WHAT DOES IT TAKE TO GET OUR FOOT IN THE DOOR?

Question

My fiancé and I are both new to real estate. We’re honestly still in a research phase. I am more interested in wholesale but he has expressed an interest in commercial real estate. I’d just like to know how one gets into the business? Is commercial real estate something you have to work up to? Meaning, you start small, in a different area of real estate and finally after 10 years you can test the commercial real estate waters? Or can you get your license and come out the door swinging in this field?

Jonathan Taylor Smith · Answer

Account Closed - You can really start just about anywhere in Real Estate - so it is really more of a personality / risk tolerance question. I ultimately want to own large apartment complexes; however, my personality / risk tolerance made me (and my wife) more comfortable starting with single-family rentals, and then bumping up to small multi-family properties - BEFORE trying to go big. But I've met some people who started with a 100+ unit complex as their very first purchase. Now also a factor is your cash / capital and connections - so you get in where you fit in. Good Luck!

Spencer Gray · Answer

In addition to being a wholesaler you could work as a broker/leasing agent for a commercial real estate shop. This requires some sort of licensing depending on your state and typically is paid based on commission. Many shops don't necessarily require a ton of experience but a strong work ethic and ability to learn. You'll start by assisting other brokers, doing research, analysis, etc. Honestly wholesaling and commercial brokering wouldn't be a bad combination other than that your income is solely based on your ability to produce.

If you build a track record of wholesaling and hustling I think you could present yourself as a good candidate to the right group.

Stephen L. · Answer

Great Question! At the end of the day, success in Real Estate comes down to understanding relationships.

1) Your relationship with yourself, which means understanding your goals, strengths/weaknesses, and desired life balance.

2) Your relationship with other professionals. How well are you networked in your desired niches? If interested in wholesale have you built relationships with agents, brokers, and others interested in real estate investing? If commercial, have you networked and built relationships with property managers, commercial brokers, and other commercial RE investors?

3) Your relationships with tenants/clients. Being able to care for and meet the needs of your tenants/clients will ensure a long profitable relationship. Are you connected with other investors to know what kind of deals they're looking for so you know what to be looking for when wholesaling?

At the end of the day, you won't know how to invest in real estate until you invest in real estate. So it's important to start somewhere, learn everything you can from that first deal, and then buckle up and move into the next. Just my thoughts. Best of luck and keep us posted.

Alina Trigub · Answer

Account Closed

A lot of good advice here already. I suggest in addition to educating yourself in RE field, to also work on your mindset education. A lot of it depends how you see each situation and the world in general. Hence, expanding your mindset can do wonders as well (overtime). You don't have to start small, so it is really up to you where you begin your journey and how strong your "Why" is!

Here're a couple of posts to guide you further: https://www.biggerpockets.com/blog/7-barriers-to-entry-commercial-real-estate-investinghttps://www.biggerpockets.com/member-blogs/10850/85351-nothing-will-work-until-you-do-maya-angelou

Stephen L. · Answer

Account Closed, For what it's worth we started with renting single family homes. We got two deals in 60 days and then about 3 months after that we partnered with a colleague on a commercial self-storage deal to break into the commercial space. In our market, a SFH provided the lowest barrier to entry and we used that deal to build confidence, and develop our negotiating, marketing, management, and networking skills. Each of these skillsets became sharper tools in our tool box to take on other things.

Therefore, I would look to see where the lowest barrier to entry is in your market and start there to build the foundational skill sets and confidence needed to take down different and more complex deals. The people you will meet during that first deal: Agents, inspectors, appraisers, attorneys, contractors, and property managers can all become apart of your RE network and perhaps help you break into other areas.

Matthew Irish-Jones · Answer

Account Closed what do you mean by getting into commercial RE?  If you are an investor you don't need a license, just the cash and a lender.  You can come out swinging and buy commercial RE right out of the bat.

If you are talking about as an agent... you can come out swinging again LOL but, you will probably need a buyer.  Unless its a friend or family member most commercial investors will not give a commercial listing to a newbie...

I personally got into commercial RE investing after years of residential investing.  I found a nice little niche with mixes use buildings.  The residential units balances the risk, and we buy in areas we believe we can get business's to come.  We also offer other services to attract them that not all commercial owners will do.

Ronan Donnelly · Answer

Hi Account Closed, do a self assessment to figure out what your areas of strength are and them match them to a specific real estate strategy and asset class and then go deep on that area. Also map out your other limiting factors like time and money available, location etc. All of this should help you to narrow down your choices and to get the focus required to succeed. There are no right or wrong answers. Good luck!

Account Closed · Answer

@Stephen L. Besides REIA meetings, are there any other places you’d recommend for connecting with the REI community?

Account Closed · Answer

@Spencer Gray thanks for the advice, I’ll definitely look into that!

Account Closed · Answer

@Ronan Donnelly @Jonathan Taylor Smith Thank you both! Sounds like we’ve got some analyzing to do

WHAT DOES IT TAKE TO GET OUR FOOT IN THE DOOR?

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