First step to property investing 101

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Using the MLS multiple listing service , these agents can set up automatic emails that will reach your inbox any time a new or reduced property hits the market. Warning — move fast on these deals like this minute, not hours or days! Everyone else is doing this campaign, too. Talk to friends and family, but also reach out to professional contacts like your CPA, attorney, financial advisers, real estate agents, property managers, etc.

Get business cards and print flyers with your investment criteria so that people remember you. Drive or Walk For Dollars — Regularly walk or drive your target neighborhoods. Call numbers on signs to talk to owners or agents when possible.

For vacant properties, talk to the neighbors when possible to try to get in touch with the owner. Also, write down the vacant house address, and later look up the owner contact information. You can find the mailing address using your local online tax assessor records, and you can sometimes find phone numbers using whitepages.

You can either call or send them a letter in the mail to ask about buying their house. Wholesalers typically buy or control deals, and then quickly sell them for a small markup to other investors like you. Talk to these wholesalers, get on their mailing lists, and be proactive with them.

A bird dog is similar, but he or she simply sends you leads. You then get to follow-up to turn the lead into a deal. The bird dog will likely need to have a real estate license in order for you to legally pay them a finders fee. Cold Calls — For those who can handle 50 rejections for every 1 promising phone call, this could be an effective method. You can search the online classifieds or local paper to find for sale by owner and for rent by owner listings.

Then just call listings one by one and ask questions. Few people will do this, so you may find some gems that others pass up. Classified Ads — You can advertise your service buying real estate through free or low costs classified ads online or in local print publications.

Finding these lists is sometimes as easy as paying a list company list company or local service. Most importantly make it easy for people to contact you. I did it for years when I started my business, and I bought at least 1 property per year because of it.

So, it will work if you choose to do it. Signs are an inexpensive and effective way to generate leads. Advertising — Use online ads like Google Adwords, traditional advertising like newspapers, magazines, and community bulletins, and even radio advertising talk radio is best.

I bought properties from both print and radio advertising for years. But these are effective options that will give you some choices to start with. So, decide a rough marketing budget and choose one or two marketing campaigns you will start with. Then move on to Step 9 to schedule and prioritize your next actions.

But the point of this real estate investing article is to help you get started as quickly as possible. So, the point of Step 9 is to help you transfer all of this information into organized, effective action right away. Schedule Your Time You know your life and your schedule better than I do. Be realistic. But if getting started with real estate investing is important to you, also be ruthless with your priorities.

So, how much time can you carve out? Based on my prior experience helping other investors one-on-one, you need at least 10 hours per week in order to give yourself a minimal chance of success. But the more time you can commit, like hours, the more you will increase your chances.

Now look at your calendar and block out specific times to work on real estate each week. For example, if you plan to do real estate before your job each day and on Saturday mornings, schedule it so that nothing else gets in the way. This is like a work or doctor appointment. It must be scheduled in order to be a priority. This means you need to spend your time only doing the actions that will move you forward towards your goals.

The important habit for me has been to break big goals and projects down into small, bite-sized actions that I can do and check off a list. Projects are anything that requires more than one step to accomplish. Identify Next Actions: Write down the next two or three actions that you must do in order to move forward on the projects you just wrote down.

Do Your Next Actions: Nice and simple, right? Just do what you wrote down during your next time block or even better do it right now! Identify Next Actions Again : This process just keeps going and going. You continue finding more next actions until a project is done. Then you move to the next project, and the next, and the next. What happens when you finish your all your projects?

You accomplish your goals, of course! And what next? As I shared in the beginning, my goal was to save you frustration and time as someone getting started or restarted with real estate investing. As you may know, too much information can sometimes work against you as a newbie. So, I hope the action steps in this article will give you a framework to get started quickly. And if you get started and keep moving, you can avoid overwhelm and move past those other pesky beginner challenges like analysis paralysis.

But as you know, these steps are only the beginning. Many residential investors get their start in commercial properties by expanding into larger multifamily properties. Residential tenants tend to have shorter lease terms than office and retail tenants, so tenant turnover is a factor that should be considered.

Special Purpose In general, special purpose properties are designed for a specific use, so much so that it would be difficult to repurpose the property for another use. Car washes, self-storage facilities, and schools are all examples of special-purpose properties.

