If you’re just delving into the lucrative investment strategy known as real estate, there is much to learn from those that have come before you. These, then, are the tried and true—the what not to do as you aim and take fire at your first Texas commercial real estate investment.
One of the most common errors first-time investors experience is what is known among the established set as “eyes bigger than their stomach.” Instead of starting small and getting their feet wet, many first time investors start with a major overhaul or a multifamily property instead of a simple rehab or rental. While real estate investing is about the numbers and the bottom line, it’s also about experience, which leads us to the other major faux pas among first-time Texas commercial real estate investors—not sticking with what they know. If you’re a contractor, you’ve got a great head start among those investors or fix-and-flippers whose experience has been derived from watching HGTV. But even you, my friend, who understands timetables and costs, can get in over your head. Team up with other experts such as a real estate agent who knows the markets or a mentor who can lead you down the path of profitable CRE.
Mistake number three is all about the money and not having enough capital reserves when the unexpected arises—and nine times out of ten, you will get a surprise. From water damage and rotting wood to bad wiring, keeping some funds set aside for these occurrences will keep you from having to search for funds mid-stream, never a good scenario.
Surprises are less likely to occur when you have a good team in place which leads to mistake number four—trying to do it all yourself. If you’re not a real estate agent, consider getting one on your team that knows the market and can suggest what upgrades are worth the price and which ones will price the home out of the market. If you’re not a contractor, find one that has your back, that is excellent at what they do and knows how to bid with precision, and that you can trust explicitly.
Location – Location – Location
The small business mantra—location, location, location—applies to Texas commercial real estate investments as well. It’s important that you understand the market—is it a growing community with a good job market? How is the school district? Is your target tenant or buyer a family, college student, or professional? This needs to be decided before you start your renovation because it will determine, to a large degree, the design.
Consider a private hard money lender for your first Texas commercial real estate project.
At Level 4 Funding, we provide hard money asset-based loans. These types of loans are quick to funding and do not require the stringent credit scores that traditional lenders are bound by. We offer competitive interest rates and terms as long as 60 months. We can also set you up with your next bridge or construction loan and have worked with many a developer to supply all of their funding needs for multiple projects.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.