Investing in commercial real estate (CRE) can seem daunting. However, you would be surprised at how rewarding a venture into the world of real estate could prove to be. As for that hint of hesitation, maybe because you’ve never invested in CRE or you’re not as familiar with the process, let this article be your ticket to becoming a successful CRE Investor.
Understand that Investment equals risk. An investment, needless to say, is and will always include a certain amount of risk no matter the nature or kind. More so, we are required to use our resources, time, and effort. It can make us feel afraid and a bit apprehensive, however, if we want to reach our business goals and be financially free, we need to take that risk and make an investment. The ticket to better living and financial freedom is to take the first step and investing in commercial real estate is a wise move if you keep these things in mind:
Knowing your market
In commercial real estate, knowing your market means that you are capable of making an assessment and that you understand that there are forces at play when it comes to the value of real estate. A wise CRE investor considers the demand that is defined by the number of properties wanted in the market at a given time and with a specific price, as well as the buyers’ ability to purchase willingly under such considerations. Add to that, the property’s rarity and utility. Is it truly suitable for use? Given a limited supply of a certain type of property in a particular location, is your investment one of those they can rarely find but more than willing to lease because it is what they need? You may also want your investment to check-in well with the aspect of transferability. Be wary that the commercial property you are considering does not have impediments or legal encumbrances in any part of the deed.
Tip: Feasibility studies and Site Investigation Reports (SIRs) are your holy grail of knowledge in the real estate market. With these, you will have access to a comprehensive collection of questions with data results inclusive of business’ structure, zoning laws, land surveys, traffic issues, and many other similarly significant data surrounding your prospective investment.
Following a blueprint
It is never wise for a non-swimmer to jump into deep water without a lifesaver. How many people do you know would venture into the unknown, so to speak, and still comes out alive? They should be lucky if they could come out and still breathing. Now this may be a metaphor, but becoming a failure in a venture such as investing in commercial real estate can only be due to one’s lack of plan – a buffer. Following a blueprint is one of the secrets of any successful CRE investor. If you are able to fill your brain with all the necessary learning and information about your market, then you are most likely to come up with an effective plan. It will then be your track to follow as you navigate around the world of commercial real estate.
Finding the right approach
Do you ever notice how effective your grasp is if you are using all of your fingers? There will always be strength in numbers that even in our approach in looking for that most cost-effective investment in commercial real estate, a multi-pronged approach can prove to be the best one. Be with an approach that can help you find properties available while scoring the best of deals. Know the difference between direct and indirect approach for investing in commercial real estate and determine which of the two can offer you that multi-pronged option that you essentially need. If you choose to become a CRE investor, you can choose to become either a landlord through ownership of the property (direct) or maybe an investor through ownership of different market securities (indirect) like Real Estate Investment Trusts (REITs). The latter allows you to have shares receiving income from a selection of portfolios such as hotels, offices, retail spaces, and many more.
Embracing technology
Real estate, in its entirety, has always been one of the most lucrative ventures worldwide. Ironically though, even as its demand is unceasingly increasing through time, the necessary update to technology by most of its investors doesn’t really catch up quite fast. Do not be like the others who resist change. Soon enough you will find that technology advancements create more accessible connectivity which then enables you as an investor to better manage your investments with the social media and the website creating linkages that were not present before.
Adapting agility
What caps the perfect makeup of a successful CRE investor and being a cut above the rest is his dexterity and responsiveness. As previously cited, real estate nowadays exists in a tech-enabled ecosystem pushing investors to also realign priorities and enable them to adapt to the new demands. Adapting agility in terms of decision-making and coming up with a more updated portfolio for commercial real estate is a need. You must learn to up-skill in order to achieve and maintain a good amount of growth. Agile investors are those who come out with good relationships with customers hence, creating a significant investment income. The challenge posed by the constantly changing real estate environment and market can best be met if you would innovate continuously rather than work within already set guidelines which through time may not provide accurate solutions anymore.
Success will never be far from an interested CRE investor with an open mind. It doesn’t matter if this world is somehow new to you because learning the trade will always be an opportunity that is open for all those who come willingly. If the risk somehow overwhelms you, think about the reward that awaits you in the end. After all, success has never been achieved overnight but rather with ample time for learning and substantial experience related to commercial real estate.
Even after outlining all the information above, investing in CRE can still seem daunting. That’s why the Leveraged CRE Investment Team at Commercial Properties, Inc. is here to help you achieve your investment goals. Contact us at (480) 330-8897 or send us an email at request@leveragedcre.com.
Need help on how to get started investing in commercial real estate? We got you covered! We prepared a free e-book that will serve as your guide to achieve your long-term business goals or obtain that property you’ve always been dreaming of!
Phill Tomlinson is a commercial real estate broker with Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, and owner of the Leveraged CRE Investment Team specializing in investment sales and tenant/landlord representation in the Phoenix and Scottsdale submarkets. Phill applies over 21 years of experience in the Real Estate industry helping investors and owners maximize their returns.
Bookmark www.leveragedcre.com to learn more about the Commercial Real Estate market and keep informed of relevant real estate strategies designed to maximize your income property investment results. Connect and follow Phill on Social Media at sm.leveragedcre.com/smplatform. #LeveragedCRE