| We all are thinking about it and some of us | | | | mercy of lenders who want to make sure that |
| are actually taking action and getting their | | | | you are in the position to pay for the house |
| hands on real estate investment properties. | | | | with your personal income. Commercial real |
| The longer the NY Stock Exchanges doesnt | | | | estate financing is based in the properties |
| produce desirable returns the more people are | | | | ability to produce positive cash flow and to |
| starting with real estate investments. | | | | cover the financing cost. |
| | | | |
| For most of us the obvious choice of | | | | After reading all these information about |
| properties are single family homes. Although | | | | commercial real estate you want to go out |
| you can invest in real estate without owning | | | | there and dive into the deals. Not so fast. |
| a home, most people follow the experience | | | | First, you need to learn as much about real |
| they made while purchasing their own home. | | | | estate as possible. In commercial real estate |
| This is familiar ground and the learning | | | | youre dealing with professionals. If you come |
| curve for doing a real estate deal of this | | | | across too much as a newbie you will waste |
| type is pretty slim. | | | | these guyss time and your commercial real |
| | | | estate career ended before it actually |
| Of course theres a drawback with this | | | | started. Second, no commercial real estate |
| approach. The competition is fierce and there | | | | lender will lend you any money if you cant |
| are markets where investors are artificially | | | | show at least a little bit of real estate |
| driving up the cost of the properties while | | | | investment experience. |
| completely discouraging first time home | | | | |
| buyers. If this is the case, the burst of the | | | | Whats the solution to this? Go out there and |
| real estate bubble is just a matter of time. | | | | do one or two single family home deals |
| | | | yourself. It doesnt matter if you make huge |
| How do you avoid these situations and still | | | | profits to start off with. Most newbie |
| successfully invest in real estate? How do | | | | investors are loosing money on their first |
| you get ahead of the competition and be | | | | deal anyway. If you can manage to show |
| prepared for bad times in real estate | | | | positive cash flow with your single family |
| investments as well? The only answer I have | | | | home deals you are ahead of the pack. |
| is commercial real estate. | | | | |
| | | | My advice, buy a small single family home in |
| Why commercial real estate you might ask? | | | | a decent neighborhood and rent it |
| Commercial real estate is a solid investment | | | | immediately. This will keep your out of the |
| in good and bad times of the local real | | | | pocket expenses at a minimum and you will |
| estate market. The commercial real estate Im | | | | have rent income to cover for your monthly |
| referring to are multi unit apartment | | | | expenses. Bonus, you gain experience as an |
| buildings. | | | | investor and as a landlord. |
| | | | |
| Yes you will become a landlord and No you | | | | Heres another observation I made during my |
| dont have to do the work by yourself. You are | | | | real estate investment career. Most people |
| the owner and not the manager of the | | | | like to analyze, learn, discuss and analyze |
| apartment building. The cost of owning and | | | | some more. They never actually got to do a |
| managing the building is part of your | | | | real estate deal. They love to talk about |
| expenses and will be covered by the rent | | | | real estate investments, but never did it |
| income. | | | | themselves. |
| | | | |
| Apartment buildings are considered commercial | | | | My approach to real estate investment was |
| real estate if there are 5 or more units. To | | | | simple. |
| make the numbers work you should consider to | | | | |
| either own multiple small apartment buildings | | | | - I bought some books about real estate |
| or you should opt for bigger buildings. This | | | | investment. |
| will keep the expense to income ratio at a | | | | |
| positive cash flow. Owning rental properties | | | | - I read every single one of them. |
| is all about positive cash flow. | | | | |
| | | | - I put together a simple plan on how I want |
| With investing in single family homes it is | | | | to get started. |
| easy to achieve positive cash flow. Even if | | | | |
| your rent income doesnt cover your expenses | | | | - I started looking for properties. |
| 100%, the appreciation of the house will | | | | |
| contribute to the positive cash flow. With | | | | - I bought my first investment property 30 |
| commercial real estate the rules are | | | | days after I started reading my first book. |
| different. | | | | |
| | | | - I made positive cash flow with all of my |
| While single family homes are appraised by | | | | properties so far. |
| the value of recent sales of similar homes in | | | | |
| your neighborhood, commercial real estate | | | | What is my point? You have to go out there |
| doesnt care about the value appreciation of | | | | and practice what youve learned. The only |
| other buildings. The value of the property is | | | | valid credential in the real estate business |
| solely based on the rent income. To increase | | | | is practical experience. Having a couple of |
| the value of a commercial real estate you | | | | deals under your belt, you can go out there |
| need to find a way to increase the rent | | | | and start looking at commercial real estate |
| income. The formula on how this is calculated | | | | and even impress seasoned investors with your |
| would be too much for this short article. I | | | | knowledge. Because you made this experience |
| listed a few very helpful books where you can | | | | by yourself and you know what youre talking |
| find all the details. | | | | about. |
| | | | |
| Whats another advantage to invest in | | | | Book reference for commercial real estate |
| commercial real estate? Commercial real | | | | investments: |
| estate financing is completely different than | | | | |
| financing a single family home. While | | | | Gary W. |
| financing a single family home you are at the | | | | |