The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful:
Passive investors can get started just like active investors, and that means learning all they can about the world of commercial real estate on their own. From textbooks, YouTube videos, and mentors, passive investors should build a strong foundation of knowledge regarding investing in the commercial real estate space. With this knowledge, passive investors will make smarter decisions and be less likely to be “spun” in any misguided direction.
Richard Wilson: What is the best way for a passive investor to get started in allocating real estate, and putting some money and work into the commercial real estate space?
S.L. Van Der Zanden: This is a passive investor. Obviously learning as much as you can on your own, from textbooks, and YouTube, and whatever. But really finding that guide whether, again, it’s a mentor, or a sponsor, or a lawyer, or your accountant that happens to know a lot about real estate. Whether you’re buying the real estate directly on your own account, or you’re buying through a sponsor and are owning a piece of it, you really want to – between the offering memorandum (OM), between that and what you do on your own should still be the same amount of information gathering. It’s just being passive, you have the benefit of having a team of people that were paid to put all this together, but you still have to read it, understand it, and be questioning whether what they’re telling you is the whole truth and nothing but the truth. Or they’re spinning it, right? Or they’re just not mentioning it because it can’t be spun.
But when you’re starting out, I just can’t overemphasize someone to help hold your hand, or you hold onto their hand, while you’re working through the first couple of times.
Richard: Right, right. I’ve heard that from many experts in this space.
