319. The Power of Creative Capital in Commercial Real Estate

Key Takeaways:

Creative Capital Matters More Than Cash

You don't need all the money upfront to invest in commercial real estate

Focus on controlling the deal and finding creative financing options

Explore strategies like seller financing, lines of credit, and investor partnerships

Financing Strategies

Consider 100% seller financing for commercial properties

Use lines of credit strategically if investment returns exceed interest rates

Partner with experienced investors to leverage their track record

Investment Goals

Aim for 18-22% internal rate of return

Target 20% annualized cash-on-cash return

Look for deals with multiple value creation opportunities

Networking is Critical

Attend real estate investor events

Build relationships with potential partners

Do thorough due diligence on potential investment partners

Risk Management

Prefer fixed-rate loans over adjustable-rate mortgages

Pay cash for land investments when possible

Always have a clear strategy for debt service and cash flow

Focus on Creating Value

Look for opportunities to provide affordable spaces for businesses

Consider unique amenities that attract tenants and employees

Think creatively about property development and usage