This article will produce a lot of controversy.
Oh well, here goes…
Many investors that I meet have a high degree of unrealistic expectations.
For example. I spoke with a guy that wants a property to cash flow $5,000 per month NET in his pocket after all expenses and loan payment, but, he only wants to invest about $100,000.
For those of you with quick math that is a 60% return, just on cash in one year.
Folks, this animal is NOT out there. When you find it please tell me. When you walk into a real estate investors office and find a skeleton with a phone up to its skull it is the investor that spent his time looking for this kind of property.
Bottom line is, why would someone sell you a property that is producing a 60% return??
Not going to happen.
Am I saying settle for LOW returns… NO. Am I saying that there are not any great deals out there… Of course not.
What I am saying is you get what you pay for. When you invest $100,000 you can get a great return commensurate with that amount of investment and great tax savings. Not a miracle.
Step 1. Make sure your expectations area realistic….If not go to step 2.
Step 2. Wait.
Where Are The Best Apartment And Commercial Property Deals Found?
Oddly enough, most great deals DO NOT come from:
1) Foreclosures, Bank Repos and Desperate Sellers.
Now, I did not say that you would NOT find good deals here, but in reality in the commercial investment real estate world there just are NOT many in this category.
Fortunately for us we can depend on:
1) Dumb Realtors
2) Dumb Owners
3) Dumb Managers.
Over the last 18 years this is where I have found the best deals. Why? The above folks (and I am in all three categories by the way) can easily become complacent, lazy, or even busy with other things. The thing that suffers is the apartment or commercial property.
This spells opportunity.
Next week, I will share with you my favorite story of how you can profit from this. For now, make a mental note on the areas to look for the best properties.