Has Thinking About Commercial Real Estate Investing Got You Confused?

Since the full extent of most people’s real estate investing consists of buying a home to live in, it’s easy to understand how going pro might seem overwhelming and confusing. Maybe it’s time you learned how easy it is to do serious real estate investing.

Perhaps it’s time to separate fact from fantasy when it comes to real estate investing. For many people, buying and selling properties seems like a pretty frightening undertaking. It’s only human nature. After all, many of us are afraid to jump into something new and unknown. This is especially true if you think there’s nobody to turn to for help.

However, help is available if you want to take the time to listen and learn from the professionals who have gone before you into the wild world of investing in residential and commercial properties. One of the more interesting ways of getting involved in this sort of investment simultaneously solves one of the most common challenges new investors face – getting funding for deals.

Investment Firms Always Seeking Partners

Some boutique investment banking firms fund commercial real estate deals, including financing deals brought in by prospective investors just starting out. Firms like this are constantly looking for partners who can bring interesting funding deals to the table. As these firms are not conventional banks, they’re not interested in the borrower’s credit history. In fact, they care more about their investment experience than their credit scores or bank balances.

Commercial Properties Mean Bigger Numbers

If your only experience buying property includes the house you live in, you’re not alone if the idea of doing a commercial real estate deal makes you feel nervous. No surprise, there are a lot more zeroes in a commercial deal’s numbers than in residential transactions. Investment firms play a bigger game than individuals do, and if you find one that’s a good fit for you, you can achieve bigger gains faster just by partnering with them. Funding your projects becomes a matter of near-certainty when you have a financial partner with an ample supply of money to invest.

Cities With Good Commercial Real Estate Investing Opportunities

The best real estate deals are not found in New York, Chicago or Los Angeles. The best deals are found in smaller, second tier cities like Naples, Florida or Beaumont, Texas. They’re not typically tier one cities, but are still very strong, robust cities that have access to jobs.

Types Of Commercial Applications Investment Funds Like Most

• Multi-Family – Because of today’s economy, many people are becoming renters, and have given up on the idea of home ownership.

• Industrial – Industrial warehouses that have been converted are becoming more popular with growing companies like Amazon and eBay.

• Office Space – Office space that has good, strong tenants makes a perfect investment.

• Retail – Grocery stores, pharmacies and other older and well established retail industries make excellent long-term tenants.

Three Ways To Transact A Deal With An Investment Fund:

1. Capital Placement – Providing capital to fund deals with a loan coming due. 2. Capital Formation – Raising private money in order to buy assets found. 3. Asset Arbitrage – Replacing non-performing loans as they come due.

This is just the tip of the iceberg when it comes to working with unconventional lenders like investment banking firms. The takeaway here is not to be afraid of a project just because it has a lot of zeroes attached to it. Do your due diligence and find a funding partner with experience in the sort of properties you’d like to add to your portfolio. They have the experience and cash a new investor lacks.

ABOUT  THE  AUTHOR  

Josh Cantwell of Strategic Real Estate Coach teaches that making serious money with real estate investing is all about one thing... seeing potential. This skill allows you to find those golden opportunities that others can't recognize. Where they're quick to focus on the problems, and why a certain deal "won't work", he teaches real estate coaching students how to turn potential into PROFIT. Check out the perfect real-life example in this house flipping case study video. https://www.youtube.com/watch?feature=player_embedded&v=cV8GablmfeY