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6 Essential Steps to Invest in Commercial Real Estate in 2025
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6 Essential Steps to Invest in Commercial Real Estate in 2025

February 24, 2026 5 min listen 1 reads

6 Essential Steps to Invest in Commercial Real Estate in 2025

Investing in commercial real estate (CRE) can be lucrative, but it requires a strategic approach. Whether you're a seasoned investor or a newcomer, this guide breaks down the process into six manageable steps.

Step 1: Choose the Right Property Type

Commercial real estate encompasses various property types, each with unique characteristics and investment potential. Common options include:

  • Retail: Stores selling products or services directly to consumers.
  • Office: Spaces used for business operations, ranging from small offices to high-rise buildings.
  • Industrial: Warehouses, manufacturing facilities, and distribution centers.
  • Multifamily: Residential properties with five or more units, such as apartment complexes.
  • Hospitality: Hotels, motels, and other lodging establishments.
  • Land: Vacant plots zoned for commercial development.

Step 2: Define Your Investment Strategy

Your investment strategy will significantly impact your returns. Here are some common approaches:

  • Fix-and-Flip: Purchase, renovate, and sell a property for a profit.
  • Wholesale: Buy properties at a discount and sell them quickly without renovations.
  • BRRRR: Buy, rehab, rent, refinance, and repeat the process.
  • Buy-and-Hold: Purchase property for long-term appreciation or rental income.

Step 3: Secure Financing

Most investors rely on loans to purchase commercial properties. Here's how to navigate the financing process:

  • Pre-approval: Obtain pre-approval from lenders to show sellers you’re serious.
  • Loan Types: Explore options like commercial real estate loans, hard money loans, and bridge loans.
  • Qualification: Lenders evaluate credit scores, financial health, and business experience.

Step 4: Build Your Professional Team

Assemble a team of experts to support your CRE endeavors:

  • Commercial Real Estate Agent: Helps locate properties and negotiate deals.
  • Real Estate Attorney: Ensures contracts protect your interests.
  • Accountant: Manages financial statements and tax implications.
  • Contractor: Handles property repairs and renovations.
  • Property Manager: Oversees tenant relations and property maintenance.

Step 5: Find the Right Property

Look for properties with strong ROI potential based on:

  • Location: Consider local tenant quality, zoning laws, and economic trends.
  • Financial Performance: Analyze income, expenses, and market value.
  • Market Trends: Evaluate rental rates, vacancy rates, and construction costs.

Step 6: Complete Due Diligence and Close the Deal

Once you’ve found a property, follow these final steps:

  • Inspection: Conduct property inspections, appraisals, and environmental assessments.
  • Loan Finalization: Provide updated financial documents and review loan terms.
  • Closing: Sign the final documents and transfer ownership.

FAQs

  • What credit score is needed? Aim for 660+ to secure CRE loans.
  • How long does loan approval take? Typically 1-2 weeks for straightforward cases.
  • What are loan repayment terms? Up to 30 years, depending on the lender.

Conclusion

Investing in commercial real estate is a complex but rewarding endeavor. By following these six steps, you can navigate the process with confidence and maximize your returns. Whether you’re looking for long-term income or quick profits, CRE offers opportunities for investors of all levels.

6 Essential Steps to Invest in Commercial Real Estate in 2025
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Host 2: Today, we’re diving into the top six essential steps to invest in commercial real estate in 2025. Let’s explore strategies to navigate this lucrative but complex market.
Host 1: Understanding property types is key. Retail properties offer steady income, industrial spaces like warehouses are booming due to e-commerce, and multifamily properties provide consistent cash flow.
Host 2: First, how do you decide which type of commercial property to invest in?
Host 1: Hospitality properties can thrive in high-tourism areas, while land is a long-term play for future development. Align your choice with your goals and market trends.
Host 2: Any trends for 2025?
Host 1: Office spaces are shifting to flexible coworking setups due to remote work.Industrial properties are in high demand for supply chain growth, and multifamily properties remain a safe bet in urban areas with growing populations.
Host 2: Once you’ve chosen a property type, how do you decide on your strategy?
Host 1: It depends on your risk tolerance and goals. Fix-and-flip offers quick profits but requires renovation expertise.BRRRR—buy, rehab, rent, refinance, repeat—is great for building a rental portfolio.
Host 2: What strategy do you recommend for beginners?
Host 1: Buy-and-hold is ideal for long-term appreciation, and wholesaling is low-risk but demands strong negotiation skills. Choose a strategy that matches your skillset and financial capacity.
Host 2: Financing is a big hurdle. What’s the best way to secure funding?
Host 1: Start with buy-and-hold multifamily properties. They’re less volatile and provide steady rental income, making them a solid foundation for building wealth.
Host 2: Tips for negotiating better loan terms?
Host 1: Get pre-approved for a loan to show sellers you’re serious. Explore options like commercial real estate loans or hard money loans for quick funding.
Host 2: Why is assembling a professional team important?
Host 1: Lenders will assess your credit score, financial health, and experience—aim for a credit score of 660-plus and have your documents ready.
Host 2: How do you find trustworthy team members?
Host 1: Shop around with multiple lenders to compare rates. Work with a financial advisor to strengthen your application and ensure you’re getting the best deal.
Host 2: What should investors look for when scouting properties?
Host 1: Commercial real estate is a team sport. A skilled agent helps find deals and negotiate terms.An attorney ensures contracts protect your interests, an accountant manages taxes, contractors handle renovations, and a property manager oversees tenants and maintenance.
Host 2: Any red flags to watch out for?
Host 1: Surrounding yourself with experts minimizes risks and maximizes returns.
Host 2: Once you’ve found a property, how do you close the deal?
Host 1: Ask for referrals from other investors. Interview candidates, check credentials, and look for experience in your property type.
Host 2: Advice for first-time closers?
Host 1: Focus on location, financial performance, and market trends. Prime locations attract quality tenants, so research zoning laws and economic indicators. Evaluate income and expenses to ensure profitability.
Host 2: To recap, the key steps are choosing the right property type, defining your strategy, securing financing, building a professional team, finding the right property, and completing due diligence.That’s our top advice—go implement it today!
Host 1: Stay informed about rental rates, vacancy rates, and construction costs to gauge future potential.
Host 1: Avoid properties in declining neighborhoods or with high vacancy rates. Be cautious if the seller can’t provide clear financial records—it could signal hidden issues.
Host 1: Conduct thorough due diligence—property inspections, appraisals, and environmental assessments to uncover hidden problems. Finalize your loan by providing updated financial documents and carefully reviewing terms.
Host 1: At closing, sign the documents, transfer ownership, and ensure all legal requirements are met. Attention to detail here can save you from costly mistakes.
Host 1: Work closely with your attorney and agent to review all documents. Don’t rush—take time to understand every detail before signing.