If you were looking for information on how to invest in commercial property from one of the big “Authority” real estate sites you’d quickly find yourself well out of your depth when it came time to buy a commercial property.
You may be unlucky enough to be in s#!t creek without a paddle when you start to sink!
I was reading an article from one of the big RE sites this morning, and I had to laugh… and then cry at the kind of information they were putting out.
It was like a picture of a can opener that says under it. To open a can, please refer to a real can opener.
Basically, it was useless and said nothing.
You go to these authority sites because they are supposed to be an authority… but the people writing these articles are not authorities.
Do you need to hear “To secure a commercial loan – talk to your loan advisor at the bank”?
Seriously? That’s what they were saying.
Not to toot my own trumpet but if you are serious about learning to invest in commercial should be going to someone with actual commercial property success, don’t you think?
This week I posted to my members a list of 27 high yield properties they should be looking at.
Yields that ranged between 8% and 11% straight out of the box.
And a contact who was offering the lowest commercial loan rates I’ve seen yet.
These two factors are what really represents success… Why?
Because net yields are what you get after the tenant has paid all the outgoings of the property. Out of that, you need to pay the mortgage on the property.
So the greater the difference between the net yield and the loan rate, the more money in your pocket.
You can see how this is information you can actually use.
You can see that to invest in education, and professional information can make a huge difference in both your learning curve and also your cash flow.
I’ve seen the uneducated by commercial at 6.5% yield and get a loan for 5.5%. It happens all the time and its madness.
They do it because they hear that commercial has better returns than residential, which it does. They see a 6.5% return and think that it’s a better return than the same money spent on a residential that maybe has a 5% return.
But it’s still not what I do – I wouldn’t touch a deal like that with a long pointy stick.
To reverse that, imagine if you had grabbed one of the properties I gave my students this week… let’s say one with a yield of 10.3% (there was a couple of those at different price points)
Then you had used my contacts to secure a commercial loan at just 4.4%
That’s the kind of deal I’m talking about…
And if you buy right using my strategies and templates you’d also perhaps get the property for a lower price, increasing the yield.
You might also choose one that has some upside which can increase your equity more quickly…
One of my young friends admitted recently to spending $800 in his business in an attempt to save $200…
It wasn’t until later that he realised the madness of what he was doing.
I see the same thing with people who want to spend $600,000 to a Million on a commercial property, but they can’t see the sense in investing a few grand to learn how to do it properly, saving themselves probably many many thousands in the process…
…and potentially increasing their cash flow and equity by the hundreds of thousands in the process.
The madness is that people will tend to do so much more to not lose a $1 than they ever will to make a $1.
The fear of being ripped off ends up causing many people to rip themselves off much more than anyone else ever could.
And the big authority real estate websites and their flimsy, irrelevant information is out there deliberately providing unusable information without realising that there are people trying to put that info to use.
Ok, so I’m on a bit of a rant today, as you can see. But if you’ve ever been the bearer of information that can seriously help people and you see people making costly (and possibly devastating) mistakes that could be avoided…
Well… It’s upsetting.
I invite you to consider where you might have shortchanged yourself because of the fear of being ripped off, and where you have successfully invested in yourself and it’s paid off more than you could have imagined was possible…
“…Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.”