When I met with Dan and his wife, I asked them a series of questions to find out what they wanted?

Dan asked me point blank (paraphrasing):

“Shane, I want a safe place to invest my money so one day I no longer have to go into the office. 

I want to stop trading time for money.   I’m tired of relying on my practice to put food on the table”.

With a clear target (replace his $300,000/year income) and understanding he was a busy professional, we made a short list of the types of properties that made the most sense

Step 1. The Plan - a clear investing blueprint.

Step 2. Learn the Game of Commercial Real Estate.

Step 3. Take Action and find the right property for his unique situation.

I first helped educate Dan on the market and helped him understand his unique affluence afforded him an opportunity.

He didn’t have to hustle around investing in rental properties paying him a few hundred dollars a month.  At that rate, he’d need 100 houses to replace his income.

I showed him that people of his financial affluence and status could leverage their wealth and access properties very few in the world could.  How to take advantage of his high income instead of competing with the masses on rental houses.

For Dan, Stability and Predictability were most important.

He didn’t have the time or expertise to do a heavy value add commercial property.

He was too busy and didn’t want a 2nd job to oversee 100 single family homes earning him 1.5% return on his money.

Dan wanted to replace his income and put his girls through an elite college.

Pick a property Big Enough.

Four months after working with Dan and his wife, I helped him find and close on a $4,800,000 commercial property delivering exceptional 11%/year returns.  IMPORTANT NOTE: Dan needed approx. 30% equity to close on the deal and didn’t have partners on his first deal.

He could have closed on a smaller deal- but, he liked this property and decided to invest a good portion of his savings into it.

This 1 property now pays him $24,400/month.

Five tenants paying him $24,400/month plus all his bills; property taxes, insurance and covers a professional property manager.

The Numbers:

• $17,000 (of the $24,400) pays his mortgage
• $7,390 goes into his bank account every month.
• Note- his tenants pay down his mortgage about $6,750 every month.  In the first year of owning this property, he will increase his equity in the property by $82,000 ($6,750 x 12 months).  Phantom Income- equity that he can’t spend, unless he sells or refinances.

When the mortgage is paid off in 25 years: One commercial property will pay him more than $305,000/year in passive income requiring about 2 hours of work/month.

*This assumes no appreciation and just rental steps/bumps.  A rental bump are predetermined rental increases already agreed to in the leases.

One investment goes a long way to getting Dan to retirement and paying his girl’s college tuition.

Dan’s on his way to doing this again with his second commercial property as of this writing.

This was the result of following the process and framework of finding the right commercial property in the right location at the right time.

Was it easy?

Not really.

• It took some time to find the property.
• To secure the mortgage.
• To analyze the tenants.

But, looking back it was worth it.

Dan’s email to me (some of private information has been blurred out for privacy)

Will this work for me?

Dan was nervous at first.

Commercial real estate can be intimidating.  Bigger numbers.  Sophisticated sellers, lenders, tenants.

Where do you start?  How do you actually do your first deal?

Find a well located commercial property with strong tenants big enough to afford a professional property manager.

Commercial properties are not typically listed on MLS.  The best properties rarely hit the market.

Investing in CRE is a relationship game.

The first thing we needed to do was establish Dan as a credible buyer (not hard to do when you understand what sellers and brokers are looking for).

Then, we built his team- commercial broker, lender, lawyer etc.

Within 4 months, he had his first commercial property.

That was Dan’s plan.

I’ve had other clients who just wanted passive income of  $6,000/month to cover their living expenses.

You need a custom plan to fit your circumstances.

An investing strategy and plan specific to you, based on what you’d like to achieve, and where you’re starting from today.

Some clients move faster and will leverage my 'Stair Step Method' (start with smaller commercial properties) -> Add Value-> then sell or refinance to move into larger properties.

The problem for many professionals earning high incomes, is they realize that investing in traditional places residential real estate requires a huge amount of time and is unlikely to generate substantial and predictable income to retire.

Too many people of the social elite go to investment seminars designed to help the masses, get to an ok retirement… someday.

Financial advice from people who specialize in helping average people invest their money isn’t going to produce the real wealth you’re after.

There’s a gap in the marketplace helping people who earn high six figure and 7 figure incomes - where can they invest, with control and safety.

But, you’re far from average.

You earn a phenomenal income that affords you certain advantages and opens the door to huge opportunities, especially in areas like commercial real estate.

The solution I commonly advise my highly affluent clients earning multiple 6-figure incomes is commercial real estate.

(I helped Tim start investing first passively in other people’s deals, then his own.  He accomplished this in under 12 months) ->>

 

 

Here’s why:

If you’re earning more than $200,000/year you have a distinct advantage to creating substantial net worth.

If you have savings of more than $200,000 to invest then it’s possible to get into commercial properties.

The commercial market is poorly understood by many, which allows for attractive risk adjusted returns.

Those with the financial affluence, combined with the right advice in markets of imperfect data, have the ability to make unparalleled profits.

Finally, commercial real estate deals are big enough, where just one property, in the right location can replace a 6-figure income.