Common Mistakes to Avoid When Starting Your Medical Practice

If you’re ready to begin your own medical practice, there are a myriad of decisions to make and obstacles to avoid. Starting a business is always risky, but the benefits of owning your own practice are expansive and rewarding. Being a successful business owner is easy when you know what common mistakes to avoid, so let our experts at Boulevard Medical Properties help you start on the right foot.

No Clear Business Plan

In the medical world, practices are often defined by the kind of care offered and the type of insurances accepted. This is an important decision to make as a business owner and if you don’t have a clear direction for your practice, it may be a rough start.

Before you begin hiring employees or researching medical office space for lease, decide what your practice will specialize in and what types of insurance will be accepted. When you have a clear plan and you can confidently outline your future goals, your current situation becomes that much easier to plan.

Once your model is firmly established, you need to begin a layout for the future as well. Establishing a long-term business plan will benefit your practice for years to come as opposed to a strategy composed of smaller goals that you will accomplish in a handful of years. Continued growth is the key to maintaining a great and successful practice.

Lack of Sufficient Capital

Starting a new business is a difficult pursuit and along the way, there may be extra fees or higher prices that are not anticipated in your business model and revenue plan. It’s important to have the right amount of capital for the practice you are attempting to get off the ground and it is always a good idea to over budget and take your location into consideration. For example, minimum wage differs from state to state and even between cities. This discrepancy can affect the salaries for all your employees, as even salaried workers will expect a different yearly amount based on how high the minimum wage is.

Another example comes from leasing or purchasing of an office building for your practice. In some states you may need a significantly smaller amount of money to purchase a building or secure a lease, but if you are in a more urban area of a larger city, the rent and down payment on purchases will increase dramatically. If you’re looking for the perfect medical office space for lease, contact our team at Boulevard Medical Properties today to start your search. Leasing medical offices instead of buying full buildings is an effective way to cut down on your costs and give your growing business the flexibility it needs.

Making Large Purchases Immediately

Once your business has a building, employees, and a strategic long-term plan, it can be tempting to begin buying every new piece of equipment that is available. This is a common mistake made by new medical professionals who want to bring cutting-edge technology to their practice to increase the number of new patients. This is almost always a costly move, however, as the newest technology may have nothing to do with your specialty or it may be an expensive item that is not utilized in your everyday appointments.

The best way to make sure you’re only buying integral medical supplies is to start with the technology and equipment you use on a daily basis. If your specialty requires an expensive piece to perform standard appointments, do your research to make sure you are getting the best equipment at a good price.

If you’re searching for the perfect medical office space for lease, call our team at Boulevard Medical Properties. Find a great new office at an affordable price today!

Getting Started in Commercial Real Estate

The first step when planning to purchase commercial real estate in Los Angeles is to write down the type of property you are looking for. Will it be used as your place of business, as an investment property, or for something else? If investing, are you willing to put in the work to be a landlord? If you are looking for a business property, do you need to buy, or could you lease instead? Do you already have a location in mind? What is your status regarding cash, financing, and your ability to make a down payment?

To get your property search underway get in touch with Boulevard Medical Properties today.

Accept the Learning Curve

It will be easier for you to work with people in commercial real estate in Los Angeles if you learn some of the industry lingo.

  • Loan-To-Value (LTV): A ratio of how much money you’re asking from a lender vs. the total value of what you want to purchase.
  • Debt Service Coverage Ratio (DSC): Operating income over total debt service. Basically, how much of the debt you’ll be able to cover each year with income.
  • Capitalization Rate (Cap Rate): Income of the property divided by the total value of the property.
  • Cash on Cash: Annual income over how much you actually invested. The amount invested could be just the amount your down payment was.
  • Vacancy Rate: Percentage of properties that are vacant in a time period in a given area.
  • Ad Valorem: A tax based on the assessed value of a piece of property.

Consider a Variety of Properties before Making a Choice

When visiting the different properties, make note of what you like and dislike about each of them. Location can strongly influence a property’s value – as well as how fast it sells – and its importance cannot be emphasized enough.

What you’re looking for is a good “fit” on as many fronts as possible. You want a property in the right place, for the right price, that serves that right purpose.

