20 Jul CREPN #101 – How to Transition from Single Family Rentals to Commercial Real Estate with Robert Creamer
How do you transition from investing in Single Family Rentals to Commercial Real Estate? [x_audio_embed][/x_audio_embed] Most people recognize single family properties because they live in one. It’s recognizable and comfortable. The barrier to entry is low. Banks are willing to lend on the borrower’s credit score, job history and the property appraisal. Many investors start in single family residential, and never consider commercial real estate. While single family rentals is an investment strategy, the most significant increase in wealth consistently comes from investing in commercial real estate. For investors who are stuck in single family or just getting started, and possibly afraid of larger properties, here are the steps needed to get into commercial real estate.
The Steps to Transition
Get the KnowledgeYou need to make some connections with a few key professionals.
- A Commercial Lender who is willing to meet with you and help you determine the lending parameters they can lend on. It will be useful if you know the following terms:
- Net Operating Income; NOI
- Capitalization Rate; Cap Rate
- Cover Ratio
- Meet a Commercial Real Estate Broker who will help narrow your search to a property type, size and location that can meet your needs. The broker will help you understand the ins & outs of commercial real estate and figure out why you want to pursue an opportunity in commercial real estate.