So You Want To Be A Commercial Real Estate Investor!
Congratulations on your decision to embark on one of the most lucrative and exciting opportunities in American commerce today. It has been reported that 75% of people with significant wealth achieved their wealth using real estate as a large part of their investing strategy. However, real estate investing should not be attempted if you’re not willing to invest in yourself. Real estate knowledge can be gained thru formal or self education. It is one of the few fields where a person can excel and make money but who has limited formal education but does have a strong desire to excel and a good work ethic. These qualities together can lead to riches.
Investing in your own real estate education is a must before embarking on even the most modest rung of the real estate ladder, i.e. single family homes. As you climb the real estate investing ladder you will encounter duplexes, 4 unit apartments, multi-unit apartment buildings, larger apartment complexes as large as 500 units, commercial office buildings, retail blocks, shopping centers, industrial buildings, single tenant net leased properties, raw land and many other opportunities.
As you look into which types of real estate you are interested in you first must decide on your particular needs or intentions. Do you need immediate cash flow from your investment or an investment that will actually produce a loss for tax write-offs? Are you a buy and flip kind of guy or girl or do want to hold for the long range? One thing is for sure: YOU MUST UNDERSTAND WHAT YOU ARE DOING AND WHY FIRST! Warren Buffet said, “Investing must be rational; if you can’t understand it, don’t do it.”
I specialize in income producing property, specifically apartment building complexes at Strather and Associates, one of the premier real estate brokerage companies in Detroit for creative real estate investing. Income revenue is produced through rents out of which must be paid recurring operating expenses (i.e., real estate taxes, insurance, heat, payroll, etc.) All financing costs (principal and interest payments) must also be paid from the rental income. What is left over is the “cash flow” or “net return” on the owner’s investment.
The current state of the real estate market across the country has created a unique opportunity for the savvy, educated investor. Property values are at an all time low in residential as well as commercial property sales. Therefore, the depressed market presents the golden opportunity for a novice as well as the experienced investor to purchase low now and potentially sale high later or hold and reap the benefits of increased equity as the property increases in value. There is an old real estate adage that says, “You make your money in real estate at the time of purchase”. That means that you buy with a real understanding of the true value and potential of the investment and purchase knowing that you have built-in equity at the time of purchase or that the property will increase substantially in value with improvements.
The concepts and theories in real estate are vast. One of the first things I would advise an investor to do is start reading books on real estate investing of which there are hundreds. If you are interested in the creative field of investing I would recommend that you read Herb Strather’s book, “Getting Rich Is Easy”. Herb Strather has completed more than a $billion in closed transactions and has the experience and track record to show you the road to riches through creative real estate investing. Another smart thing to do to embrace real estate investing is to join an investment group. Rubbing shoulders with other like-minded people will provide you the support of a cohesive group to mingle with, share ideas with and gather encouragement. One of the most exciting and progressive real estate investing groups I would recommend is The Power to Be Free. This is a group of dynamic people who have come together for the sole purpose of supporting each other in their quest to understand and participate in the wealth of opportunities available to the savvy real estate investor. The Power to Be Free offers seminars, bus tours and net working that is invaluable to the serious investor.
As we get to know each through these communications I encourage you to contact me with your questions or property acquisition needs as I will work diligently to help you in any manner possible.
Armanda Herbert
Commercial Real Estate Coordinator
The Power to Be Free
www.Thepowertobefree.com
Tags: commercial real estate foreclosure, real estate, cash flow, property investments, cashflow 101, investing, commercial real estate investing
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