Tips on How to Get Started
If you like to play Monopoly for fun, imagine how fun it
would be to play Monopoly for real. For many real estate
investors, scouting for a profitable commercial real estate
property is very much like the board game. And to many,
building wealth by investing in commercial real estate is
often deemed the holy grail of investing. However, scouting
and buying these types of properties is not as easy as
1-2-3, no matter what anyone tells you. But if you do your
homework and surround yourself with people who can help
you, you are well on your way to building a profitable
commercial real estate portfolio! Below are three steps on
how you can get started:
Step One: Educate Yourself
You can start by educating yourself. This includes reading
books and publications, talking to experienced commercial
real estate investors, attending classes and seminars, and
joining a trade association. A really easy and inexpensive
way to learn is to join a commercial real estate investor
network. These networking groups connect you to not only
the people you need to know (or should know) in the
business, but also to educational tools and resources to
help you become well versed in the practice.
Step Two: Surround Yourself With People Who Can Help You
Next, surround yourself with people who can help you build
your portfolio. In order to be successful in commercial
real estate investing, you must align yourself with a team
of professionals who are "smarter" than you. These
professionals include financing brokers, lenders, realtors,
attorneys, contractors, property inspectors, market
appraisers, title companies, accountants, engineers, and
many other industry service providers. In building your
team, make sure they know commercial real estate. For
example, an attorney who is well versed in closing a
residential deal may not know anything about closing a
commercial deal.
Step Three: Know How A Commercial Property is Financed
The third step to getting started is to learn how a
commercial property is financed. Many savvy residential
real estate investors have a wake up call when they try to
finance their first commercial property. Find out how
commercial properties are financed before you even start
scouting for one. The reason why this is so important is
because commercial properties are not financed based on the
purchase price, which is common in the residential
industry. Commercial properties are financed by evaluating
the cash flow of the property, which determines the
ultimate value of the property, not the actual
purchase/sales price. The difference between these two
values could be the difference between a dead deal and a
viable deal.
In summary, investing in commercial real estate can be a
wonderful way to build wealth for entrepreneurs and
investors alike. The more you immerse yourself in the field
of commercial real estate and the more people you meet, the
faster you can learn the tricks of the trade. Best of luck
to you and may you always find success in your ventures.
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Contributed by VEC Financial Group. The VEC Financial Group
(VEC) is dedicated to providing commercial mortgage and
business financing to property owners and entrepreneurs
across the country. VEC Financial provides these services
by connecting the right broker with the right borrower, who
ultimately finances with the right lender.
http://www.vecfinancial.com
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