When I founded a financial services company 24 years ago, I was focused on my core business– hiring the right people, navigating arcane regulations and recruiting clients.
That’s how I got into real estate. It’s how many entrepreneurs get into real estate.
Do you know how much formal real estate training I have? Zero. If you’re a successful business owner in any other industry, you can be successful in real estate, if you’re careful and follow these simple rules.
Moving forward, I decided to buy my own offices. Throughout the years, I have bought and sold more than 50 properties, from commercial office buildings to single family houses. I even purchased a funeral home.
1. Buy what you know.
If you buy real estate handbooks or take pricey classes, the first lesson they’ll teach you is this: Do your homework and research. If that isn’t true in any industry, as.
If you’re successful in your industry, you already know a lot. In other words, you’re more qualified to buy a particular type of office building than many real estate professionals.
2. Let go of your ego.
Last month, I sold a funeral home in a low-income area for twice what I paid for it in 1996, while also raking in significant rent since time. I have friends who own pricey glass towers visible from the Interstate– because they like to go to parties, brag about the buildings they own, and hear, “Hey, I know that place!”
Few people know the places I’ve bought and sold. It turns out there are more dealmakers out there than successful businesses willing to spend extra for a fancy address.
Related: How Two Entrepreneurs Created a New Real Estate Culture
3. Recession-proof your purchases.
Along those lines, I look for the best values because I seek recession-proof properties. A friend of mine just bought a beautiful office building for $252 a square foot.
Real estate is a notorious boom-or-bust business, and like the stock market, it’s nearly impossible to time it perfectly. What I’ve learned is this: Recessions devastate the high-end commercial markets, but it doesn’t put everyone out of business. Those businesses trying to cut back will often ditch their high-priced offices for more modest ones– and I own many of those.
Bottom line: I not only profit as much as my friends with nicer properties, I sleep better at night knowing the things I can’t control won’t badly hurt me.
4. Sell to people just like you.
Buying a valuable property for the best price is only half the transaction. Real estate agents and brokers spend a lot of their time trying to locate tenants and buyers, and it’s a percentage game.
You’ve bought property you’ve used yourself, so you’re not only an expert in that kind of space, you can step into the shoes of your customers. You instinctually know how to market your offices. Hey, I’m not only a real estate owner, I’m a customer.
Related: 3 Tech Trends Helping Bring New Investors to Real Estate
5. Don’t believe your own hype.
Those who succeed in their core businesses and then dabble in real estate can do quite well. They can also overreach. It’s almost a stereotype: “I’ve conquered my industry, so that obviously means I can be a real estate genius, too!”
This is my most important piece of advice: Better to end your real estate career simply buying your own offices than believing you’re bulletproof and buying properties that are riskier than you think.
In other words, you’re more qualified to buy a particular type of office building than many real estate professionals.
Real estate is a notorious boom-or-bust business, and like the stock market, it’s nearly impossible to time it perfectly. Those who succeed in their core businesses and then dabble in real estate can do quite well.
Do you know how much formal real estate training I have? If you’re a successful business owner in any other industry, you can be successful in real estate, if you’re careful and follow these simple rules.
What did I know about horse ranches before I bought one? I knew I didn’t know.