Essentials

There are a couple of factors that are essential to anyone investing in commercial real estate, but are really directed to the first-time investor:

1. Be secure in your day job. That is, have an established career that will allow you to moonlight in commercial real estate without sacrificing your home, insurance and retirement.
2. Have enough savings to cover one year of living expenses.

Liquidity

Investors also need to realize that real estate is not a liquid investment. If you need to convert your assets to cash immediately, commercial real estate is not the answer. A more liquid option would be CD’s, marketable securities or even a savings account. The lack of liquidity in commercial real estate may not be viewed as a negative, especially if you plan to hold onto the property for the long term. Over time, the market has demonstrated that real estate is a lucrative investment. The savvy investor will be in it for the long haul.

Finally, the best real estate investment is your own home. It is advisable to have experience in residential real estate in some capacity before embarking on commercial real estate investment.