Last month I talked about how the ease of credit will make owning an investment property, especially an apartment property a little more challenging. I should have probably done a better job of framing this article because, quite frankly many of our members started to panic.
I started to get phone calls, voicemails and emails with about 90% of them wondering if the bottom has fallen out of the real estate market and if they should be running away from commercial investment real estate (especially apartments) at the current time…
My answer is NO WAY!!
For some reason a few people took my article to mean that Armageddon is heading for apartments and investment real estate world. Well, that is not what I meant so lets get to the bottom of what I did mean.
First, there are always good deals to be found. No matter what the state of the market always keep in mind that there is always a good deal. If you know what you are doing you can make money in any market. Hot, cold, slow, fast, etc. It really does NOT matter. Now, are these deals going to come and knock on your door this evening and say,
“Hey, buy me, I am a great deal!!” You and I know that this does not happen (even though many people think that this will happen—you know the kind, no work plus a lot of work plus a few affirmations = success). Really good deals should not be easy to find. That is right, they should not be easy to locate. It gets back to the old saying of “If it was that easy….”
I Compare It To Needle In A Haystack
I do compare finding a great deal with finding a needle in a haystack. It is that difficult because of two things: 1) There just are not that many great deals on the market at all at any given time. It gets back to the old 80%—20% rule but in my opinion when it comes to investment real estate I think it is more of a 95%—5% rule.
Some of My Best Clients Still Need Reminding
Even some of my best clients need reminding of this. When some of them contact me they are disappointed that I do not have a great deal for them right there on the spot. Or, even if they have to wait a few weeks many start getting antsy. Let me give you a great real estate law to live by. Let's call this Garman’s Law: Here it is…..
All Great Real Estate Deals Happen Slow…. Not Fast.
The best real estate deals that I have ever been involved in were slow movers. Slow finding the property, slow due diligence, slow negotiation, etc. It was slow not fast. It is the fast deals that you need to be concerned about. These are the ones that can disappoint you.
So who’s left??
Here is the writing on the wall. If this is the case and our good and even substandard tenants are getting financing to buy their own place, who is left over to rent your property??
People serving time! (Just kidding). But close, people that are sooo bad that they could not get a loan. And, most of the time these are people that you do not want occupying your rental home, apartment or commercial property either.
So, what do you do? Do you run away from this, get out of the commercial investment business altogether?
Of course not. But, you better make sure
So What Does All Of This Have To Do With Ease Of Credit And The Effect Of IT on Us...The Commercial Real Estate Owners and Investors….
Here is what it means :
1) Great deals will not be as easy to find.
2) Great deals will take longer to find.
3) You will need to be a very, very good manager to lock in profits. No more winging it.
4) You will have to do more due diligence.
5) Bottom line? You will have to ask more questions.
The Main Reason People Work With ME
Of course, the main reason people work with me is that I do all of this for them. Simple as that. However, even though this is the case and I do save people A LOT of time and hassle and they do get good properties from me….They need to be asking more questions. The majority of people that I work with DO NOT ask enough questions.
So keep all of this in mind as you go through the investment part of your life. Especially in the commercial real estate world. Nothing worth it is easy. Nothing worth it comes to you overnight. You are building wealth not an erector set.
Always Remember 95%—5%
By the way, this applies to more things than just real estate but we will keep it here on our investment real estate planet for now. The best thing you can do is be hooked up to me, constantly aware of what is going on in the marketplace. Always informed. And when that great deal comes up you will know it and not even question it.
About Darin Garman, CCIM…Considered by many to be one of the foremost experts in North America on Apartment and Commercial Property Investments, Darin Garman assists investors in maximizing their wealth through commercial real estate investments.
Over the last 13 years Darin has assisted investors in the purchase and sale of over $300,000,000 in apartments and commercial real estate, and has direct ownership and management of over $11,000,000 in investment real estate himself.
Darin is a frequent guest on radio and TV talk shows, and has co-authored books such as “Wealth Attraction For Entrepreneurs...The No Holds Barred Kick Butt Guide To Becoming Rich”, which was co-authored by Darin with business and marketing guru Dan Kennedy.
***** Have you taken advantage of the "FREE 2-Month Test Drive of Darin Garman's Commercial Investment Property Owners Association Membership"? Go To: *****
http://www.garmanupdate.com or http://www.commercial-investments.com
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