Picking Up Properties: Commercial Real Estate Investment for Beginners

Picking Up Properties: Commercial Real Estate Investment for Beginners

It’s no exaggeration to say that the post-pandemic era represents one of the most lucrative real estate opportunities in recent memory.

While the COVID pandemic forced an unstable period of constant change onto all of us, forcing many of our businesses to adapt or be submerged, this period of change led many to reconsider their current housing situations. A massive migration from cities to smaller towns and nearby suburbs took place, as renters from the city weighed their smaller living spaces and found them wanting as many of the reasons they moved to the city (cultural hotspots, job opportunities, and the like) shut down for the foreseeable future. This migration kept the real estate market alive when other industries were suffering; now, with the pandemic receding slowly into the rearview mirror, another migration is taking place as these people move back to the cities, creating a certifiable real estate boom.

While some experts are concerned that this boom is more of a bubble, echoing the housing market crash of 2008, others are certain that with things returning to normal, this boom could go on for quite a while. This renewed housing market presents many lucrative opportunities for first-time real estate investors, if they’re only willing to reach out and seize it.

But how, you may ask… How can you, someone with little to no experience in commercial real estate, grab this bull by its proverbial horns and ride it all the way to a massive payday? This brief guide should equip you with the tools to seize the capital you need to get started, select marketable starting properties, and rake in the cash as you catapult your way to success.

Paying the Price of Entry: Obtaining the Required Capital

While anyone can enter the real estate game if they have the proper tools, not everyone will have the required capital to invest in properties right off the bat. Assuming you don’t have a spare $100,000 saved in an off-shore bank account that you can just spend on whatever, you’re probably one of these people. With that in mind, you have a few options: you can try and convince your family members to invest in your real estate career (which has a limited success rate), you can use what savings you do have to start small, or you can take out a commercial real estate property loan. Working with the right lender, you can take out the amount of money necessary to get started, then pay it off on a schedule you and the lender work out to not put unnecessary stress on your fledgling business.

Location: The Intersection of Busy and Safe

Once you have the capital to begin making investments, you have to then locate a property you can turn around quickly. Properties that are close to metropolitan areas, suburbs, and cultural hotspots are the most ideal, as it’s likely that people will move to those areas more frequently; though when considering property in more crowded, busy areas, you’ll want to consider the noise factor as well. Take into account the relative safety of the neighborhood. Does the surrounding neighborhood have a history of violent crime, or do the shops nearby have bars on the windows or doors? Better shop elsewhere.

Renovation at Low-Cost

Finally, there’s how much it will cost for you to turn a given property around. While the chances are that any property you invest in will need a little TLC before you turn it back onto the market, you can and should seek to limit how much you’ll invest in each property. Have a reputable home inspector take a look at every property before you spend so much as a penny, and keep an eye out for signs of obvious problems that will need fixing. Also, keep an eye out for features that are more likely to draw customers to your property, such as walk-in closets, marble countertops, and solar panels.

Entering the housing market can be daunting, especially if you have no experience in real estate and are concerned about your ability to get capital. But with the right strategy, a large amount of research, and good financial management practices, you’ll find that forging a career in real estate is not anywhere near as difficult as you thought. Moreover, you’ll be too busy swimming in your money to worry about it.

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