What Are Your Top 5 Challenges In Investing in Commercial (or Residential) Real Estate?

Question

Hi Guys,

I was hoping to possibly stir up some interesting conversation and get some honest feedback from everyone about our common topic of interest: investing (commercial or residential) real estate.

Regardless of the level of experience you have in real estate, what would you say your top 5 (or more) challenges are in real estate investing?

I would appreciate everyone else's input on this when you get a chance.

Thank you in advance for all your feedback!

Answer 1

.  Commercial:

Most tenants are dreamers who now have their dream business.

Most tenants are using a lot of wishful thinking when planning their income for the year.

Most tenants do not have as much money in the bank as they really need to successfully operate a business.

The city and county and state all want taxes to be paid.  They don't care if i am going thru a bad time at work.

Commercial loans are a pain and they are unattractive.  

Answer 2

cash flow, cash flow, cash flow, cash flow and cash flow.

People that get into investment real estate hear all the stories about NO MONEY DOWN.  But the problem is, that you lose money every month.  Rents are less then expenses.

My rule of thumb is that my PITI equals 50 percent (or less) of my gross monthly rent.  The other 50% is NOT profit, but covers up keep and other expenses.

On all my properties I have a positive cash flow and a ROI of around 14% per year (before taxes and tax breaks).

Answer 3

I do creative real estate investing ( more specifically I'm a rent to own specialist ).

I find that the hardest thing is starting out and finding the right properties to invest in.

In lease purchasing, buyers are easy to find but finding a seller to rent to own thier home is tough.

The second hardest thing is marketing. 80% of my time is spent with marketing.

Answer 4

Tenants, City Government, Tenants, Code Enforcement, Tenants