JMK Property Investment is actively seeking commercial property investment in Southern Florida with a focus on the Miami metropolitan area. We’ll work with you in finding the appropriate site for your commercial building project.
One common denominator for all of the project examples we’ve presented is the importance of the General Contractor. The General Contractor you select plays a key role in your construction project’s success. JMK Property Investment is also a General Contractor, and we know how to manage projects that deliver profits
There Are Many Steps to Commercial Property Construction
A commercial construction project begins with a good idea or concept. There are many steps in the construction process to turn that idea into reality. Before you invest in commercial property construction, you should have a general understanding of what’s involved.
Planning is a crucial step in a project’s success. It starts with finding the right site. A market feasibility study helps determine which site is best. Once a site is picked out, an architect and general contractor are selected. The project begins to take shape through meetings between these professionals and the investor.
The architect then designs schematics for the structure and selects building materials.
Before construction begins, investigators will check the site to ensure there are no environmental hazards. Utility companies will complete any necessary work. You will need to obtain building permits prior to beginning construction. The General Contractor begins procuring materials and selecting subcontractors.
The building is constructed with the General Contractor managing subcontractors from several trades. Once the building is complete, it’s time for a post-construction clean-up. The architect inspects the site to make sure the work was completed properly. Any necessary final inspections by government agencies are conducted at the project’s conclusion.
Financing for Commercial Property Construction is Unique
Traditional commercial construction loans are on a draw schedule. The lender disburses draws when the builder meets specific project milestones. A down payment or initial deposit for a commercial construction loan can be between 10-30%. This is determined by a loan to total project cost ratio, which is usually between 80-85%. Investors in a commercial construction project can provide funds upfront for the initial deposit and to lower the amount borrowed.
The repayment schedule for a commercial construction loan can be between 5-25 years. Lenders look at credit scores and debt-to-income ratios when approving commercial construction loans.
It’s ideal to start the financing process as early as possible. By starting early, an investor can check with several lenders to see which is the best fit for the project. Starting early also helps set realistic expectations on how much an investor can finance. Once the design process is complete and a budget established, you should secure financing.
Many Variables Can Impact a Commercial Construction Project
When taking on a commercial property construction project, expect the unexpected. Everything may go as planned, but anticipating challenges helps set realistic expectations. Material delivery delays or a subcontractor falling behind can throw off a project’s timeline. Weather affects the construction schedule. These are just a few examples of challenges you might encounter.
JMK Property Investment has the knowledge to help minimize the impact of construction challenges. Our construction management team’s goal is to deliver projects on time and on budget, regardless of challenges.
We’re an Excellent Resource for Construction of Investment Property in Miami Beach
JMK Property Investment streamlines the construction process by providing the services you need for a successful end result. With JMK Property Investment, you deal with one company as both your architect and general contractor. We provide an in-depth market analysis with all of our construction projects. We even have established relationships with lenders and investors that can help you achieve your commercial project development goals.
Once the building is complete, we can handle the leasing and management of the property. We can excel in managing your investment property in Miami Beach.
JMK Property Investment has a unique and comprehensive approach to commercial real estate. Contact us to learn more about the services we offer.