It Is Easier to Purchase Commercial Real Estate Than It Is to Purchase a Home

Cash flowing commercial property can produce a significant passive income and increase your net worth, thereby, allowing you to be able to do the things you want, when you want, whether that’s to become your own boss, pay off debt, put your kid (or yourself) through college, retire comfortably, go on luxury vacations, or buy that brand-new pacific blue Lexus you’ve been looking at.

There’s a myth out there, that to invest in commercial real estate, you need tons of your own money, and perfect credit. But whether or not you have those things is not the real problem. . . .

The real problem is:

• You don’t know the steps to take.
• You don’t have the information you need, and
• You don’t have a way to get that information from an expert without paying 10s of thousands of $$$ to get it.  

That’s what stops you from investing. You’re scared. You are afraid. You’re worried you’re going to make a mistake. I understand; I used to feel that way too.

But I discovered the Truth, and there are simple, learnable steps that can help you become successful investing in commercial real estate.

So, allow me to debunk that myth that you need lots of your own money and perfect credit. No, you don’t. When you know how to find the right cash flowing property, it becomes easier to buy commercial real estate than it is to buy a house. And the reason is, the property’s NOI.

NOI is Net Operating Income. It’s how much money a property makes, after all expenses. It’s the money from all the rents from the tenants, whether it’s an apartment building, an office building, or self-storage building. . . minus all the expenses, such as property tax, utilities, repairs and maintenance, and insurance. And it will cover the property manager, so you don’t have to do the work. We’ll also subtract the money needed to make the loan payments. Then, and this is the best part, all the money left over goes right into your bank account each and every month.

The lender looks at the NOI. If they know the property is making enough to pay their loan payment, along with the other expenses, then the lender is going to give you the loan you want. You see? The lender is looking primarily at the property’s Net Operating Income. Not you. With commercial loans, you are not the primary source of repayment. This is why it is easier to buy commercial real estate than it is to buy a home.

Because we all know with a home loan, it’s your money, your credit, and your debt ratios, and your take-home pay from your JOB. But with commercial, it’s the property’s NOI.

Learning the steps to confidently invest in commercial real estate is the great equalizer! 

It does not matter who you are: your age, gender, race, religion, citizenship, employment status, if you’re married, single, starting with lots of money, or just a little.

When you know how to find a great NOI deal, you are on your way to becoming financially free as a commercial real estate investor!

With my help, one of my mentee’s, JD, who was only twenty-four years old (hadn’t ever bought a home and was out of work), bought a nine-unit apartment building that put over $1,773 into his bank account every month. He did not have a current paycheck. If he wanted to buy a house, he wouldn’t have been able to because he had no take-home pay, but he could use this property’s NOI as leverage to buy one.

When you get a loan for a house, the lender determines the ratio of the principal, interest, taxes, and insurance divided by your take-home pay. Guess what? He didn’t have any take-home pay; therefore, he could not have bought a house. True? Absolutely! But he could buy the apartment because of the NOI. There’s your answer of how this all works. I hope that this short illustration of a real case study helps you. We’ll get deeper into NOI and other financial numbers in a future blog post: Key Financial Ratios for Evaluating Income Properties.

My Confident Commercial Real Estate Investor Self-Study Course is written for people like YOU—people who are curious about how to invest in commercial real estate and how commercial real estate owners make money. It’s for YOU-if you are intrigued about commercial real estate, but who are a bit apprehensive because of tyour lack of knowledge about what commercial real estate is, how it works, and what’s involved.

Let’s get started: