An excellent article in today’s NYTimes.com about investing in Commercial real estate. I love this article because it echoes much of what I say to my clients when investigating commercial real estate opportunities; namely: proceed carefully.
Too often the urge to jump into an opportunity with the “get rich quick” mindset makes people foggy of the brain. The careful research they normally might apply to a consumer purchase such as a car or airline ticket to Orlando gets tossed out the window. A sense of urgency compels folks to jump now and check the parachute rigging later. Such reckless behavior is very dangerous.
If we can draw any lessons from the recent run up in residential real estate prices it should be that of cautious due diligence.
This NYTimes.com article professes just such an attitude. So do I.
Sometimes I meet a new client whose fervor to jump in causes them to lose patience with my careful—and much slower—approach. I’ll take my time to thoroughly prequalify every aspect of the transaction. I wouldn’t be servicing my client properly if I didn’t. I need to work with a view towards anticipating problems and solving those problems to get the loan approval and ultimately the closing.
My attorney John McEntee once told me, “The best way to make money in real estate is just to buy it.” He did not say, “…throw all caution to the wind and buy it.”
Commercial real estate is a very unique market, different from residential real estate in every way including the financing.
I’ll choose the cautious “due diligence” approach every time, thank you very much. If that’s how you want to approach your investment in commercial properties, then I’m your (financing) man!
The NYTimes.com article is here:
10 Ways To Stumble In Commercial Real Estate