How to Invest in Commercial Real Estate at 18
I started my career in commercial real estate when I was 21 years old.
Sure, I got started relatively early, but I can’t help but think, “where would I be now if I’d gotten interested in commercial real estate investing even earlier.”
And since I get asked all the time on YouTube from high school and college aged individuals about how they can get into the industry, I figured I’d share my thoughts on how you can kick off your commercial real estate investing career at 18 years old.
Learn as Much as You Can About Commercial Real Estate
This section is incredibly important to starting your investment career off the right way - so don’t gloss over it.
Yes, it’s not a “1-2-3 step” process to show you how to buy your first property, but knowledge is power, especially when it comes to finding and recognizing good deals.
When I first got started as a leasing agent at a boutique development firm, I was either cold calling, door knocking, or spending my time learning more about commercial real estate so I could understand the process more and actually bring value to any deal I found.
I would recommend getting your hands on any books you can (my top ten list is here), listing to podcasts, watching YouTube videos, or finding a mentor / employer that you can work for and learn from.
The more you know, the better you’ll be able to find yourself a deal and partners, so if you have less than $50,000 to get started, invest in yourself, first.
Find a Mentor or Job in the Industry
I spent 4.5 years with an established development firm when I first started my career and it was the best thing I could’ve done for myself and my future. I learned from two developers that had been in the industry for decades, made many good contacts from engineers to brokers that would help me in the future, and was able to witness firsthand how these deals got done.
And I know - you want to skip that part and dive right into having your own gig. But in order to raise capital to do the right deals, you’ll need:
A track record of successful projects (so that investors / partners know you know what you’re doing)
Time spent in the industry (so that you have seen enough projects to know what to look for)
Your own capital set aside (yes, even if you’re raising money you will have to pay the upfront costs until you close)
And have the contacts to help you pull it off (commercial real estate is a team game, and the more people you know, the better)
It takes around 3 to 5 years to really have a strong grasp on everything you need to learn about commercial real estate - and trust me, it’s a lot. Having a mentor guide you through the process or working for a company that is executing on deals that you’d like to do one day will end up giving you a head start in the long run.
As Abraham Lincoln once said, “If I only had an hour to chop down a tree, I would spend the first 45 minutes sharpening my axe.”
Network, Network, Network
As I just mentioned, commercial real estate is a team sport.
It is simply impossible for you to handle each and every portion of the process the right way and within the time constraints you will have on each project.
As a developer, I have no interest in selling my own residential units, designing the civil engineering for a site, managing subcontractors while we’re building - and the list goes on.
Even if you plan to be a one-person shop, you’ll need to outsource much of the work to specialized groups to ensure you’re crossing your t’s and dotting your i’s.
As early as you can, join a local real estate investing group, Chamber of Commerce, neighborhood associations, and industry specific associations, such as the Urban Land Institute.
These relationships will benefit you tenfold in the future when you’re working through a contract.
Now, You’re Ready to…Learn Some More
Once you’ve started establishing yourself within your local market, you’ll want to continue to educate yourself on the process as much as you possibly can.
After all, you’ll need to learn the commercial due diligence process, how to underwrite commercial real estate, how to raise capital and finance your deals, and how to properly manage the assets.
The best thing that you can do when you’re young and hungry in the industry is to soak up all of the knowledge and make as many contacts as you can. Commercial real estate isn’t a slow process if you approach it the right way. Sure, those first five years may be more learning than you’d like, but at least you’re getting paid to do it, right??
I didn’t buy my first office building with investors until I was 26 - 5 years into working in commercial real estate. Since then, we’ve acquired over 2.1 million square feet of office, retail, industrial, and hospitality assets and it snowballs.
You’ve just got to lay down the right foundation.
This episode of Office Hours covers strategies for commercial real estate investing, brokerage, and career growth as Tyler Cauble takes live questions. He also discusses upcoming projects like a brokerage mastermind and hiring an investor relations lead.