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Commercial real estate investing can be a nerve-wracking experience, especially for first-time investors. The high barriers to entry require a significant upfront capital investment, with most lenders requiring at least 25% of the investment before issuing a loan. With this level of investment, it’s vital for investors to conduct thorough due diligence to ensure that they “get it right.”

Start with establishing a realistic budget, investors should set their ROI goals and calculate expenses, including necessary repairs and any future repairs that may be required. Finding the right property manager, ensuring the building is up to code, and setting up a collections process are also important considerations.

While no commercial real estate investment is entirely risk-free, following this checklist can help investors minimize the risk associated with a specific deal. Each investor should develop a personalized due diligence process that will be refined over time as they gain experience and grow their portfolio. However, investors should also be careful not to fall into “analysis paralysis” and miss out on good deals.