It’s rapidly approaching summer and with that comes the idea of soaking up the rays, hanging out by the pool, and other fun activities. I happen to find it also to be a good time to mention that with commercial real estate, you have a wonderful opportunity to stop playing in the shallow end of the pool as a real estate investor.
It’s a no-brainer to ask any investors if they want to make more money with their business. It’s another to have an actual way to do so, without offering some clever gimmick or new twist on an old concept, as many traditional gurus tend to do. Commercial real estate is a bona fide way to make more money in the business and it may be easier than you think.
Commercial real estate is about little more than setting your sights on bigger deals. Sure, some of the mechanics and funding options are a little different from what you may be used to, but the other fundamentals are the same. For example, looking for motivated sellers, buying at a discount, bringing properties up to their full market value, and producing positive rental cash flow are all as relevant with commercial properties as they are with smaller residential homes.
Beyond the basics, commercial real estate just gets more and more exciting. There is more cash flow to be had and with less total effort than single family homes. What I mean is that a 100-unit apartment is going to produce more cash flow and will be less management intensive than 100 individual homes almost each and every time.
From a property improvement standpoint, how many ways can you build value into single family homes? You can buy at a discount and then make improvements to justify its sale at full retail value. That’s pretty much it, other than waiting years for the property to appreciate at whatever pace the market will bear.
Commercial properties can be value improved in the same ways but there are also other things you can do. You can optimize the overhead expenses of the property to reduce its monthly fixed costs. You can also increase rents over time. Both of these actions together will increase the value of the property and can do so in a very short period of time, giving commercial real estate a distinct advantage over its residential cousins.
As you can see, I am a big believer in not just pursuing profitable real estate investments, but also doing so in the most expeditious manner possible. Commercial real estate is the way to go to do just that and is the true fast track to a real estate fortune that is built upon the most solid of fundamentals. Folks, that is what it means to play in the deep end of the pool and I hope you’ll join me there.