Unlocking Real Estate Success: Grant Cardone’s Five Steps to Buying Commercial Property

In the ever-evolving landscape of real estate investment, many aspiring investors find themselves overwhelmed by the complexities of entering the market. However, Grant Cardone, a prominent American businessman, financial influencer, and author, has simplified the process of buying commercial real estate into five actionable steps. His insights not only demystify the buying process but also empower individuals to take control of their financial futures.

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Step 1: Find the Property

The first and most crucial step in the commercial real estate buying process is identifying the right property. According to Cardone, this phase constitutes about 80% of the work involved. Whether you utilize apps or enlist the help of brokers, finding a suitable property is paramount.

Once you spot a potential investment, Cardone emphasizes the importance of promptly contacting the broker. This initial conversation is vital for gathering insights about the property and beginning the underwriting process. Underwriting involves assessing the financial viability and risks associated with the investment, allowing you to determine the range of offers you might make.

For instance, during a call with a broker, Cardone might inquire about the number of units, their rental rates, and the occupancy rate. This information is crucial for estimating potential returns and formulating a competitive offer.

Step 2: Get the Contract

Once you’ve identified a property, the next step is securing a contract. Cardone advises against seeking bank quotes for financing before having a contract in place. Lenders often provide optimistic terms that may not reflect reality, skewing your financial planning.

After securing a contract, you can approach lenders with a clearer understanding of your financial needs. It’s essential to note that banks typically won’t fund the entire value of a commercial property. They use a loan-to-value (LTV) ratio to determine how much they are willing to lend. For example, if a property is valued at $1,000,000 and the bank offers a 65% LTV, you would receive $650,000 in funding.

Step 3: Get the Cash

With a bank loan in hand, the next step is to secure additional equity to cover the remaining costs. Cardone explains that having a contract and bank commitment makes it easier to attract private investors. At this stage, you can invite others to invest in the property, allowing them to share in the cash flow generated by the investment.

Once you’ve gathered enough investors, you can finalize the purchase and begin profiting from your transaction. However, Cardone stresses that the buying process doesn’t end here; two more critical steps remain.

Step 4: Expand the Network

To uncover lucrative deals before they hit the mainstream market, it’s essential to continually expand your network. Cardone advises maintaining relationships with brokers you’ve interacted with, even if a deal doesn’t materialize. By expressing your ongoing interest, you position yourself to receive alerts about upcoming commercial real estate opportunities that others might miss.

Step 5: Build the Confidence

Confidence is a key ingredient in successful real estate investing, yet it can be elusive. While some may adopt the “fake it until you make it” mentality, Cardone warns against this approach, as authenticity is crucial in real estate.

To cultivate confidence, immerse yourself in the market. Actively seek out deals, engage with brokers, and ask insightful questions. The more knowledge you acquire about a property—such as the reasons for its sale, the seller’s expectations, and its unique features—the more assured you will feel as a buyer.

Conclusion

Grant Cardone’s five-step process for buying commercial real estate serves as a roadmap for aspiring investors. By focusing on property identification, securing contracts, obtaining financing, expanding networks, and building confidence, individuals can navigate the complexities of real estate investment with greater ease. With the right approach and mindset, anyone can unlock the potential of commercial real estate and take significant strides toward financial independence.

As you embark on your real estate journey, remember that knowledge is power, and the right strategies can lead you to success.