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How To Adopt The Mindset Of A Successful Commercial Real Estate Investor

Published on Friday - March 03, 2017

Have you ever thought about what it would be like to take your real estate investing career to the next level?

If you’ve had success with residential rehab properties, wholesale properties, or rental properties in the past, there is no reason why that same success couldn’t transfer into the commercial real estate sector.

While commercial investing sounds big and scary, the only thing that separates a residential investor from a commercial real estate investor is a shift in mindset. As a commercial investor, it is still just as crucial to generate leads, hone your marketing skills, build relationships, and improve your communication skills. The only difference: larger properties.

The most common concern investors have when making the jump to commercial real estate is their lack of completed deals. “I want to invest in a commercial building, but I have no track record,” is every newbie’s biggest excuse. Well guess what, you had no experience in residential real estate before completing your first deal either, but what did you do? Took a leap of faith.

The easiest way to prove yourself as a successful commercial real estate investor is to radiate confidence; the easiest way to do so is to build credibility. So let’s start with that.

How To Build Credibility As A Commercial Real Estate Investor

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If you’ve never completed a commercial deal, how are you supposed to convince sellers that you are the perfect candidate for their job? Short answer: fake it until you make it. Long answer:

Step 1: Talk Like An Experienced Commercial Investor

If you want sellers and other professionals in the commercial real estate industry to take you seriously, you must learn the lingo. Considering a multi-family unit or apartment complex? You better use the right verbiage to describe everything from property management needs to tenant evictions. Mind your due diligence before meeting with your lender or seller. Read books, research the companies, and most importantly, act confident. Remember, nothing says “newbie” like using the wrong language.

Step 2: Build A Website

In the competitive environment of real estate investing, it is no longer enough to have business cards and your rolodex. The best investors are creating well-designed websites that show-off their history of deals along with links to their various social media channels – talk about credibility! The fact of the matter remains: those with an online presence will be taken more seriously than those without. If you already own a website, you’re halfway there. Just be sure to update your site with your most recent deals and other relevant details. If you’re behind on the website game, don’t worry! There are plenty of free online platforms the guide beginner’s through the basics of creating a website.

Step 3: Brag About Your Team

Continuous networking is the key to success as a commercial real estate investor. If you can prove you know how to build and maintain relationships, you’re halfway to becoming an expert. The most crucial people to have on your team include a lender, a property manager, a CPA, a real estate attorney, and an SEC attorney. When talking to sellers, be sure to mention your team frequently. You can even include a page on your real estate website the explains the role of each member of your team. Remember, surrounding yourself with a big (and more importantly, qualified) team will help to make up for your lack of experience.

Step 4: Create A Credibility Packet

Your credibility portfolio should start with your cover letter and resume. Your cover letter should give a brief introduction of who you are, what you do, what your goals are, and how you’ve achieved success. Any seller should be able to read your cover letter and immediately have a better understanding of why you’re the perfect buyer. Your resume, on the other hand, can be a bit more technical and outline the deals you’ve completed. Even though you don’t have a track record of commercial deals, you should still highlight the successes of your residential deals. The final element of your credibility portfolio should be a sample deal packet. This should show every aspect of the deal you are hoping to close from start to finish. Include financial projection, actual financials, a deal timeline, and a short bio of every person you plan to work with. Your sample deal packet should be a complete summary of your entire deal down to the terms of the investment. Everything but the signed contract itself should be included.

Now that you understand how to build credibility and improve confidence, it is time to discover how to cultivate the mindset of a successful commercial real estate investor.

How To Cultivate The Mindset Of A Successful Commercial Real Estate Investor

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Once you have confidence, shifting your mindset is easy. Just be sure to remember these 3 aspects:

Expect Failure: If you prepare for the worst, you’ll be able to handle any challenge that comes your way. Chances are, your first deal won’t close without a hiccup, and that is okay! Studies show that those who fail after doing something once are more likely to achieve success the second time through. Why? Because they are able to learn from their mistakes. So don’t become fixated on the success. Instead, embrace the hurdles and view them as a chance to learn and improve.

Delegate: A successful commercial real estate investor wears many hats. From marketer and networker to design expert, a commercial investor has to do it all. Move away from the mindset of “me” and shift to the mindset of “we.” If you surround yourself with the best possible team, you won’t have to worry when things go awry. Don’t be afraid to delegate tasks to a person with less on his or her plate. Remember, an investor’s most valuable asset is time – so don’t waste your time in areas of your business that won’t bring in a significant ROI.

AHAB: One common trait all successful investors possess is the desire to constantly pursue higher education. One way to achieve this is to “always have a book” (AHAB). Trends in real estate are constantly changing, which is why it is important to stay up to date if you want to stay ahead of the competition. Stay curious, learn new skills, and always look for ways to improve yourself. Commit to learning one new thing each day and you and your business will reap the rewards.

Don’t be afraid to venture into the world of commercial investing. If you have proven success in the residential sector, you have what it takes to be a commercial real estate investor. So shift your mindset, dream big, and take that first step.

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