If you are a current investor or one who has always wanted to get started then now is the ideal time to get started. The good news is while 98% of investors are running after single family homes there are less than 2% of investors going after the real money. The easy and real money is in commercial real estate.
The common belief is that you have to have a large network and lots of cash to get into commercial real estate. Nearly everyone who has bought commercial real estate who didn’t come from money has stumbled upon it or been shown the ropes on how to do it from those who already have it.
I managed to get an interview with one of the top real estate coaches in commercial real estate to find out more about it. Austin Davis is known in commercial real estate circles for being one of the top investors who came from nothing and his holdings over the past 30-40 years have grown alot. Using very little of his own money and keeping his assets well protected through multiple trusts, corporations and leaving pretty much nothing in his own name.
When I asked him about how hard it is to get started he replied, “It’s much easier to get started in commercial than it is in residential since the property and funding for it is based on the ability of the property to generate income and not you personally it is a lot easier to get started. You simply don’t have to have a lot of net worth. The only real obstacle is knowing how you get the door open and yoru foot in. After you get your first deal and can show lenders you have property - it’s much easier to get funding for the new deals you find with little cash out of pocket.”
I was very curious about this and so I started looking into it. I found that there are really few books or programs or coaches in the commercial property industry to give any insight on how to get started. I asked Austin about this and he replied “While many of the more public real estate investors are known for investing with little down in commercial real estate - they don’t really share it with people because honestly most investor’s in this niche don’t want more people getting into it. There is a very real fear it could hurt the industry if some how a lot of new people go in to this industry and make no mistake about it the old money does not want to share the pie.” This of course makes since and yet I was curious how income, job, credit and assets would play into commercial real estate.
Austin replied “All of that stuff doesn’t matter a lot while investors, banks and lenders are going to look at that what they really are looking for and wanting is to see you have skin in the game.” I have heard many times myself about this and understood why. If a lot of newbie’s have nothing in a deal and the investor has all of their money in it that adds to their risk. I wanted to know more and during our discussion Austin told me “Once you learn how to get large cash down payments in escrow the investor or bank will almost always fund the deal if it cash flows. The kicker is when you find the ones who don’t care where the down payment comes from. Many investors and banks will want you to put the money down out of your own pocket or to put a lien on other property you own. Those are the bankers and conservative lenders. There are many lenders who just want their equity protected and are alright with the down payment coming from hard money or private lenders. they don’t really care. They will of course only lend on strong property with strong cash flow that supports all the debt payments.”
I asked Austin how I could learn more about this and he actually has a very easy program, it’s very short and to the point and explained the process and he even did all my home work for me in it with vendor contacts! You can check out his program as well at http://www.CREprogram.com/austin
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