Know What You Don't Know

Have you ever heard anyone say that they are so lost on a subject that they don't even know what they don't know? I have heard that recently and it came from a very bright person.

What they mean is that they understand that they can't get started until they learn where to start. Growth only comes from being able to understand where you are at.

In commercial real estate this saying is very true. You must know how to get started in order to be successful. While many people think they know how and where to start the truth is they don't know what they don't know.

For those of you that want to transition from residential investments to small commercially you must listen to what your trusted advisers are saying to you. If you listen to everybody on the street corner and can't get anywhere, then maybe it's time to build a team of trusted professionals that will give you the right answers.

Remember, this is a business and you're not always going to hear what you want to hear. As a matter of fact the really good advisers will give it to you straight. You may not like it, but hey, at least you'll know what you don't know and that's a start!

So figure out when its time to get serious about making that transition and then call a professional that will tell it to you straight and stop spinning your wheels and wasting time with nare-do-wells that just want to get in your pocket.

Sometimes a little dose of reality is just what the doctor ordered!

Michael Gross is the President of Dividend America Mortgage and has been in real estate for over 20 years. He has been a builder, a Realtor, an appraiser, and currently he is a lender and an active real estate investor. He uses all of his experience and knowledge to show individuals how to properly use a mortgage as a tool to help create greater wealth through real estate investing. For more information on residential and small commercial loans please call 770-350-7373 or email mgross@dividendamerica.com

Reposition For Profits

One of the best strategies an investor can use to create profits with commercial properties is to purchase fully depreciated buildings and reposition them. But what does it mean to 'reposition' a property?

Repositioning a property is when the use for the property is changed in order to suit the new demographic of the neighborhood it is located in. Many times we think of this when we see older shopping centers go vacant because the grocery store moved down the street into a brighter and more modern facility.

The owners of the vacated center will continue to attempt to attract the same clientele they had before. After a while the traffic count dies and more tenants leave. Before long the center is nothing more than a dilapidated shell.

Savvy investors can use this to their advantage and obtain the property for a fraction of its future repositioned value. Many investors struggle with this concept, the thing that holds them back is financing.

Stuck in the rut of lthinking that arge down payments will be required and having limited vision, investors fall prey to the old thinking that banks will not lend on half vacant buildings. But that thinking is wrong.

There are lenders that will lend based on the future stabilized value of the property. These loans are very similar to the more traditional Acquisition and Development loans. The only difference is that after the property has been stabilized, these loans convert into long-term permanent financing.

The loans are based on the LTV and the LTC (Loan To Cost). The down payment is usually a percentage of the cost to purchase the property, fix it up and get it leased and can be as low 10% down.

Repositioning a property and using this type of financing strategy can be a great way to get started in commercial real estate. Don't let the down market stop you from getting out there and making offers, money is available today!

Michael Gross is the author of this blog. He is President of Dividend America Mortgage and has been an appraiser, builder and Realtor. He uses all of his knowledge and experience to help others gain wealth through real estate investing. Contact Michael at 770-350-7373 or email your questions to mgross@dividendamerica.com