Are you interested in investing in commercial real estate but don’t know how to get started?
First things first, you’ve made a smart investment decision. Commercial real estate is a prime investment destination with low risk and the potential for highly lucrative returns. However, this isn’t to say that it’s fail-proof.
If you start investing in commercial real estate without the right information and expertise, it’s easy to lose a lot of money. Lucky for you, we’re here with the help you need.
In this article, we’re sharing insider secrets that will help you become a successful commercial real estate investor.
1. Learn About the Factors That Affect Commercial Real Estate
If you have invested in the stock market, as have over 50 percent of American households, you’re probably familiar with the factors that can affect movements in the stock market. The commercial real estate market isn’t any different, but the factors that affect it aren’t necessarily the same as those that affect the stock market.
The state of the economy, for instance, is one factor that affects both the stock market and the real estate market. However, the location of a real estate investment can affect its value. Location isn’t an issue in the stock market.
When you have a good understanding of the various factors that affect commercial real estate investments, you’ll be in a better position to make smart investment decisions.
The big question is: where do you learn?
You can take short courses on commercial real estate investing. This is the best way to learn. You can also peruse the information that’s available for free online or find a mentor.
2. Raise Sufficient Capital
Although there’s a ton of money to be made in real estate, you need to first spend a ton of money. Real estate is a capital-intensive investment.
This is why you need to raise adequate capital before you start investing. You don’t want to start building a commercial property, for instance, only to run out of money halfway through the project.
If you’re self-funding the investments, well and good. However, if you need to rely on other sources, you can take out a commercial real estate loan or a commercial mortgage. It’s also possible to partner up with other investors who’re interested in investing in real estate.
3. Set Up an Investment Company
If you’re a seasoned investor, you probably already have an investment company.
If you don’t, it’s not too late to set up. Creating an investment company, especially an LLC, shields you from personal liability in the event of losses.
It’s also more professional doing business with an investment company. As an example, look at Sands Investment Group, which has recently acquired Family Dollar in Louisville, KY. As Family Dollar closes, the investment company will expand its investment portfolio, no doubt.
Setting up an investment company or group is also ideal when you’re joining hands with other investors.
Get Started Investing in Commercial Real Estate
You’ve made a sound decision to start investing in commercial real estate. However, that’s the easy part. The hard part is to start investing and become successful. With these secrets, you’re halfway to finding success.
All the best and keep reading our blog for more investment tips.