Congratulations on deciding to become an investor, or at least thinking about it! Whether you’re ready to purchase your first investment property, or you’re just curious about this topic, I suspect you’ll find this blog post helpful. If you’re looking for some investment tips, this post should be perfect for you.
Tips on How to Become an Investor
This is a digest on how to get started with your investment. I could spend a lot of time talking about each point, but instead, I’ll briefly make my points and then give you links to click for further reading. One quick disclosure though: This isn’t an all-inclusive list of steps to take when preparing to become an investor. The points below are simply designed to get you thinking and set you on the right track. If you want more info, read the linked articles or give me a call and I’ll be happy to give you more insight.
I’ve said it several times in the past, and I’m sure I’ll say it again. Make sure you find a commercial real estate broker who’s worth working with. You don’t want to end up working with someone who you’re going to get frustrated with, because they can’t perform. Below are a couple great articles that go into further detail on finding a worthy broker:
- Find a Real Estate Agent Similar to Robin Hood!– This article talks about finding an agent who’s good at what he or she does. It gives four different tips on what to look for in a CRE broker.
- Wouldn’t Cut Your Own Hair– This was primarily written for people who are interested in leasing office space, but the principles all apply to investors as well. The author talks about the benefits of using a commercial real estate broker, rather than trying to find an investment opportunity on your own. If you think it may be better to find your own investment opportunities, you should probably read this article.
- Why a Business Broker?– The author of this article makes some great points on why it’s better for you to use a broker, rather than taking on the stress of going through the selling process on your own. It’s geared toward people who want to sell their business, but the principles also apply to investors as well. Working with a broker can be very helpful.
Know the Type of Investment You’re Looking For
There are so many investment options available to you. Do you want to invest in multifamily properties, restaurants, retail space or something else? Do you want a fancy investment property in a high demand location, or do you want something in poor condition that you can flip? Are you looking for something NOW or can you wait awhile and keep a lookout for the perfect property to snipe? You should get the answers to these questions figured out, sooner rather than later, to ensure your investment goes well.
- Invest Like the Big Dogs– This article gives a lot of great information about how to start investing. The author talks about investing in the type of property you are interested in (I.e. office space, multifamily, retail, etc.). He also talks about having a strategic plan and an exit strategy. If you haven’t already considered this type of info, then read this article.
- What’s the Differences Between a Class A, Class B and Class C Building?– If you don’t already know the answer to that question, you may want to figure it out. This has to do with the preexisting condition/value of a property.
- Client Real Estate Training – Pulling the Trigger– A moment ago I mentioned sniping a property. That’s what this article talks about. You may want to have the inside intelligence about the exact type of property you’re looking for. Then, as soon as that property hits the market, you can jump on it, before the opportunity is gone.
Understand the Common Leasing Options
Okay, so you’re interested in purchasing an investment property. So, why learn about leasing options? It may be a good idea to learn about leasing, because you may want to take your property and lease it out. With that being the case, you should familiarize yourself with the most common types of leasing options available to you.
- Commercial Real Estate Lease Basics– There are four different types of commercial leases that are very common. This article introduces you to those types. This article also provides links to learn more about the most common leasing options, beyond just the introduction.
Be Prepared to Negotiate
As a person who wants to buy a property, and as a person who may want to lease or sell your property later, you should really be prepared to negotiate your deals. You could save or make significant money if you know what to ask for during this stage of the deal.
- Negotiating a Restaurant Lease like the Big Dogs (Part 3)– This article targets restaurateurs, but the concepts are very relevant for most investors. The author talks about being prepared for hidden fees, being ready to negotiate in a way that prevents your competitors from bothering you, it talks about annual rate increases, and it also talks about security deposits. These are all good things to be aware of.
- What Happens to Your Tenants When You Sell Your Building?– This is a very insightful article. At some point, you may want to know about this because it will make an impact on tenants of your own; but then again, you may not have tenants in your future. However, what if you buy a property that already has tenants in it? Can you renegotiate their rent? If you’re going to inherit tenants, you may want to take a look at this article.
Be ready to sell – Have an exit strategy
Right now you’re interested in buying an investment property… not necessarily thinking about selling it. But remember, it’s a good idea to have a general exit strategy in mind, even before making your first investment. You don’t need all the details, but have a general idea of how you plan to eventually sell. It can’t hurt to be prepared, but it can hurt to be unprepared. Keep that in mind!
- Invest Like the Big Dogs– I already linked to this article once in the post, but it’s a good article. The author wrote a very strong paragraph that covers exit strategies. It’s worth reading, if you haven’t already.
- Selling Your Business 101– Selling a business is one way to exit. You could also transfer ownership, or do something else. As the title implies, this article gives you the basics on selling your business.
- Why Sell Your Business– Of course, a business and an investment property aren’t necessarily the same thing, however, they often overlap. For that very reason, we have a couple advisors in our company who specifically specialize in selling businesses. This article talks about the reasons why many business owners decide to sell.
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About Sonny Granger – Sonny has more than 15 years experience in the real estate industry, with a special passion for commercial brokerage and development. Sonny is based in Pensacola, Florida, with broker licenses for FL, GA and AL. He is also one of four partners for SVN | SouthLand Commercial. Click here to view his full profile, or if you would like to contact him, you can call him at 850-434-7500, or email him at [email protected] You can also follow him on Twitter at @Fisheye33333