December 12, 2015
There are commercial property investors, especially those just getting into commercial property investing, who do not treat commercial property investments as a serious business. This can have dire financial consequences.
As Director of Marketing for Business Loan Store, and Apartment Loan Store, I have received many calls over time in which potential commercial property investors have thought that to buy a commercial property, you just simply and quickly select a commercial property, pay very little money to get it, and then sit back and make a lot of money.
They did not realize the following:
- Commercial property investment is a serious business. Just like running a restaurant, accounting firm, or furniture store, there are many parts to running the business of commercial property investment. These parts of the business are detailed, and complex.
- Many businesses fail – not just restaurants, accounting firms, furniture stores, or businesses at your local shopping mall, but also businesses involving investment of commercial property.
- There are big knowledge requirements to learn how to run a business of investing in commercial property, just as in other businesses. And to become proficient in commercial property investing takes years, just like in other businesses. This knowledge is largely gained through years of commercial property ownership experience tightly woven with proper mentoring.
- This proper mentoring means that as a commercial property investor, you select the best mentors you can find for the various aspects of the business. These need to be mentors who have succeeded financially in the business for a period of years.
- Yes, this even includes mentoring in property management. “But,” you might say, “I can pick a property manager to run my property, and all is well.” Not so. You need to know enough about property management to be able to manage your property manager. Why?
- There are property managers who become lazy in running their property management business, and they do not keep a tight eye on property condition, tenant quality, and property finances. We have had many bad stories of investors who have lost their property due to poor property managers.
- There have been instances of property managers who steal money from the property investors. Your ability to manage your property manager no matter how good you think they are, or how highly rated they are, is essential.
- There is a lot to learn in the selection of a good commercial property – value, quality of property, quality of tenants, knowledge of the neighborhood, etc.
- There is a lot to learn about how to choose a good mortgage broker. You can look at past articles on this website to find guidance in this.
- There is a lot to know how to manage your money in commercial property investment. Anything from how much money you need to have to invest, to when to buy and when to sell. And there are many other aspects of running the business of commercial property investment.
If you are going to get into the business of commercial property investment, be sure to look at it as a serious business. Get mentoring from knowledgeable and successful mentors who can teach you the various aspects of the commercial property investment business – mentors who have been successful in this business. And finding a mentor who will hold your hand through the process, especially early in the business, could be a big help.
Contact us to see if you pre-qualify for our best multifamily, commercial, bridge, construction, or business loan rates and terms. Also, contact us if you would like to discuss your particular commercial lending needs, or if you have any questions. Call 214-695-7310, or send an email to firstname.lastname@example.org
To discover more about our loan products as well as rates and terms, please visit our loan programs page.
Bruce Painter, Director of Marketing, Business Loan Store