Getting financial freedom before hitting 30 is the BIG dream for youngest people today. Now, there are many ways of doing it and there are many approaches one can take.
Some people believe in actively working in order to be able to financially independent while some belief in more passive forms of earning income like – investing in commercial real estate (yes, that’s the favorite one), starting a YouTube channel, starting a blog, investing in CDs (Certificate of Deposits), investing in REITs, buying a successful business, investing in the stock market, investing in mutual funds and so on.
If you look at what most people who have achieved financial independence at an early age like 25 or 30, you can see them almost all of them have done it by doing something that draws them passive income.
And of all the ways one can achieve financial freedom through passive income, our favorite (and the favorite of youngest real estate investors today) is investing in commercial real estate.
This blog is an overview of just how to go about commercial real estate investing with the goal of gaining financial freedom at the age of 30. Read on.
Interesting ways one can invest in commercial real estate to achieve financial freedom at 30 (or even before that if done right!!)
1) Begin by investing in lower cost cities
Real estate investing has rather been romanticized by many people today and the picture painted is that it is very easy to enter into the game and totally rock at it.
But as a matter of fact, it is not that easy. It is not a cakewalk and it does take genuine efforts in terms of investment of time and energies on the real estate before you can start earning a decent income.
So, although it is very appealing to invest in hot areas of the urban cities, it is extremely difficult (of course unless you have a filthy rich dad who will give you a fat hand loan).
So, what’s your next bet? – To explore lower cost cities where the rates won’t be very high, both of the land and that of a commercial real estate loan.
These cities might not be the hottest destinations in the country, but they’re an amazing place to start! And if done right, you can always slowly build upon these properties, making more and more purchases and sales based on the cash flows you generate.
Remember that it is always suggested to always keep the money circulating and not stable. So, do your research and homework and look for much lower cost cities to begin your commercial real estate investment career.
2) Invest in smaller pieces of lands that come at dirt cheap prices if you want to start small
It is very understandable that you might not want to go all in into real estate investing by bringing in a huge amount of cash to the table.
You might wish to experiment a little at the first and it’s absolutely okay to do so. In fact, most investors begin this way and understand if they’re really into investing in commercial real estate.
So, starting small is a good idea. How small is small? Well, you can start investing in commercial real estate with as little as $500.
The best way to invest in real estate with a low budget as little as $500 is by exploring the land sales on eBay. Yes, as crazy as that may sound, it is true.
You will find small pieces of land on sale on eBay that you can buy and hold until you find a high value for this property. These small patches of land would rather be less worthy you may argue?
Well, as of now they might be of really low value. But they have a huge scope for improvement and appreciation.
For example: When a big shopping mall or a big supermarket like Walmart decides to open up in that area, you will be surprised to know the high value your small piece of land can generate for you! So, don’t lock your options out and don’t be afraid to experiment a little bit.
3) Investing in multi-family properties
If you want to lay back and enjoy the benefits of regular passive cash flow from a property, investing in multi-family properties can be your best bet!
They need low maintenance and all attention they’ll really need from your side is to ensure that no block is a blank or empty space in your multi-family property and you have enough tenants interested to move in.
If you take care of just that, multi-family properties can be a great way of ensuring that you earn some regular cash flow every month. Explore the plethora of commercial real estate loans available for people looking to invest in multi-family properties.
4) Invest in REITs
Real Estate Investment Trusts are agencies that pool the small investments coming in from hundreds of thousands of investors and invest these funds into real estate.
Think of it as a mutual fund investment plan for real estate. If you do not wish to do more of leg work and think actively about real estate investing, entering the market through REITs can be your best bet.
Besides, since REITs spread your investments across a wide variety of real estate investing options, your losses are also averaged out and hence you can safely call it a low-risk venture.
So, if you’re looking for a low-risk and low-involvement kind of commercial real estate investment opportunity, REITs is what you should be looking at.
5) Investing in rehab properties
Another great way of investing in real estate to achieve financial freedom at 30 is by buying partially completed or ‘almost’ completed properties, making repairs and renovations to them and making them your money earning assets by either:
A) Flipping these properties at a higher value – Flipping properties in commercial real estate investing means buying properties with the goal of reselling them at a higher price than the purchase price by incurring little expenses towards repairs and renovations of the property. You can do this with the rehab properties that you bought OR
B) Renting them out and earning a regular rental income – Renting a property by incurring initial expenses towards repairs and renovations is also a great way of earning a regular passive income through rental income without having to actively invest a lot of time in finding potential buyers to buy your property, which you would otherwise have to in case of Flipping properties.
These are some ways through which invest in commercial real estate to achieve financial freedom at 30 or sooner.
Given below are the two most useful tips for young investors willing to enter the commercial real estate investing. (these tips are so important because this is where most young people are getting it all wrong and we don’t wish you do!)
Number 1 – Be willing to put in the time needed in order to understand the tricks of the trade
Many young people end up losing money in their commercial real estate investment venture because they want it all too easy! But in reality, it does not work like that.
You must be willing to put in the kind of time needed in order to understand the market so you can make better timely decisions.
And believe us, real estate investment is a lot about timing and making the right decisions at the right time and that you will be able to do only when you’re investing enough time into it in the first place.
Remember that, this investment of time earlier on will bring you huge results and returns in the long run, if not with an immediate effect.
Number 2 – Learn how you can optimally use the services of private money loans lenders
Savvy commercial real estate investors are not the ones with BIG money who only use their own money – MOST of them (in fact, we would say ALMOST all of them) use commercial real estate loans to finance their commercial real estate investments and to refinance their previous loans.
So, as a beginner, even though, it might feel a little insecure to avail a loan in order to finance your real estate investing needs, you should consider it sooner or later.
We would suggest, the sooner the better because by starting it sooner, you will learn about how commercial real estate loans work sooner and that will work in your favor in so many ways!
Now, when it comes to availing commercial real estate loans, you need to understand firstly, about the kind of loans that make the most sense to you and secondly, about the kind of lenders who will be most suitable for you.
There are a plethora of lending institutions, banks, private money loans lenders from whom you can borrow a loan and which ones make the most sense for you is something you need to figure out based on your individual financing needs.
The reason these decisions are important is that they’re going to determine a great deal on how lucrative you can make your commercial real estate investments.
Being mindful of these tips and going smart about the ways you can invest in commercial real estate can definitely help you in achieving financial freedom as early on as at 30!