Texas Commercial Real Estate investing can be a very lucrative investment strategy. Here are a few tips to help first-time investors succeed.
With the instability in the Asia and the resulting tweets in America, some are wondering if another crisis fueled by instability is at hand. While the politics of the world can be unnerving, those that have been in real estate investing for some time are still betting that the double-digit return that many have seen in the last few years will continue to climb. After all, in an unsteady world, the solid aspect of land can feel a little more secure than the ticker symbols of Wall Street. Here, then, are a few tips for those thinking about entering this investment strategy.
Know your strengths. While that goes for many walks of life, it is particularly true in the Texas Commercial Real Estate industry. Though many investors now sit behind polished mahogany desks, there was a time when these same individuals had hammer in hand or a real estate license under their belt. The key is profits. If you can renovate a distressed property or sell it once it is ready to go on the market, you increase the often slim margins. If you’re considering buying and holding in order to build equity and your portfolio and create multiple streams of income, know your numbers—the rent that particular market will sustain and the bills that are coming out of it, and don’t forget the property taxes. Set a goal of 6 percent returns for your first year and don’t forget maintenance costs which are usually calculated at 1 percent of the property value.
Get the down payment. Texas Commercial Real Estate investments are different than owner-occupied properties and often require higher down payments. Depending on the type of loan and your credit score, you will need anywhere from 10 to 30 percent of the property’s value as a down. When you’re ready to get that first property, don’t plop down your money on the first distressed building you find. Take into account the market and community—is it located in a good school district, a fairly decent neighborhood, and is there a growing job market? These factors are important whether you are planning on buying and holding or fixing and flipping. And remember, change is inherent in this industry.
Some Investors use Hard Money Loans
Texas Commercial Real Estate investors use hard money loans for several reasons. Private hard money lenders are not held to the same restrictions that conventional lenders are inundated by. This leads to quick approval and funding. They are also hard asset-based lenders meaning that they pay less attention to your credit score or creditworthiness and more to the value of your asset or collateral.
Private hard money lenders offer asset-based loans that can be funded in less than a week.
There are several unique programs that those in this industry use on a regular basis. At Level 4 Funding we offer bridge loans and construction loans. Both are short-term loans, anywhere from 3 to 24 months that offer interest only payments, quick access to capital, and no minimum credit score requirements.
Dennis Dahlberg
Broker/RI/CEO/MLO
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.
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