Greetings from Albuquerque, New Mexico!
One of the biggest lessons most real estate investors learn early on is that the people to learn from are those with real experience. Many ‘new’ investors start with books and ‘boot camps’ and in some cases, that works well with residential investing. But with commercial real estate, the stakes are much bigger and the learning curve is much steeper. But, as you probably already know, the ‘gurus’ don’t tell you that. If a ‘guru’ warned you of the risk, chances are sales would go down.
When learning from a ‘guru,’ most people are sold on the sales pitch and don’t do their research. The result is most new investors learn to invest from a salesman that has limited experience with commercial real estate. The result can sometimes be devastating. Even more risky is learning from gurus who are using other people’s experiences and successes as their own to sell their program. Yes, this happens a lot more than we think.
Now, not all commercial real estate programs or mentorships are evil. On the contrary, there are a couple out there that deserve some recognition. But for the majority of commercial real estate investing programs out in the marketplace, you are throwing away your money.
So, here are some tips on how to get started on your own. That is right, how to get started without a flashy package and a smooth talking guru:
1) Keep your money for now. Thinking about spending 2K, 5K, 10K on a good looking”how to invest in ……” package where the marketing says “20K in value, but for a limited time only $4,999.00 you can have the plan to wealth and my personal phone number.” When you hear that, tighten up, have a cup of joe, and remember my words here ‘KEEP YOUR MONEY.’
2) Buy a good book on commercial real estate. Don’t buy a book from a “guru” where all the information in the book is to push you to a boot camp. Now, there are good books out there that are trying to sell you something, but they give you a lot of value too. One of my favorites is Investing in Commercial Real Estate for Dummies by Harris and Conti. A great book in explaining the basics. Another of my favorites but will bore you to tears is The Handbook of Commercial Real Estate Investing by John McHan. The importance of reading up on commercial real estate is to see if you even have a true interest. If the books above get you excited, you may have commercial real estate in your blood.
3) Take a Real Estate Licensing class. (If in Albuquerque, New Mexico, I recommend Kaplan.) The licensing class does not mean you have to get a license. It is a good course to get you familiar with the laws, codes, etc., in your area for not only real estate but property management as well. I learned a lot in my licensing class. More than I thought I would. But I also learned that one of my instructors had no clue about commercial real estate, just residential :-)
4) Take the Certified Commercial Investment Member (CCIM) courses (www.ccim.com). If there is a boot camp a new investor should attend, this is it. Yes, it is somewhat expensive, time consuming and difficult but well worth the effort. It is like drinking from a fire hydrant and there is a test at the end of each section (it is not a cake walk either). There are four classes and each class lasts five days. But, if commercial investing is where you want to be, this is the course you want to take. This will help you analyze projects at depths you had no idea existed. You will also learn how to do demographic studies, leases, etc. Plus the networking at these courses are invaluable. When you finish all the courses, you will have an opportunity to get certifed but you will have to meet some strict and demanding guidelines just to qualify to take the final test. But, I digress.
5) Build your network of commercial real estate investors and professionals. Find someone in your local area that is successful at doing what you want to be doing and follow their lead (also known as modeling). This is by far the best advice I can give you. If you have a great interest in commercial real estate, finding someone who is a success at it is the best thing you can do for yourself. This may take some time and it is uncomfortable at first….but well worth it. Chances are this person/mentor will be a real estate agent/broker/CCIM investor.
If you do all the above and still want to go to a smooth talking guru, by all means. But, I definitely went full circle starting out with gurus and ending up with the “right way.” Real experience from real investor is by far the best way to find success in commercial real estate.
Until next time, rob