Hire the Experts

Buying commercial real estate in Los Angeles can be complex. Depending on the type of property you purchase, you may need to hire an

  • Accountant
  • Commercial real estate lawyer
  • Commercial realtor
  • Mortgage broker
  • Tax expert
  • Notary
  • Appraiser
  • Engineer
  • Environmental specialist

There’s plenty you can do on your own, but some jobs just require expert knowledge to be done properly.

Figure out Financing

Most people need at least some financing help to purchase a property. You can use

  • Banks
  • credit unions
  • home mortgage companies
  • Also, think about what kind of credit you have and ask what interest rate the companies can give you
    If these traditional financing methods don’t work for you, find out if the seller can help. Read up on things like
  • seller carry-back
  • subject-to
  • second mortgages
  • lease options

Make an Offer!

When you are ready to make an offer, consult with your lawyer and tell him or her about your plans. Your lawyer will have you sign a Letter of Intent (LOI) about the property and all the contracts involved. The LOI is NOT binding.

Never sign anything without your lawyer reviewing it first. Have your lawyer explain what all written agreements mean to you in plain English (or hire an interpreter to explain in the language with which you are most comfortable.)

Due Diligence and Escrow

This is where you get down to the details.

  • You will order an ALTA (American Land Title Association) survey, which can be used as part of the due diligence.
  • You and the seller will hire an escrow officer to be the neutral third party in the sale.
  • The final closing documents must be produced.
  • You have the right to a final inspection of the property. If something negative comes up and you want to cancel the purchase, you have a right to tell the escrow officer to deny the transfer of funds.

If you are looking for medical and dental office space at prime locations in Los Angeles, the search is over! Boulevard Medical Properties has the space for you. From practices like USC Fertility and Perinatal, to State of the Art Imaging Centers and Community Clinics, Boulevard buildings are home to a wide variety of medical professionals – and we want to welcome you to our community! Contact Us Today to set up an Appointment!

Benefits of Leasing Commercial Property

If you are a new or small business, the decision of whether to buy or lease commercial property is a significant choice to make. Weighing the negatives versus the benefits of leasing commercial property can be easy with help from Boulevard Medical Properties. Find out what the top advantages are of choosing a commercial lease in Los Angeles and learn about how leasing will help your business grow and how it will also save you money.

Upfront Costs

Owning a building comes with other costs that aren’t included in the real estate estimates. Keeping up on building maintenance through cleaning, electricity and providing internet is a large expense that potential buyers often do not consider. When you are a leasing tenant, however, this maintenance cost is not your responsibility. Some buildings may ask for a yearly or monthly fee for cleaning, but it is a significantly smaller total than taking care of it completely on your own dime.

Moving into a leased building is also a much simpler task. If you are using a loan to cover the purchase of a corporate building, most lenders take a large down payment, and charge interest on all money loaned. With a leasing agreement, you would only pay a refundable deposit along with the first rent payment and no accrued interest. Renting allows for small and new businesses to avoid several costs that could eventually become too expensive to sustain. Also, leasing costs are completely deductible, unlike mortgage costs which are only partially deductible. More and more start-up companies are opting for leasing options to decrease their overall spending, especially in the first few years of business. If you’re looking for a commercial lease in Los Angeles for your new or small business, contact the professional team at Boulevard Medical Properties to start finding your next great office space.

Flexibility

One of the most common reasons new or small business opt to rent office space instead of buying buildings, is that they gain a flexibility to move buildings and move neighborhoods depending on their rate of growth. If your business fluctuates quickly, you can end your lease and move to a larger building to accommodate for the new hires or new equipment. If the opposite were to occur, the option is also great for business looking to downsize. Companies that are looking to move from one area in the city to another for growth potential or in response to client onboarding have the freedom to do so without worrying about selling a building while trying to find another or having to find a tenant while still technically occupying the space.

Maintaining office buildings both inside and out is a difficult and expensive job, but leasing allows tenants to simply move if a newer or better office opportunity comes their way. Legally, tenants can also put in personal requests with landlords or building owners to make repairs or upgrades to the occupied building. In some cases, this is a better option for both the renter and the owner, as the renter will get a more upgraded office building without having to leave the space, and the owner will not lose out on rent money or the responsibility of having to find a new tenant. This is another flexible option afforded to you as the tenant as the decision-making process about whether to leave or extend a lease sits primarily in your hands.

If you are a new or small business owner interested in getting a commercial lease in Los Angeles, contact our skilled team at Boulevard Medical Properties. We can help you find the right building at the right price and you can get your business moved into the perfect new property.