The secret to unlocking the power of passive commercial real estate investments is to buy only cash flow positive deals.
In fact, how many deals do you see out there where sellers seem to have these unrealistic prices? They tell you that all you have to do is see the “potential” in the property to realize that the above value price they’re looking for really is a discount when you consider all of the “upside” the opportunity has to offer.
There’s usually so much “upside” that you should be willing to buy the property at a negative cash flow and then invest more money to realize an even higher value. But when you do the math, you conclude that the seller’s really trying to get you to pay for work he hasn’t done, offering you the promise of tomorrow’s profit while asking you to pay him for it today.
Enter the positive cash flow deal. These days, positive cash flow opportunities are few and far between, and the ones that do exist, are typically sold on proforma–translated as more promises of tomorrow’s profit. So what you should be looking for today are deals that offer actual numbers that allow you to close on a deal one day and be depositing cash into your checking account the next.
Don’t buy negative cash flow unless you are 100% positive that you can turn that vacant space into positive cash flow, fast.
By the way, where should we send your free 10 part email mini course? It’s 100% commercial real estate investing focused and you can get it here.