The Commercial Real Estate Buyer Guide

Step One: Define the Asset and the Objective

• Owner occupied for your business, stabilized income, or a value add repositioning. These are three different deals with three different risk profiles.
• Confirm permitted use. Houston has no traditional zoning, but deed restrictions, plats, parking requirements, and city ordinances still control what you can do.
• Match the capital structure to the plan: conventional commercial debt, an SBA 504 or 7a for owner occupied, cash, or a partnership.
• Decide the hold period and the exit before you buy, because both drive how you should structure the debt.
• Choose the ownership entity with your CPA and attorney before contract, not at closing.

Step Two: Underwrite It Yourself

A broker's proforma is a marketing document. We rebuild the numbers from primary sources and treat anything unverified as unproven.

• Read every lease and amendment. Confirm term, escalations, options, expense pass throughs, exclusivity, and termination rights.
• Reconcile the rent roll to actual bank deposits or the trailing twelve months of operating statements.
• Verify real expenses: taxes at the reassessed value after your purchase, insurance quoted today, management, utilities, and repairs.
• Underwrite realistic vacancy and a capital reserve. A roof or a chiller does not care about your model.
• Test the debt service coverage against a higher rate and a longer lease up than you expect.
• Compare rents to the immediate submarket, not to a citywide average.

Step Three: The Letter of Intent Sets Your Risk

Most of the deal is decided before the purchase and sale agreement is drafted. Terms conceded here are difficult to recover later.

• Feasibility period long enough for third party reports, lender review, and municipal responses.
• Earnest money staged, with a clear statement of when it goes hard.
• Access rights for you, your inspectors, and your lender's appraiser, plus a document delivery list with a deadline.
• Extension options priced now, in case a report or an approval runs late.
• Clarify seller deliverables: estoppels, subordination agreements, service contracts, and warranty assignments.

Step Four: Due Diligence Checklist

• Title commitment with every exception document, plus an ALTA survey showing easements, encroachments, and access.
• Phase I environmental report, and a Phase II when the prior use or the Phase I warrants it. Dry cleaners, fuel, and auto uses deserve extra attention.
• Property condition assessment covering roof, structure, mechanical, electrical, and paving, with remaining useful life.
• ADA and life safety review, and confirmation of the certificate of occupancy for the intended use.
• Tenant estoppel certificates confirming what the leases say and that nothing was promised verbally.
• Utility capacity, drainage and detention, and any pending assessments or municipal projects nearby.
• Verify parking count against the requirement for your use, not the current one.

Step Five: Financing, Closing, and the First Ninety Days

• Lender timelines drive commercial closings. Appraisal and environmental ordering should start the week the contract is signed.
• Coordinate estoppels, tenant notice letters, and security deposit transfers before closing, not after.
• Prorate taxes, rents, and prepaid expenses on a written settlement statement you have reviewed line by line.
• Day one: insurance in force, vendor contracts assigned or replaced, and tenants introduced to the new ownership and payment process.
• First quarter: reset the operating budget, review the tax assessment, and protest it if the purchase price supports doing so.

How I Work: Transparency, Integrity, and Privacy

Commercial pursuits are handled quietly. Your interest in a site is not discussed with tenants, competitors, or the market. You will get the documents rather than a summary of the documents, and I will bring in the attorney, CPA, engineer, or environmental consultant the deal requires rather than pretending the answer is mine to give.