In the book, Murray explains how small apartments are one of the best investments for long-term wealth accumulation. The real estate industry is constantly changing, and it can be difficult to find opportunities with lasting value in an unstable market. However, you might have missed your window by not taking advantage of today’s hot markets before they cool off again.
“Crushing It in Apartments and Commercial Real Estate” is a book that was written by Brian Murray. The book is about how to make money in the real estate market. This book will give you a lot of tips and tricks on how to make money through real estate. Read more in detail here: crushing it.
Are you seeking for a synopsis of Brian Murray’s book Crushing It in Apartments and Commercial Real Estate? You’ve arrived to the correct location.
After reading Brian Murray’s book, I wrote down a few crucial takeaways.
If you don’t have time, you don’t have to read the whole book. This book synopsis summarizes all you can take away from it.
Let’s get this party started right now.
I’ll go through the following subjects in my Summary of the book Crushing It in Apartments and Commercial Real Estate:
What’s the Big Deal with Apartments and Commercial Real Estate?
The author shares how he got so successful in the real estate industry in Crushing It in Apartments and Commercial Real Estate.
The book may assist existing property owners optimize their returns on investment, in addition to offering a wealth of information for potential investors. Along the way, the author presents instances from his many years in the sector.
Crushing It in Apartments and Commercial Real Estate is written by who?
Brian Murray is the founder and CEO of Washington Street Properties, a commercial real-estate investment firm that is one of the country’s fastest-growing private firms.
He won the Gold Stevie Award for Real Estate Executive of the Year at the 2015 Annual American Business Awards.
For Whom Are Apartments and Commercial Real Estate Crushing It?
It is not for everyone to crush it in apartments and commercial real estate. If you are one of the following folks, you may like the book:
- A potential investor interested in purchasing a business property or an apartment
- Those interested in creating a profitable small company
- Those who want to learn more about the real estate business
Summary of the book Crushing It in Apartments and Commercial Real Estate
Introduction
Many individuals believe that real estate is a good investment. The real-estate market usually appears to bounce back from economic downturns, enabling owners to rest while others fear and lose everything.
Why aren’t more people investing in real estate? Investing in real estate, like most things, isn’t as simple as you may believe. Property may be fraught with hazards, and it is just as likely to drain funds as it is to provide them.
This isn’t to say that real estate can’t make you wealthy. Yes, it is possible. The following tips will help you think about a few key factors before and after you make your first investment. You’ll learn a lot about real estate from a property-owning expert who has learnt what he knows from the field.
Lesson 1: Do the math before purchasing real estate to ensure the property will provide money.
It’s probable you’ve considered it. If you possessed a valuable piece of property, your money issues would be addressed for good. Commercial real estate investment may be lucrative, but it’s more than simply purchasing a few flats and waiting for the inevitable flood of cash.
You’ll need a basic understanding of financial concepts like net operating income and cash-on-cash returns to excel in this area.
The net operational income of a property is simple to calculate. You should calculate how much money you’ll make from the property in a year, including the rent renters will pay, the money earned by the laundry facilities, and the pet fees you’ll charge. Subtract the property’s annual expenses, such as taxes and upkeep. The property’s net operating income is all that’s left.
You may now compute the property’s cash-on-cash return using this value. You may determine your return on investment by dividing the net operational income by the initial investment in the property. Put a percentage sign in front of this amount and multiply it by 100. The greater the figure, the better. Cash-on-cash returns are a property’s return on cash.
You should select assets with low risk if you want to expand your investing portfolio. The least hazardous property is one that generates instant cash flow. It is critical to have this knowledge in order to make an educated choice.
When you invest in properties with high cash-on-cash returns, you lower the risk associated with all investments. Cash is the most important factor in real estate. Despite our best efforts, errors are unavoidable, and unpredictable situations are no different from high seas. It is critical to maintain a way of keeping afloat.
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Lesson 2: If you’re new to real estate investment, don’t leave your day job.
Murray once shared the ideas of a young investment with another keen investor. She intended to quit her present work and spend on some pleasures when she purchased her first business property. She was looking forward to many impending purchases, including a new automobile, a new office space, and a set of attractive business cards.
Despite his mistrust, the author understood something she didn’t: rookie real-estate investors should do all they can to avoid spending money.
If you’re a budding real estate investor, bootstrapping — that is, creatively using the resources at your disposal – is the way to go. Extra monies should be directed towards new real-estate purchases, not expensive office space or flashy business cards, to stretch your finances as far as feasible.
It necessitates some self-sacrifice. For example, the author’s personal office was a utility closet in the basement of his first office building. He could have selected the most expensive room, but he wouldn’t have been able to maximize his revenues. He made the most money by picking the least desired location in the structure.
Similarly, the young investor’s intentions to leave her work were misplaced. Like many other successful investors, the author kept his employment until the company was formed. During his real estate profession, he also taught for seven years.
Subtracting a personal wage from his revenues may have jeopardized his firm in its early stages. The same can be said for every real estate company in its early stages. You’ll undoubtedly struggle to generate a significant profit, much alone keep your firm viable, in the beginning.
The author did not take any chances. He didn’t leave his day job until his company was bringing in $2 million per year.
Lesson 3: Commercial real estate should be managed like a company.
Real estate investing is shrouded in legend. Once you’ve purchased a home, all you have to do is sit back, relax, and wait for the money to flow in.
Over hundreds of years, the legend developed. The aristocracy and landed gentry have handed down land down the centuries, pocketing the money they earn from tenants and hiring workers to administer their estates. Scammers have promoted the misconception that property can provide passive income via get-rich-quick schemes in recent years.
But there’s a catch: you can’t afford to remain passive if you want to maximize your investment earnings. Property should not be seen as a simple asset; it should be treated as a company and managed as such.
