Is it a Good time to Buy Commercial Real Estate

Posted by: admin on Friday, March 21st, 2008

Commercial Real Estate like all real estate has its seasons. In the area we live in (Michigan), is a great
time to buy, values are lower than usual, but the rents in most areas are increasing due to the
demand. The financial ambitious can see the opportunity of a lifetime in this market, they understand
basic economics, if I can buy low and rent high I should be able to make a decent profit.

If you have the stomach to buy and hold a property for a 2-4 year time frame you can really create the financial
independence you like most are looking to have. What would it be like to own several small to
medium sized apartment building that generate enough passive income to give you the freedom you
deserve.

I can literally see millions of dollars of potential medium term profits on the market daily.
We hear daily about how Michigan is currently number 3 in bank foreclosures; well that is not only
the case in the residential market, but in the Commercial Market as well. It is very easy to go negative
in a small-medium sized apartment building.

There is a old saying you can either be part of the
problem or part of the solution, it does not take a brain scientist to understand that the money is
made by those who are solution oriented. The banks are lined up for those who can help them solve
there problems.

Problem # 1 for banks how I can get this non-performing asset off my books.
The great thing about this market is that it is not usually handled by some big asset management
company that has hundreds and hundreds of properties to liquidate monthly; it is usually handled by
an internal bank foreclosure process.

I recently contact a local bank, not one of the larger multinational
banks but a small local bank that has maybe 3-5 branches and asked if they had any bank
foreclosures and the gentleman on the phone was ecstatic to hear from me. So it was not like I had to
go into a bidding war to obtain any of the non-performing loans on the banks balance sheet.

The gentleman I talked to was the vice president of Commercial lending and the conversation we had
went a little like this, Hello Mr. Smith my name is Darrick H Scruggs and I invest mainly in commercial
Real Estate and I understand that in this tough economy most banks have some non-performing
commercial paper they might be interesting in liquidating.

“Well Mr. Scruggs I would be very happy to set up an appointment to go over our portfolio of loans that are either teetering on being foreclosed or properties that are actually in the process of being foreclosed.

I have everything from large parcels of vacant land that was intended to be used to build a Hotel on, to the local mom and pop store that
just can’t keep up due to increased competition from the big national chains that have moved in near
there locations. Mr. Scruggs as you can see I have inventory where would you like to start.

It was really just that easy, I explained that I have an affinity to buying apartment units of all sizes and that is
where he started his search. I immediately set up an appointment to get the ball rolling, and put a
face to voice behind the phone, this is a must for you to create yourself as a legitimate player in this
market, as the old saying talk is cheap.

Before I left his office I was able to look at 4 different units that he was willing not only to negotiate on the price, but give me all the financials and set up a showing of the properties as well.
Commercial Real Estate financing is different in that it does not in most cases have the same
laws that govern the residential real estate market.

There are government back loans in the commercial arena, but in most cases for the small to medium sized commercial loans the underwriting is done in house and the approval is not done with a standard conventional loan approval process. I
know from first hand experience the process can be tedious and very time consuming, but when you
have done 1 or 2 of them you will get the hang of them.

My goal is to just create awareness that you
don’t have to only play in the crowded market of the residential real estate arena, or join the minority
for now and invest in properties that for the most part are being sold at a discount with a cash flow
attached to it.

So take time and see if this might be an area you might be interested in learning more
about. If so you have found the right place. The entire goal of The Power to Free is to enlighten you
on out of the box opportunities that are available you just might not be aware of how easy it is to
obtain these life changing opportunities.

Darrick Scruggs