Commercial Real Estate Investing For Dummies. Peter Harris
profit without having to actually own, fixup or manage anything! That’s why wholesaling can be a great way to get started investing in commercial real estate.
Snagging a Good Deal from Lazy Landlords
Good deals are deals that make you money with less to no hassle, right? So, if you can find a property where the landlord hasn’t been paying attention to the market or just hasn’t bothered to raise the rent, you can get the property under contract, raise the rents, and reap the benefits.
These types of properties are known as lazy landlord properties. This is one big advantage of working the Branch One side of commercial properties. Once a property is listed with a broker, (we call these Branch Two properties) it’s likely the broker will let the owner know the rents are below market. Once this happens, you’ve lost most of your ability to base your purchase price on the (lower) current rental amounts. Every time we do a rent survey, I’m pleasantly surprised to find that there’s still owners out there who don’t bother to keep their rents up at market rates.
Some of them just don’t know they could be getting more. We’re sure some of them simply don’t care. It’s easier for them to keep the rents low so they don’t ever have to deal with any turnover. As we just mentioned, after a broker gets a listing, they will either encourage a lazy landlord to increase the rents, or they’ll price the property based on proforma rents. “Just raise the rents and this will be worth what we’re asking for it,” Is what we’ve heard hundreds of times.
Choosing the right neighborhoods
The ideal property to wholesale will be in a decent neighborhood. You don’t want to bring your buyers properties with wonderful looking numbers that are located in an undesirable area. These days it’s very easy to check the crime statistics online to see if the property is located in a dangerous neighborhood. A property in a place with high crime rate is going to be difficult for almost anyone to operate effectively, so don't do it.
You want to be known as the person who provides contracts on decent properties in good areas, not the one who gets horrible properties under contract to pass along to your buyers. You don't want that reputation, so remember to look for good neighborhoods, and make sure you have it under contract either below the current or the proforma value. This way, you have value that you’re providing to your buyers, and they will become easier and easier for you to work with as they get to know and trust that you’re leaving enough money on the table for them.
Acquiring the Tools of the Trade
Here’s what you need to get started wholesaling commercial real estate. It's a simple way for anyone, regardless of their background or experience to get their foot in the door with commercial real estate.
A versatile laptop. You’ll use it to access Facebook groups, online forums, and send emails. Some investors prefer to use a tablet or even just their cell phone for these tasks.
A reliable cell phone (with a decent headset). You can get by without the headset, but headphones make it easier to talk on the phone while you’re out walking, exercising, or taking your kids to school.
Specialized knowledge. You’re getting a great start by reading this book.
Let’s answer a question that we hear a lot: What can I do to make sure I'm successful in commercial real estate? The answer is to get as much specialized knowledge as you can. Take some time to write out your goals along with an actual description of what you’re going to experience can be very powerful. Make sure to list out what it’s going to be like when you have a big commercial property. Include everything you’ll see, hear, and feel as you walk up to your building, your big apartment building. Take a moment each night right before you go to sleep to read through this description of your future, the one that you know is waiting there for you. We want you to see yourself doing it. See yourself enjoying the freedom and the new lifestyle you’ve created.
Конец ознакомительного фрагмента.
Текст предоставлен ООО «ЛитРес».
Прочитайте эту книгу целиком, купив полную легальную версию на ЛитРес.
Безопасно оплатить книгу можно банковской картой Visa, MasterCard, Maestro, со счета мобильного телефона, с платежного терминала, в салоне МТС или Связной, через PayPal, WebMoney, Яндекс.Деньги, QIWI Кошелек, бонусными картами или другим удобным Вам способом.