Escrow inspections & appraisals

The Investment Property Process: Step-by-Step

Purchasing a commercial or income-generating property involves more than simply signing a contract—it requires financial analysis, legal coordination, and strategic planning. Here’s a step-by-step breakdown of what to expect once you’ve identified a property that fits your retirement and investment goals.

1. Initial Agreement and Earnest Money Deposit

A purchase agreement is a binding legal contract between buyer and seller. In commercial transactions, the structure and wording of the agreement are crucial.

To streamline the process:

• Keep everything in writing. All terms—including counteroffers, addendums, and timelines—should be documented and signed by both parties. We’ll help you draft, review, and organize all legal paperwork.

• Stick to the schedule. The purchase agreement will outline key dates for contingencies, inspections, financing, and closing. Staying on track reduces risk and ensures a smooth transaction. We’ll manage this timeline proactively, keeping you informed every step of the way.

2. Closing Agent / Escrow

A title company or real estate attorney will act as your closing agent, managing escrow, holding your deposit securely, and performing title research.

Their role includes:

• Ensuring clear title with no liens or undisclosed encumbrances

• Reviewing easements, zoning restrictions, or use limitations

• Ensuring all newly created encumbrances (e.g., financing, easements) are properly recorded

Some commercial or mobile home properties may have land leases, access agreements, or environmental restrictions, so a thorough title review is critical.

3. Determining How to Hold Title

The way you hold title can significantly impact your tax exposure, liability, and estate planning. Depending on your goals, title may be held:

• Individually

• Through a corporation or LLC

• In a trust or other legal entity

We strongly recommend consulting a real estate attorney or tax advisor to determine the most advantageous structure for your situation—especially if the property is part of a long-term retirement plan or generational wealth strategy.

4. Due Diligence and Inspections

Once under contract, you’ll enter a due diligence period to inspect the property and confirm it performs as expected.

This may include:

• Physical inspections (roof, HVAC, electrical, structural)

• Environmental audits (Phase I or Phase II if required by lender or zoning)

• Financial review (rent rolls, profit & loss statements, operating expenses)

• Zoning and code compliance checks

• Lease audit, if the property is tenant-occupied

Depending on the results, you may proceed with the deal, renegotiate terms, or cancel based on contingency protections in the contract.

We’ll connect you with qualified inspectors, environmental consultants, and specialists suited to your property type.

5. Appraisal and Financing

If you’re financing the acquisition, the lender will require an independent appraisal to verify the property’s value. Commercial appraisers evaluate based on:

• Net Operating Income (NOI)

• Cap rates

• Comparable sales (comps)

• Replacement cost

• Location and market conditions

Your lender may also request:

• Updated financials on the property

• Personal or business tax returns

• Entity documents (LLC or corporate)

Staying in close communication with your lender—and responding quickly to documentation requests—is essential to avoid closing delays.

6. Property Insurance

Unlike residential insurance, commercial property insurance must reflect the unique risks and use case of the asset. This may include:

• General property insurance (fire, flood, natural disaster)

• Liability insurance (especially important for retail or multi-residential assets)

• Loss of income coverage

• Specialty policies (e.g., environmental liability, equipment breakdown, umbrella coverage)

If the property includes a mobile home park, coverage may also need to address infrastructure, tenant-owned structures, and public access areas.

We can connect you with experienced commercial insurance providers who understand the nuances of your asset type and market.

7. Final Steps Before Closing

As the closing date approaches:

• Confirm loan approval and funding timeline with your lender

• Verify all due diligence and inspections are complete

• Review final closing documents, including prorations, fees, and title work

• Ensure entity structure is properly registered for closing

On closing day, the final documents will be signed, funds will be transferred, and ownership will be recorded. From that point forward, you’ll take possession of a performing asset designed to support your retirement income and long-term investment goals.

Your Advisor Through Every Step

This process involves a lot of moving parts—but with the right guidance, it’s entirely manageable. From the initial offer through closing and beyond, I work closely with clients to ensure every phase is clear, strategic, and aligned with their financial objectives.

If you’re ready to take the next step, I’m here to help you move forward with confidence.