At InvestmentClub360‘ seminars, we face the usual question, “How do I get from investing in single-family properties to investing in larger and complex commercial real estate properties?”
If you are serious about making good money from commercial real estate investment, there are certain things you need to be clear about.
First of all, real estate isn’t a ‘get-rich-quick-scheme’ as most investors and dealers would like you to believe. It requires proper planning, patience, and hard work from your end.
Second, there has to be a sound investment strategy so that you’ll reap the kind of RESULTS you’ve been looking for. The investment plan has to be easy to understand and use, too. Here are few helpful steps that will help you find a ‘good’ commercial real estate property Dallas that will generate positive cash flow to you.
1. – Gather sufficient capital. Let’s face it – without sufficient balance in your bank, you won’t be able to finance a property. But that doesn’t mean you need to have 100% of your own cash to buy a commercial real estate, though.
You can borrow money you need from your lenders.
There are two important steps you can take to get approval for investment loans from your lenders. First, maintain a good credit score. Second, prove them you will be able to pay back on time. If you need more information on this, simply visit your attorney’s office and ask them how to apply for investment loans.
2. – Define the buying criteria. Next, sit down, take out a piece of paper and pen and define your purchasing criteria. For example, define the size, property type, and the location of a potential commercial real estate. Choosing a property located at a dense area could mean HIGH rental demand which could mean high rental income for you. On the other hand, a nice looking property in a remote place means very few people will visit and rent it.
Remember that each property type requires different type of skill levels to manage them and in return, they offer different ROI for the investors. To ensure you’ll make better ROI, make sure to fit your potential property to your individual requirements rather than other way around.
3. – Estimate the property’s value. Once you’ve taken care of the funds and defined your buying criteria, estimate the approximate value of that property based on your ROI requirements, its current conditions, and your purchasing power.
4. – Create offers that will be too good to reject. The next thing you must do is to identify ‘key’ strengths (unique selling point) of the potential commercial real estate that makes it stand out from other properties in the area. Use this USP to develop an offer that will be too good for others to reject.
Once your offer is accepted, expect to reap the rewards but also think about saving. There are two key elements of building wealth – asset protection and tax planning. Ask your local attorney to help you with this if you are purchasing a commercial property for the first time.
These 4 steps should help you figure out a way around an investment ‘wall’ that most beginner investors face.
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