Single-family houses are the first properties that real estate investors usually purchase, largely because they are also the most familiar. Commercial real estate often comes later, after an investor has become comfortable with smaller deals. Whether you’re dropping into stated income commercial real estate first or slowly moving into it after time in the residential market, there are many tips out there to help you on the path to success.
Be Patient When Beginning
It can get discouraging to work up to that first deal or to feel that your current deal is taking more time than others have. With residential real estate, it’s pretty easy to get in the groove with buying and selling. Stated income commercial real estate is different. There’s a lot of time spent simply making offers and screening potential deals. What you must remember is that things will get easier and go faster as you continue working at it.
Consider Your Options
Many people go from residential houses to apartments when they cross over to commercial real estate. There’s nothing wrong with that, but you can’t box yourself in to only work with apartment buildings. There are so many other options out there including industrial buildings, office buildings, land, mobile home parks, and more. Think about the different property types available and build a niche based on your goals, not what will be the easiest.
Find Great Financing
Residential and stated income commercial real estate loans are very different. You’ll find that the down payment is often more for commercial properties, but there is less personal liability to deal with. You also have more options when it comes to borrowing money from others for the down payment. It’s important, regardless, to investigate the best commercial lenders near you and find out if you are qualified.
Have a Mentor
Before you jump into commercial real estate investment, you need someone at your side who can answer questions that come up. Allowing yourself to buy a bad property because you aren’t sure about what regulations are in place isn’t a situation you want to be in. Find people who can give you the answers you need when they come up and make sure they’re at your side.
There are a lot of unique components involved in commercial real estate investing, many of which take time to understand. The information above should give you a head start on your way to success as you broaden your real estate career.