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 great news is that 98% of people who are seeking to do this are chasing the residential single family home market and less than 2% are going after the real money. The big money and the easy 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. Almost everyone who now owns real estate in the commercial property industry who started with nothing was shown the ropes from those who already had done 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 do not have to have a large sum of cash. 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 made since to me and I wondered how credit, income, job status and assets would come into play on 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 had myself heard that before and it made since. After all if a bunch of newbie’s had nothing in a deal and the investor or bank had all of its money in a deal - that's a lot of risk. I asked Austin to expand on that and he explained "If you can get a large cash down payment put in escrow for the deal the bank or investor is very likely to give you funding if the deal cash flows well and they know a cash down payment is being put up on the deal. The challenge is finding the ones who are alright with your down payment coming from any source. 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 just dont honestly care. Of course they are not going to fund deals that do not cash flow and that can support 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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