Video 3: How To Invest Personally In Commercial Real Estate
Take this to recap everything discussed in video three.
What are the benefits of investing publicly rather than privately?
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When investing publicly, you have complete control over liquidity, as well as the ability to trade in higher volume. When investing publicly, you are also sent SEC quality reports, which contain information about each market's quality of executions, stock-by-stock.
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When investing publicly, you have complete control over liquidity, as well as the ability to trade in higher volume. When investing publicly, you are also sent SEC quality reports, which contain information about each market's quality of executions, stock-by-stock.
Why is it important to view property you invest in?
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Real estate is a physical asset and should be treated as such. Every physical aspect of the property and its location is going to influence value, so it is important that you get a feel for every aspect of the building to guarantee the highest possibility of success.
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Real estate is a physical asset and should be treated as such. Every physical aspect of the property and its location is going to influence value, so it is important that you get a feel for every aspect of the building to guarantee the highest possibility of success.
What is the proper way to evaluate a spreadsheet?
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Spreadsheets are often taken too literally when evaluating real estate. It is important to keep in mind that each cell is only a projection.
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Spreadsheets are often taken too literally when evaluating real estate. It is important to keep in mind that each cell is only a projection.
What are the dangers of going into business with someone you have been warned not to trust?
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The people you do business with are almost as important to the investment as the property itself. Going into business with someone trust is key, and it is important that you have each other’s best interests in mind.
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The people you do business with are almost as important to the investment as the property itself. Going into business with someone trust is key, and it is important that you have each other’s best interests in mind.
wary a tenant has near-spotless credit it is important to be wary of ...
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There are plenty of examples of tenants who had high credit quality some time ago but within just a few years decreased dramatically. Credit quality is an important indicator of financial responsibility, but it is not the only indicator that a tenant will be a good match.
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There are plenty of examples of tenants who had high credit quality some time ago but within just a few years decreased dramatically. Credit quality is an important indicator of financial responsibility, but it is not the only indicator that a tenant will be a good match.
The purpose of a bet is to...
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When investing in real estate it is wise to place a theoretical bet on the property. It is important to remember that the property bet is no more than a tool to help gauge whether the property truly meets standards.
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When investing in real estate it is wise to place a theoretical bet on the property. It is important to remember that the property bet is no more than a tool to help gauge whether the property truly meets standards.
If the other figure in the negotiation isn’t knowledgeable about real estate, what should you do?
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It makes it really difficult when the person on the other end of the deal is not knowledgeable about real estate. Save the time and the stress by simply leaving the deal.
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It makes it really difficult when the person on the other end of the deal is not knowledgeable about real estate. Save the time and the stress by simply leaving the deal.
When you put more debt into a project than equity, what happens to the risk?
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The risk increases because debt lenders always receive their money first so any decrease in property value is going to affect the equity holder first. If the equity holder stacks too much debt and ends up losing more than was put in as equity, the investor risks losing personal assets as collateral.
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The risk increases because debt lenders always receive their money first so any decrease in property value is going to affect the equity holder first. If the equity holder stacks too much debt and ends up losing more than was put in as equity, the investor risks losing personal assets as collateral.
Why is it important to understand competition?
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When investing in a property, it is important to look not only at what other people are doing but also what they have done in the past. When investing, it is also vital to your success to keep up with competitors' capital improvements.
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When investing in a property, it is important to look not only at what other people are doing but also what they have done in the past. When investing, it is also vital to your success to keep up with competitors' capital improvements.
The purpose of evaluating property types is to understand…
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With each type of property, there are different aspects that need to be considered. With a warehouse, you shouldn't worry about the aesthetics of the building, because its success hinges more on function than form with industrial tenants. But with an apartment, aesthetic and location are the most important qualities.
YOU'RE WRONG!
With each type of property, there are different aspects that need to be considered. With a warehouse, you shouldn't worry about the aesthetics of the building, because its success hinges more on function than form with industrial tenants. But with an apartment, aesthetic and location are the most important qualities.
Why is it smart to hold off on buying when money is cheap?
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In general, money is cheap when real estate prices are at their peak. Often times, investors will loan more than they can pay back and struggle with excessive debt. Rather than buy when money is cheap, sell and hold off until the next cycle.
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In general, money is cheap when real estate prices are at their peak. Often times, investors will loan more than they can pay back and struggle with excessive debt. Rather than buy when money is cheap, sell and hold off until the next cycle.
Why is it a crucial skill to be able to understand and analyze supply and demand?
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A skill shared by all of the greatest real estate investors, being able to accurately analyze supply and demand is key in determining how successful a property is. Knowing what supply and demand are at a given moment allows for accurate analysis on what your capital stack should look like, when to buy, etc.
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A skill shared by all of the greatest real estate investors, being able to accurately analyze supply and demand is key in determining how successful a property is. Knowing what supply and demand are at a given moment allows for accurate analysis on what your capital stack should look like, when to buy, etc.
Why is it important to understand the fundamentals of real estate?
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When you are determining whether or not to buy, the fundamentals are always a reliable source to turn to in order to truly evaluate the possibility of success.
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When you are determining whether or not to buy, the fundamentals are always a reliable source to turn to in order to truly evaluate the possibility of success.
The dangers of investing short term in private real estate are…
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With short term real estate, timing is crucial. The problem with investing short term is it is hard enough to gauge when to buy in and when to sell, and with a limited time frame the success of the property is dependent on how well you execute that.
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With short term real estate, timing is crucial. The problem with investing short term is it is hard enough to gauge when to buy in and when to sell, and with a limited time frame the success of the property is dependent on how well you execute that.
