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Writer's pictureMaria Chernetska

What are locks in transactions?

Updated: Apr 9

Don't leave home without those strategies. As a commercial property investor, you should ensure that you have what you need to purchase commercial properties. You never know when you might come across a great deal that you must analyze quickly and get under contract.


Here is a list of what's important: ·


· Make sure your cell phone is well charged or bring along a battery pack. This way, you will have sufficient battery time to speak, send and receive emails, and take pictures and videos of properties. In addition, search for the voice memo function so that you can save notes on properties or ideas when you are out and about.


· A commercial property contract favorable to the purchaser: These types of agreements should include exemption clauses and other terms. which allows you to lock down a contract property while maintaining the ability to exit the agreement if you don't like it. ·


· An outside third party or mentor: You need a mentor to whom you can talk or make a deal to ensure that you are not caught up in the agreement's emotions. Mentors can also reassure you that you are doing the right thing.


You need to understand the three Rs of commercial property investment. By being aware of these Rs, you can avoid wasting time on marginal business transactions:


· Risk: What part of my money should be at risk? Would I be personally responsible for the debt that was used to finance the marketplace? How could this agreement hurt the objectives and relationships of my life? How long does that take?


· Award: What is the profit of the transaction? When would I see that money (cash at the close of a refinance, cash flow over time, or long-term equity I would use in a couple of years, for example)? Am I sure I'm going to make that profit? In other words, what must happen to me if I have money on my hands? We also seek out all the "business sweeteners" that we can easily use to increase cash flow or property value. And we're looking at ways of structuring funding to increase cash flow or return on cash.


· Deployment: Is it a one-time operation, or can I reproduce it with a different property? Can I use my learning and efforts from this arrangement as a model for future arrangements? What contacts and relationships will this agreement provide that will be helpful to me in making more transactions in the future? Can I broaden and take advantage of that agreement to make it a much bigger opportunity?


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