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When you’re considering investing in commercial real estate, it’s normal to feel like you don’t know enough when you get started. Real estate terms such as lease agreements, maximum rates, zoning regulations and financing structures can seem overwhelming. It’s also a relationship thing, and who you know matters. You want to have valuable information to share with others so you can move forward with deals.
I often get questions about ways to increase knowledge about real estate investing. Throughout my career, I’ve spent time listening to podcasts, reading publications, and talking to others to stay on top of trends and gain insights. There are several tools you can use to deepen your understanding of commercial real estate and gain the Insider’s Edge in investing. In this second article in a three-part series on overcoming the challenges of investing, we look at how we can close the knowledge gap (see the first article here).
Why knowledge feels intimidating
Unlike the stock market, where you can track prices with one click, real estate is not always transparent. Two buildings on the same block can sell for very different amounts, and the reasons are not always clear to beginners. That lack of clarity can make you feel like an outsider.
Fortunately, you can gain knowledge anywhere. When I started my career, I knew very little about real estate. I spent the first 90 days studying a market to become an expert in it. Because I was so familiar with the neighborhoods in which I was researching, I was quickly able to share insider knowledge with clients.
How to gain knowledge
Start with these tactics to better understand your region and gain an edge over the competition:
- Study markets deliberately. Choose an area or property type and dive in. Learn vacancy rates, rental prices and development plans. The more you focus, the sharper your insight becomes.
- Read and listen daily. Industry publications, podcasts and reports are valuable. Outlets like The Real Deal, Commercial Observer and Globe Street share stories that reveal how deals get done and why.
- Take structured learning seriously. Programs like A.CRE’s Accelerator or similar underwriting courses teach you how to scientifically analyze properties. Figures like net operating income and capitalization rates will soon become meaningful.
Learn through mentors
Knowledge grows faster when you learn from those before you. A mentor can dramatically shorten your learning curve. They can show you how to look beyond the surface, recognize red flags, and spot opportunities. When I started, I was fortunate to have great mentors to listen to and observe: Paul Massey and Bob Knakal.
If you don’t have a mentor yet, you can find one through your current network, local real estate associations, or online communities. Many successful investors are willing to help those who show initiative and responsibility.
Don’t wait for perfect knowledge
It won’t be possible to know everything before you start because part of the process involves going through experiences and learning from them. You can start with the goal of having enough information to spot a good opportunity and find a partner for a deal.
As you progress, you can continue to build your network and look for experts who are willing to share their experiences. By steadily expanding your knowledge, you will gain the confidence to evaluate opportunities and take action.
In real estate, knowledge can be a career-long process. You want to keep reading, analyzing deals, and talking to others. As you do this, you’ll get closer to making investments that fit your business plan and building a long-term portfolio.
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