When it comes to investing in commercial real estate, how much do you know? People get into investment all the time, but it’s certainly not an easy gig. If you’re thinking about investing in commercial real estate, we’ve got you covered. Check out our top eight tips for getting into real estate.
1. Read Up
If you are serious about investing in real estate, the best thing to do is slow your roll and read up. Doing your research now will help you confirm whether you are truly interested in this or maybe got excited quickly but think it may be too much for you. Real estate is a lot of work and it’s by no means easy money. Hopefully doing research will teach you some more about the field so that you learn more and also get a good idea about your level of interest.
2. Take Time to Evaluate Investments
Investment does not have to be all duplexes and single homes, although many investors deal in these types of properties. You should also look into the benefits of checking out apartment buildings and even commercial properties. Most real estate investors do specialize, so take some time to consider what your ideal investment property type would be.
3. Consider The Various Property Types
A lot of investors become fairly comfortable with buying residential property and working within that area. However, that’s not the only type of property out there. There’s quite a bit, including properties you wouldn’t normally think of. There’s industrial buildings, land, office buildings, condos, larger homes, and mobile home parks. If you have experience with one in particular or think you might be interested in that area, focus on learning more about these types and the challenges associated with them.
4. Have Reasonable Expectations
When it comes to real estate, don’t get your hopes too high. Rarely are areas like this easy money or a quick pay for minimal work. Real estate takes smarts and it takes a lot of grit to get through it. Finding properties you like, learning about real estate, figuring out the fine print, buying properties and reselling them all takes time.
5. Realize There Is a Learning Curve
As with anything, there is a learning curve when it comes to real estate. Don’t get too discouraged if you feel like you don’t know much starting out; you’re at the beginning of your journey in real estate and it’s to be expected. To outsiders, real estate can seem deceptively simple– especially the way it’s sold on television shows and radio ads. There’s a learning curve to be sure, but stick with it and you’ll find yourself progressing not only in knowledge but in confidence too.
6. Remember That You Need to Spend Money to Make Money
You do have to spend some money in order to make money, so keep that in mind. You’re not just going to be buying or putting a down payment on a property. Once the offer goes through, you need to spend money on various things such as an appraisal, inspection of your property, and any other legally required tests.
7. Secure Good Financing
You need to either have money to spend when it comes to real estate investment or get a loan or have partners or backers. There’s a reason why it’s called investment as you do need money to invest! If you’re working solo, you’re also going to have to invest solo. That’s why often people are real estate investment partners, because two wallets can often be better than one. If you don’t have the cash, you’re going to have to get a loan if you want to go forward, which means that you’re often paying back interest. Be wary when it comes to loans and shop around for the best deals.
8. Be Careful When Partnering Up
It’s always best to be careful when choosing to work with a partner. Just because someone talks a big game does not mean that they’re going to be able to match that. In fact, it’s often a red flag. High initial enthusiasm from people who are unemployed or new to the business can wane quickly. Beware partnering with someone that you think will not work out! Working with a family member or friend can be a recipe for disaster, especially if they’re unmotivated and cannot follow through, so consider that before committing to a partner OR real estate.