cash flow, cash flow, cash flow, cash flow and cash flow.
People that get into investment real estate hear all the stories about NO MONEY DOWN. But the problem is, that you lose money every month. Rents are less then expenses.
My rule of thumb is that my PITI equals 50 percent (or less) of my gross monthly rent. The other 50% is NOT profit, but covers up keep and other expenses.
On all my properties I have a positive cash flow and a ROI of around 14% per year (before taxes and tax breaks).
What Are Your Top 5 Challenges In Investing In Commercial (or Residential) Real Estate?
Hi Guys,
I was hoping to possibly stir up some interesting conversation and get some honest feedback from everyone about our common topic of interest: investing (commercial or residential) real estate.
Regardless of the level of experience you have in real estate, what would you say your top 5 (or more) challenges are in real estate investing?
I would appreciate everyone else’s input on this when you get a chance.
Thank you in advance for all your feedback!
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5 comments - add yours
Real Estate Guy
May 13, 2009
Anonymous
May 13, 2009
I do creative real estate investing ( more specifically I’m a rent to own specialist ).
I find that the hardest thing is starting out and finding the right properties to invest in.
In lease purchasing, buyers are easy to find but finding a seller to rent to own thier home is tough.
The second hardest thing is marketing. 80% of my time is spent with marketing.
Ed Atun
May 13, 2009
. Commercial:
Most tenants are dreamers who now have their dream business.
Most tenants are using a lot of wishful thinking when planning their income for the year.
Most tenants do not have as much money in the bank as they really need to successfully operate a business.
The city and county and state all want taxes to be paid. They don’t care if i am going thru a bad time at work.
Commercial loans are a pain and they are unattractive.
Debra G
May 13, 2009
Tenants, City Government, Tenants, Code Enforcement, Tenants
@CommercialDeals
May 16, 2009
For most investors its Lack of Leads.
Seller Leads Leads, Buyer Leads, Tenant Leads, Private Source of Funding Leads,…but mostly Seller Leads (need a good deal to start with or else everything else is pointless and unforgiving)
They settle for substandard deals cause its the only ones they have to choose from. Their substandard marketing causes a substandard flow of substandard deals.
The Cure: Learn to market. Most real estate investors think theyre in the real estate business. Theyre not, theyre in the business of running a successful business, regardless of whether the by-product is Houses and Buildings or chocolate chip cookies. And as such, the mistake of failing to learn to manage the 2nd most important part of a (“Marketing”) leads to their grief and heartache.
CommercialRealEstateDeals.com
all the strategies and techniques and even the products are immaterial if the the marketing sucks. (sorry, just trying to make my point)
