The Investment Property Process

The Investment Property Process

If you’re looking to purchase an investment property, whether it be a residential single-family home or a commercial building, the purchasing process is very similar.  While there are some differences between the two processes, I thought they are close enough that I thought we should take a quick run through to get a discussion in place for future articles.

For discussion purposes, residential properties are single family homes, duplexes, triplexes, and quadplexes.  Commercial properties encompass everything else including retail, office and industrial buildings as well as multi-family projects of five units or more.

The investment purchase process for both residential and commercial properties looks like this:

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Investing is Risky. So is Life. Get over it.

Investing is Risky.  So is Life.  Get over it.

We spend our lives with risk.

There is everyday risk like driving to and from work, school, or some event with our spouse.  At any moment, we put ourselves on the road with other people who may or may not be in full control of themselves whether it be from alcohol, lack of sleep, or relationship induced stress.  Some of these people are just plain morons who should not be allowed to drive - but they're given a license anyway and we willingly chose to get on the road with them.

A collision could cost us financially from as little as a few hundred dollars to fix a ding to hundreds of thousands of dollars in medical bills.  However, we’ve learned to accept and manage this daily risk as we go about our lives.

There’s also the health risk we must accept just being part of the human experience.  Genetic health issues may cause elevated concerns throughout our life or they may show up in later years.  Poor food choices or bad exercise habits may not elevate our risk immediately, but sustained patterns will eventually result in some sort of health concern.  This is risk we either accept or ignore, but it’s there nonetheless.

People are killed every year by lighting.  People have been killed by an air-conditioner falling out of a building window.  Life is f'ing dangerous, at times.

Yet, even the riskiest adventurers as well as the experts in covert operations have learned to mitigate their risks.  They don’t jump out of planes without parachutes and they practice repeatedly so that an actual event becomes second nature.

We can’t escape risk so, therefore, we all must learn to deal with it.

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6 Real Ways to Build Long-Term Wealth

6 Real Ways to Build Long-Term Wealth

Becoming wealthy is not something that happens overnight. Sure, some people win the lottery or have a windfall of money from an unexpected inheritance, but you should not be holding your breath for something like that to happen to you.

Instead, to build real wealth, you need to think long-term. Rather than living lavishly, it’s important to adopt a lifestyle of disciplined saving and investing. These simple actions can help almost anybody grow a massive nest egg over time.

Here are six of my favorite ways to gradually grow real wealth.

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10 Things I'd Love to Tell Myself At Twenty-One

10 Things I'd Love to Tell Myself At Twenty-One

My girlfriend asked me, “What advice would you give my niece about investing in real estate?”

It was a loaded question that lead to several of follow-up queries.

What does she want to invest in?  Where does she want to invest?  How much money does she have?  What are her long-term goals?

My girlfriend rolled her eyes (she does this a lot) and quickly re-framed the question, “What advice would you give a twenty-one-year-old version of yourself?”

That gave me pause. 

“Good question,” I said, the wheels turning. 

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The Attack of the Side Hustle!

The Attack of the Side Hustle!

When I purchased my first commercial building, I was a property manager.  Therefore, it was natural for me to accept the same role for our investing group.  It dove-tailed nicely into my day-to-day routine.  I could field calls throughout the day for my own property as well as from the portfolio I managed.  Everything rolled together well.  It was a comfortable fit.

I didn’t know it was called a side hustle then, but I was creating a new stream of income (albeit small) and having fun while doing it.

Fast forward eight years and I’ve found myself in an uncomfortable situation.  I’ve grown my portfolio to fifteen properties with more on the way.  I’m now overwhelmed by the level of work I’ve created with the management duties.  The income created from this side hustle is nice, but it’s nowhere near the level I earn as a commercial real estate broker.  It’s not even an amount that I could subside on if I decided to solely do my side hustle.

Therefore, I was faced with a choice – continue to drown or seek immediate help.

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How I Bought My First $1.5M Commercial Building

How I Bought My First $1.5M Commercial Building

In late 2016, we bought a 10,135 square foot retail building in Deer Park, Washington.

At that point, it was the largest and most expensive building I’d been a part of acquiring.  Quite frankly, I was a bit scared that we could pull it off.  Up until then, the most expensive building I had purchased with partners was $390,000.  The building we were contemplating was almost four times that price.  It made my heart race considering it.

However, we believed the building to be well-built, positioned great and priced right.  That’s the trifecta when looking at a commercial project.

We made our offer on the building and then conducted our due diligence.  My investing partner and I believed in the project, but our partners thought the price needed to be a bit better.

Then we did what we previously thought unthinkable.

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What Does Your Broker Invest In?

What Does Your Broker Invest In?

I’m going to rant against some of those in the financial services industry.

You see, I’m a commercial real estate broker who loves the product he represents.  My clients can see and hear my enthusiasm when we talk about their needs, whether it be buying, selling, developing or leasing. 

A lot of my excitement stems from the fact that I own real estate.  I own various types of commercial property.  From small retail strip centers, a couple office buildings, a ground leased property and even a couple residential rentals.  I love real estate.

It’s one of the reasons I started Building-Income.  I wanted to share my excitement for the product.  I’m always looking to buy another piece of property.  It’s how I’m going to secure my retirement and leave a legacy for my family.

It’s one of the best investment vehicles out there and I wish everyone could feel the excitement I do.

However, there are some in my industry who don’t feel the same way.  They take their commissions and run.  They buy anything but real estate.  If they invest in anything, it’s the stock market or some other get rich quick scheme.

Now, I’m not against the stock market or investing in a business.  I’ve invested in both.  It’s just that I believe a real estate broker should practice what they preach and put their money where their mouth is.

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You Don't Buy Things With Money

You Don't Buy Things With Money

I was recently talking with a colleague who said he was close to retiring.  Gil (not his real name) is in his early fifties and slightly quirky.  He’s the type of guy who marches to the beat of his own drummer.  Although he works for a large, corporate-think company, he sports a long beard and tattoos.  He’ll freely talk about politics and other matters that most folks would shy away from.  With his wife, he lives in the country – far away from the hustle and bustle of society.

It had been a while since I talked with Gil so his mention of retirement was exciting.  I told him congratulations.  He said he was more than ten years ahead of what society had scheduled for his retirement, mostly because he’d been debt free, including his home, for many years.  He’s got a rental house which has some debt on it, but that payment is being covered by someone else.

I loved hearing he was free of consumer debt and asked him what led him to that point.  Almost everyone who is debt-free has a story about a moment of awakening to the soul crushing weight of financial liability.  Gil said he got himself into a position to retire, based upon some advice he was given when he was young.  Gil said once he fully grasped that concept, his life changed.

Being on a quest for knowledge that can help me grow, I immediately asked, “What was it?”

The advice, he said, was, “You don’t buy things with money, you buy them with time.”

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