There are a lot of factors to consider when looking for a good deal than finding the perfect location.
In this episode, Shane reiterates the importance of following your business model and what factors to focus on when deciding to invest. He stresses the importance of having the right team members and how due diligence could save you a real estate investment flop.
[00:01 - 10:19] Become a Successful Real Estate Investor
To make money in real estate, you need to find good deals. Some investors are good at finding deals, while others are good at raising capital. Focus on what you can do at the moment and find a mentor who will show you the ropes and learn through experience.
Here are five guide questions when finding a potential deal:
- Who's the neighbor?
- What's the zoning?
- What's the land use?
- What's the play here?
- How much money do we need?
- What are the rents? When do they expire?
[10:20 - 21:10] How to Respond to a New Opportunity
When you find a deal but you or your team is inexperienced with it, best to let it go and find more opportunities. Stick to your business model that's proven to work instead of trying out new things every time.
[21:11 - 39:12] Mitigate Risk by Having the Right People in Your Team
The deal, the team, and the market are the three moving pieces in a market cycle. As a retail investor looking to invest in development, you may meet the three, but having the right team makes or breaks a deal. Your team members must know the deal from the insider and outsider perspectives. This minimizes risks and helps you determine if it is indeed a good deal apart from what's being presented.
Do your due diligence and talk to the banks and lenders to know the numbers. Understand the numbers from your own research, know the market demand, and have the best sales and marketing team could help you get started correctly.
[39:13 - 41:42] Closing Segment
If you are interested in my coaching and consulting program, please email me at [email protected]. I want to make sure to cater to those interested, so please use the word “coaching” on the body or subject line.
You can also follow me on Linkedin and Twitter. 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:
“If you know how to find a good deal, we'll find the money. ” - Shane Melanson
“You have to be empowered in the sense that you got to really know the people you're investing with and what they're doing, what their plan is. Do you know why? Because if they don't execute, do they have mitigation? How are they mitigating for certain things, and have they already mitigated for them in advance? What happens if this and this happen? What are you going to do in response? How quickly they answer that question will tell you whether or not they actually have a plan, or they've thought about it, right?” - Shane Melanson
