Brian Fielding Shares 5 Pieces of Advice for Those Wanting to Invest in Commercial Real Estate
Commercial real estate can bring in big returns, but it can also cause huge losses. The difference between the two is having the knowledge and the experience to make a good investment. While not everyone has 40 years of experience like Brian Fielding of Fielding Investments does, they can follow his advice with these five tips for commercial real estate success.
Don’t limit oneself to residential offerings.
There is a whole world of commercial real estate investment opportunities that are not simply homes or apartments. From office space to industrial hangars to mobile home parks and retail buildings and beyond, commercial real estate is a varied industry with so much to offer. If an investor does not have experience in these areas of the industry, it is prudent to partner up with someone or find a mentor who does.
Build relationships in the community.
Having good relationships and a foundation of well-placed connections are important assets in the commercial real estate world shares Brian Fielding of Fielding Investments. Having lots of contacts means having lots of potential partners who can complement an investor’s talents and possibly help finance their ventures.
Have a source to get questions answered. When an individual is starting out in commercial real estate, they are likely to have many questions. Without the proper source of knowledge, they can make mistakes that would otherwise be easily avoided. The evaluation of properties, the types of calculations that need to be made and more are important parts of a successful commercial real estate venture that hinges upon having the correct information. Similarly, a prudent investor should have a good attorney and insurance broker and have access to individuals with expertise in the various elements of construction.
Having a partner is sometimes key.
Having a partner in the commercial real estate industry can oftentimes be a great advantage shares Brian Fielding of Fielding Investments. It is unlikely that one person will have all of the money and expertise necessary to evaluate and purchase certain assets. Investors should be prepared to share in both their success and exposure. Doing so might limit the return on one outstanding investment, but success usually breeds success and partners (as well as those that want to be) will take notice of the individual’s activities and be eager to join with them in future investments.
Understand the math.
There are specific measures that quantify one’s return on an investment in commercial real estate. Not only will knowledge of formulae such as ROI, Cap Rate, and IRR help the investor to better understand the value of a prospective purchase, but these terms will be important to all commercial lenders. Spend the time to learn the terminology of the industry, as it will help establish credibility with sellers, brokers, lenders and other professionals who could be important factors in the success or failure of a venture.
For more information about the commercial real estate industry, or for answers to some of the most common questions that people ask about commercial real estate, visit http://brianfielding.org.