Commercial Capital World

From the blog

Making Money As A New Commercial Real Estate Investor

 

 

Making money through commercial real estate might sound like something only for the highly educated and people particularly knowledgeable on the subject. In reality, investing in commercial real estate is something that with a little research and a little money, just about anyone can do.

While many people have heard of or seen the many TV shows focused on fixing and flipping old houses for profit, that’s not the only way to make a solid return as a real estate investor. That’s not even the only method concerning single family homes!

For example, have you ever thought about wholesaling single family homes? This is a popular option for first time or novice investors. Simply scout your local housing market, find great deals on homes, put those homes under contract, and then sell those contracts to an investor for a fee. These finder’s fees provide you with great returns on what seems like almost no work at all.

Another form of wholesaling, if you have the budget, is wholesaling small or large apartment buildings.  Many investors can make a comfortable and easily livable salary by wholesaling 1 or 2 apartment buildings a year. This process is extremely similar to wholesaling single family homes but with more money on the line. While the initial investment might be higher, the finder’s fees are much higher too.

Another method is the Buy-N-Hold method. Like wholesaling, this form of commercial real estate investment can be done with homes or apartment buildings. With this method, you buy the property, hold onto it for 20+ years, pay the mortgage, and then live off the cash flow in retirement. It is done at a much smaller scale at the level of single family homes, with more money being involved should you decide to use this method on an apartment complex.

You can also combine the fix-and-flip method with the Buy-N-Hold method. Doing this gets you the maximum return on investment while dramatically reducing your risk as an investor. Start by getting a great deal on a house during a low-market period. Then you flip and improve the house to greatly increase its value on that side but you might not immediately flip it for profit. The “holding” part of the investment comes in because you might hold on to the house for a number years waiting for the market to improve. Waiting for the market to peak before selling your remodeled home you bought during a low-point in the market will give you great returns.

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