So don’t make the mistake of hiring a slew of intermediaries to manage your company. Any asset, portfolio, and property managers, as well as all contractors you engage, are financial outlays. Hiring someone to handle your money will only decrease your income.
You can prevent revenue-draining mistakes by handling everything yourself. Assume the role of evaluating and drafting lease agreements. Deal directly with brokers. Personalizing physical tasks, such as snow removal and gardening.
You’ll be able to grow income while lowering expenses by cutting out the middlemen, and you’ll be able to control your own destiny. In essence, you will have more money, which you may reinvest in your home, as well as more control over it.
Managing your first business properties on your own is a terrific idea since it will help you succeed in the future. You may achieve achievements that no property management firm can if you are committed to succeed and ready to sacrifice. Regardless of how wonderful a management firm is, its stakes will never be as high as yours.
Lesson 4: Find acceptable renters and slightly reduce their rent.
Without renters, you can’t prosper in real estate. Without the rent they give, your investment would be almost useless.
This presents two key questions: what is the appropriate rent to charge, and how should your renters be chosen?
To begin, refrain from attempting to extract as much money as possible from your renters. It’s preferable to charge slightly less than market rent than to ask for the most.
Overcharging often results in a range of negative consequences. If renters can’t pay your rent, for example, they won’t rent from you, and you won’t make any money if the building is empty. When a tenant’s contract ends, they’ll most likely hunt for a less expensive location, leaving you back where you began.
Setting rent slightly below market pricing, on the other hand, will have the opposite impact. Renewals will be in great demand, and their continuing occupancy will help you save money on marketing and turnover.
Additionally, if you keep your tenants’ overhead low, their companies are more likely to prosper, which is excellent for you since the more successful they are, the less likely they are to quit.
Two further criteria should be considered when determining how much (or how little?) to charge: who you want to rent to and how agreeable your new renters will be with your present tenants.
Take the case of older individuals who often rent from you. The tranquility of your property is appreciated by senior persons. If the flat becomes available, don’t rent it to a group of raucous college kids.
Renting out the neighboring shop of a marijuana dispensary to one of your tenants who owns a toy store would be a bad idea.
To create a harmonious atmosphere, all components must work together. Instead of irritating one other, tenants should praise each other. They must feel at ease at your home.
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Lesson 5: Align your company values with a non-monetary objective for your real estate investment.
Money does not equal motivation. Before you purchase your first house, ask yourself a few questions. What drives you to provide your best effort? Are you driven to outperform your competitors? You’ll need a lot of work, time, and tenacity to thrive in the real estate market.
What drives you to persevere?
Money is undeniably a potent motivation for most investors, and it fulfills their demands. However, the author is confident that money will leave you down in the end. Money is an alluring promise at first, but it will become less and less so as time passes.
Furthermore, real estate firms aren’t always lucrative in the beginning. You should have a non-monetary goal in mind when starting a real estate firm.
The following questions may assist you in determining your goal:
What makes you want to work in real estate? Do you like assisting others? Could you think that you’re assisting individuals in finding a place to live or work, and that your property would aid them and, by extension, the community?
After you’ve determined the goal of your real estate firm, it’s time to structure your corporate values around it.
As your real estate firm expands, you’ll become more concerned about your corporate values. They will not only affect employee choices and behavior, but they will also shape your company’s culture.
This is why it is critical to build and nurture them from the outset.
Excellence, inventiveness, and honesty, for example, are the author’s corporate values, and they’ve kept him and his team on course when things became difficult. Instead of being bogged down or burnt out, they continued to find their job relevant and pleasurable because of the company’s strong ideals.
Lesson 6: Keep your properties as long as feasible in order to develop and add value.
The author pondered liquidating all of his assets at one point. After all, they were all successful, and the prospect of cashing out enticed him so much that he explored selling with a potential buyer.
He eventually decided against it. But why?
He realized he had to stay the course if he wanted to produce enduring value. Increasing the value of a property takes time, particularly if the money to develop it are generated by the property itself.
Consider increasing the value of your home by updating the utilities. One of the first things you should do is insulate the water pipes to enable them to retain more heat and install water reducers on the building’s showers to conserve water and money.
Long term, this will save your company money (fewer expenditures = better net operating income), but it will cost you money in the near term owing to the cost of each improvement.
You must keep your property for a long time in order to optimize its worth. As a general rule, “a while” refers to around five years, however it might take much longer.
Furthermore, if you want to persuade a buyer to pay a premium price for your house, you must demonstrate its financial stability. They want to see your earnings history for the last two years. If you don’t do this, you won’t be able to justify a high property value.
If these justifications haven’t persuaded you, consider this: if you keep your property for a long period, you’ll save money on transaction expenses.
When selling a home, you should budget for transaction expenses to be between 5% and 10% of the sale price. That’s before you consider the high fees you’ll almost certainly have to pay a real-estate broker.
The capital gains from the property sale are likewise taxed.
To prevent all of these expenses, you should keep your possessions. As a result, you should wait until your company has grown to the point where selling it makes perfect financial sense.
The author made a fortune in real estate investment thanks to a mix of patience, a do-it-yourself mindset, and a hopeful outlook for the future. Begin by adopting a positive mindset, rolling up your sleeves, and putting your best foot forward.
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Final Thoughts
Real estate investment may help you become rich. It’s only a question of being cautious and adhering to specific guidelines. For your investment to prosper, you must approach it like a company rather than a passive investment. It’s also a good idea to save your assets for as long as feasible.
The most essential thing to keep in mind is to continuously be looking for methods to save money. The simplest approach to do this is to handle as many property-related issues as possible personally.
Additional Reading
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