The leisure and tourism industries represent a large proportion of special purpose real estate as well. Common examples within the industry include hotels, airports and sports stadiums, and amusement parks. Mixed-use development properties are also prevalent in the commercial real estate sector and continue to grow in demand. These properties represent different uses, such as residential, retail, and even the public sector.

A mixed-use building could have shopping and services on the first floor with apartment units on the upper floors. Read our guide to mixed-use developments to find out why they have become so popular in recent years. Owner-occupied commercial real estate OOCRE is when investors purchase commercial real estate to utilize the building for their own purposes. This strategy can be applied to any of the five commercial real estate types discussed above.

The option to occupy the commercial real estate you invest in is just one of the many benefits of commercial investing. Keep reading to find out some of the other benefits that may pique your interest. For many, the objective of investing in commercial real estate is for future wealth and security; others utilize it for tax benefits and investment portfolio diversification. A commercial redeveloper can also take advantage of the following benefits: Higher Income: The hallmark benefit of investing in commercial real estate is a higher potential income.

Generally speaking, commercial properties have a better return on investment, an average of six to twelve percent, while single-family properties fetch between one and four percent. Secondly, commercial real estate provides a lower vacancy risk, as properties tend to have more available units. Also, commercial leases are generally longer than those you will find in residential real estate.

This means that commercial real estate owners have to deal with far less tenant turnover. Cash Flow: Commercial real estate has one very distinct advantage: a relatively consistent stream of income due to longer lease periods. In addition, commercial properties often have more units than residential properties, which means you can achieve economies of scale and multiply your income streams much more quickly. Less Competition: Another advantage associated with commercial real estate is relatively less competition.

Because of the perceived difficulty of commercial investing, the commercial space tends to be less saturated with other investors. Longer Leases: Perhaps one of the biggest perks of commercial real estate is the attractive leasing contracts. Commercial buildings generally have longer lease agreements with tenants compared to residential properties, which, as previously stated, offer investors impressive returns and significant monthly cash flow.

In many cases, lease agreements for commercial properties are signed for multiple years. Business Relationships: The world of commercial real estate offers investors the unique opportunity to participate in business-to-business relationships. This can lead to more professional, neighborly interactions with your tenants when compared to residential real estate. In some cases, you may even be able to build relationships with the business owners renting in your building.

This can be great for expanding your network and getting involved in the community you are investing in. Limited Operational Hours: One of the lesser-known perks of operating commercial real estate is that, for the most part, you share working hours with your tenants. Many commercial investors who choose to manage their own properties enjoy this benefit, as it helps allow for a sense of separation between property ownership and regular life.

Commercial real estate investing offers investors an array of opportunities and advantages that other investment strategies do not. Once the benefits of commercial real estate investing are recognized, the next step is to dive in. Read the following to receive tips on how to get started in commercial real estate.

Learn how to get started in real estate investing by attending our FREE online real estate class. Besides learning the ins and outs of commercial investing, make sure you understand the commercial real estate market and how it can differ from the residential real estate market. Understand How Commercial Real Estate Is Different The first step as a commercial investor is understanding that commercial real estate is valued differently from residential properties.

Unlike residential real estate, the income from commercial real estate is typically related to usable square footage. Also, commercial property leases typically last longer than residential leases. These two factors help illustrate why a commercial real estate investor has a better potential to earn a higher income.

Make sure you understand the risks and rewards of commercial real estate investing. Location is an important factor regardless of your investing niche, with commercial investing as no exception. However, commercial investors also need to pay close attention to their tenant type. The location and intended tenant type are two factors that intersect closely when determining demand. For example, a space intended for corporate offices will likely perform better in an urban center than a primarily residential neighborhood.

Analyzing recent comparables can provide you with a better clue of how your property of interest might perform. Analyze Comparables The next step is to analyze comparables in the area and research future developments. Analyzing comps will help you determine the current market value of a property. When determining comps, a general rule of thumb is to choose a property where the square footage does not go beyond 10 percent higher or lower than that of the property being evaluated.

This will allow for the most accurate comparables possible. Read more on tips for pulling the most accurate comparable sales.