Welcome to today's episode, where we will be discussing how entrepreneurs and professionals can earn good money and create significant wealth through investing in commercial real estate. Throughout this episode, our speaker emphasizes the importance of understanding one's priorities and resources when investing. Identifying whether you are an active or passive investor is critical so you can create a clear path from point A to point B in achieving your investment goals. Whether you're new to commercial real estate or an experienced investor looking to enhance your portfolio, this conversation provides valuable insights into creating a successful investment strategy. So tune in now to learn how to start investing in commercial real estate and take the necessary steps toward creating long-term financial stability!
Highlights:
[00:00 - 06:01] Learning how to create a one-page commercial real estate plan
• Club syndications offer opportunities for wealth creation in commercial real estate
• The one-page commercial real estate plan to define goals and a roadmap for achieving them
• Determining the investor type and asset class for investment
• Private real estate syndications are the focus of discussion
• Successful investors continually adapt and diversify their portfolio
[06:01 - 11:43] Key Concepts and Mistakes to Avoid
• Flexibility is key in designing a plan for commercial real estate investment
• Biggest mistakes for new investors include targeting too many properties, buying on price instead of value, and not understanding the market
• Quality of thinking leads to quality of decisions, actions, and results
• Commercial real estate investing roadmap includes foundation, property selection, debt/capital raising, implementation/optimization
• Three big buckets for investing: making money, growing money, keeping money
[11:44 - 17:19] Setting Goals and Expectations for Investing Success
• Financial goals and examples shared by people
• Starting point: list assets and liabilities, personal net worth, burn rate
• Investing expectations: realistic vs speculative returns
• FU calculator tool to calculate time, capital, and returns for retirement
• Reverse engineering goals based on clarity and obstacles
• Identifying resources, time, capital, knowledge, strengths, and weaknesses
[17:19 - 23:10] Tips for Identifying Your Investing Philosophy and Strategy
• Identifying resources: time, capital, knowledge, and relationships which are factors to consider in investing
• Prioritizing resources based on the scale of expertise
• Determining if you are an active or passive investor and if you will be solo or if you will raise capital
• How to have a clear investment philosophy, focusing on high-growth markets with more demand than supply
• Non-negotiables in decision making, including property functionality, leverage, cash flow potential, buying/building below replacement cost, and control
• Investing has a reasonable expectation of positive return, while speculating has highly uncertain outcomes.
[23:10 - 27:13] Learning the Language of Commercial Real Estate and Creating a Winning Investment Plan
• Betting on rising values in commercial real estate investing
• Understanding key terms (NOI, cap rate, DCR, DCRS) for better conversations with brokers, lenders, and sellers
• Creating a one-page plan: investor type, asset class, location, deal structure
• Framework for achieving the plan: goal, objective, strategy, priorities, actions
• Homework and tools
• Coaching opportunity for those interested in a deeper exploration of commercial real estate investing
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube.
If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate!
Get my book Club Syndication - How The Wealthy Invest Their Money
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Tweetable Quotes:
"The quality of your thinking is gonna lead to the quality of your decisions. The quality of your decisions will lead to the quality of your actions and that will lead to the quality of your results." - Shane Melanson
"Goal, objective, strategy, priorities, actions." - Shane Melanson