3 Biggest Hurdles that Stop People from Commercial Real Estate

Discover the 3 biggest hurdles that stop people from investing in commercial real estate and how to prevent them from holding you back.

Hurdle #1: Timing the Market

The first hurdle that stops people from investing in commercial real estate is trying to time the market. Case in point, my friend Anthony wanted to jump into the commercial real estate market for years but from his perspective, it never seemed to be the right time for him. In 2018, at the peak of the real estate cycle, he told me he was waiting to invest until after the peak because he would get better deals when the market began to drop. So he waited and didn’t invest. In 2020, with all the uncertainty and looming recession he said, “Now is the worst time to put my money at risk!”. So he waited and didn’t invest. Now, in 2023, we have high inflation and rising interest rates and he’s waiting for the real estate market to crash. It hasn’t crashed and of course Anthony is still waiting, trying to time the market.

On the other hand, our student Ivan didn’t wait. While Anthony was sitting on the sidelines, Ivan joined our Protege Program and made $750,000 Net Profits on just two 5 unit multifamily deals!

3 Reasons Not to Time the Market

• One time in the market will always beat timing the market.
• If you try to time the market, you’ll never buy anything because there is no perfect moment to jump in. Something will always happen that will prevent you from getting started.
• You run the risk of missing out on exceptional returns, like our student Ivan experienced.

When is the Best Time to Invest?

Timing the market is futile. Don’t be like Anthony and let this hurdle hold you back from investing. Instead follow Ivan’s lead, take action, and achieve success. The best time to start in commercial real estate was yesterday, but the second-best time to start commercial real estate is today.

Hurdle #2: Fear

The second biggest hurdle is fear. And for some of you this is a huge hurdle for you to overcome. You may have the fear of losing money, making bad decisions on a deal, or you may be afraid of failure. Maybe you have a fear of debt and getting a commercial loan. You might have a fear of a recession or the US dollar crashing. Or maybe you are simply afraid of mismanaging your property or not being able to find good tenants.  Whatever your fear is, it is a powerful obstacle, but it can be overcome.

When I was a child, my friend Walter threw me into the deep end of the pool and I almost drowned. As a result, I had a fear of drowning. The fear was so great, that if I took a shower and water hit my face, I would hyperventilate. However, my dream was to compete as a triathlete and do triathlons around the country. It was a goal of mine, but how could I do that? You had to swim, bike, and run, and I couldn’t swim a lick. To achieve my goal, I had to overcome my fear and to do this I used the following strategies.

7 Strategies for Overcoming Fear

A year after my 30th birthday, I completed my first triathlon. And although you may not have the dream of competing in triathlons, you can use these strategies to overcome the fears that stop you from reaching your goal of investing in commercial real estate.

1. Acknowledge Your Fear: It is real to you, however sometimes in those fears, there’s a misunderstanding. Sometimes there’s a lie that you’re believing about that fear, and these lies or misunderstandings cause your mindset to limit you, so you never get to experience the full joy of life.
2. Educate Yourself: Become a student of the game. To become a triathlete, I had to learn how to do a triathlon. I had to train in swimming, biking, and running. You can do the same thing with commercial real estate. We have amazing resources for you: you can download my free book Commercial Real Estate for Beginners and you can also enroll in our free video course. Those are two steps you can take right now to learn more about commercial real estate investing.
3. Get Guidance from a Professional: Find someone with expertise in what you want to do. For my triathlon training, I hired a coach who was a successful triathlete and she taught me all the ropes so I could overcome my fear and complete my first triathlon. Getting step by step guidance from someone who has experience and success in commercial investing will help you overcome your fears.
4. Start Small: After completing the fist 3 steps, I started small with middle distance triathlons to the gain experience I needed before moving on to longer ones. The same applies to commercial real estate. You don’t need to start with fifty or a hundred units. You can start with a 12 unit or even a 5 unit multifamily. Just get started and then you can build up from there.
5. Surround Yourself with Smart and Positive People: A perfect example of this principle is one of our most popular coaches Julia Sheehan. She started off as a student, became a successful investor, and now she shares her wisdom and expertise with our students. She surrounded herself with smart and positive people and that has contributed to her success.
6. Have a Plan: Build a step-by-step action plan that is easy to follow. Prior to commercial estate, I was an engineer and I developed processes for other engineers to follow to become successful. I have transferred that skillset to commercial real estate, and it works amazingly well. Having a step by step process to follow is a great strategy for overcoming your fear.
7. Be Patient: It’s important to remember that success takes time. Commercial real estate is what we call a long game, so you need to have a long-term mindset.

What fears are holding you back? Text  PETER to 833-942-4516 or comment below.

Hurdle #3: Money

Money, or the lack of money, is often the biggest hurdle for people to overcome and that’s because they think they need a lot of money to get started. But the truth is, you don’t need a lot of money if you have the right knowledge and you know how to build relationships.

Knowledge: Knowing how to implement creative financing, how to use other people’s money to  purchase commercial real estate and knowing how to wholesale commercial properties are key strategies that will turn you into a powerhouse if you don’t have a lot of money.

Relationships: Commercial real estate is a relationship-based business. So, in addition to knowledge is you need to build a relationship with the seller. It doesn’t matter how much money you have; in the end it comes down to whether you can nurture relationships.

Strategies for Overcoming the Hurdle of Money

With your knowledge and ability to build relationships, you can create profitable deals. We have helped countless students structure amazing no money down deals, that prove you don’t need a a lot of cash to get started in commercial real estate.

Example #1: 90 Unit No Money Down

Jacob is 26 years old. Fresh out of college and waiting tables, he started off as a wholesaler in our program. On one of our coaching calls, he brought a 90-unit deal to us with a motivated seller. He was going to wholesale it, but we could see that it was a great deal, so I encouraged him to try to keep the property for himself. Long story short, he found investors and now he is a third owner of the property. He’s collecting $6,000 a month and he didn’t put any money into the deal. What he brought to the deal was the knowledge that the other partners didn’t have, proving that knowledge is key.

Example #2: 0 Down 18 Unit Apartment Investment Deal

Through our program, Takashi and Rae learned to use other people’s money to invest in commercial property. When they brought together a deal, their investor put in all the money, and they became managers of the LLC and managed the property. They leveraged their relationship building skills and their knowledge to structure an amazing deal. And they didn’t use any of their own money! Again, another example that proves you don’t need a lot of money to invest in commercial real estate.

Example #3: Seller Financed 7 Unit Multifamily Deal

Our Protege student John recently closed on a 7 unit that is 100% seller financed, meaning there was no down payment! By going direct to the seller, he was able to understand the seller’s motivation and implement creative financing techniques. The seller didn’t need the money right away, which meant John could purchase the property with no money down. The terms were 5.75% interest only for the first six months and then after 6 months, full principal and interest with a 20 year balloon. Again, this deal proves that it doesn’t matter how much money you have if you have the right knowledge and relationships to create win-win deals.

If you have any questions, post a comment below or text PETER to 833-942-4516.

Every Successful Commercial Real Estate Investor Has a Mentor

Every successful commercial real estate investor has a mentor. Get your mentor here:  Commercial Property Advisors Protege Program