Most people are terrified of diving into this type of investing. It’s usually a bigger mortgage, there’s more expenses overall, it requires a lot more maintenance and care. And bills bills bills. Not to mention the tenant headaches. So why buy commercial real estate? Why not stick to what you know? Houses are enough of a burden, but a commercial building? That’s huge!
Well, I’ll tell you. The truth is, commercial property is MUCH less risky! Remember that old saying Cash is King? Well, in this case, CASH FLOW is King! There are many ways you can attain a cash flow fountain, even if you are starting small you just need to start. One of the best things about commercial real estate, is you have more than one tenant to rely on to pay your mortgage for you. If you rent out a house and that one tenant doesn’t pay, then you are stuck with the bill.
With commercial, if you do it right, you always have a cushion with your other tenants, should you have a delinquent tenant. It’s called leveraging. And the banks actually really love commercial real estate. It has more security in their eyes as well, as long as you can prove the cash flow, so keep excellent records. It doesn’t matter how many properties you own and what the total value is of those properties. You must have CASH FLOW to sustain the property so you won’t back yourself into a corner and end up losing it all anyway.
There’s an incredible amount of inventory out there as well since the majority of the population is terrified of this market segment. This is why there is less competition when purchasing and a big bonus for the buyer! Let everybody fight over the housing market, while you know better, cuz commercial investing is where it’s at! This is your real security. This is where your true empire is shaped. This is the mash and gravy, baby.
- Look around where you live. Maybe there’s a commercial parcel for sale. Are you a carpenter? Do you know some? You could build something and flip that for starters.
- You see a for sale by owner sign on a small office building. Call the owner. Ask lots of questions. Pull the title on the property. Is there a mortgage or is it clear title? Maybe a Vender Finance deal works here.
- Maybe that run down apartment building you walk past everyday is your next gold mine. With a little elbow grease, how could you improve the neighbourhood?
The more you keep alert to what’s around you, make those calls, ask questions, calculate the possibilities, the better you will become. The better you get at this, the more likely you will get on the highway to wealth. If it’s just stability you want, that’s good too. The banks loan against property for a reason. Real Estate is the most stable investment you can make.
Step it up a notch and get into the commercial game. Put your nose to the grindstone and see where your at in five years. If you do it right, and are determined to learn, you will achieve financial independence.
Get to it!
Until next time,