Wealth Opportunities in Commercial Real Estate: Management, Financing, and Marketing of Investment Properties

Acquiring the Skill Set to End the Cycle

Ideally, in order to break out of the cycle, you should focus on five areas. First, you need a basic understanding of accounting. Accounting is the language of business. This is not to suggest that you have to become a CPA, but an understanding that goes beyond college courses, a practical understanding, is helpful. Second, it is necessary to have an understanding of legal principles. Contract real estate law is a recurring element in real estate transactions. A lease, which is a binding legal contract between the landlord and the tenant, governs the economics of a project. Third, it is crucial to have a practical knowledge of real estate financing, since financing is usually 50 to 80 percent of a real estate transaction. Next, it is essential to understand the basic concepts of the field on which you are focusing. In real estate, it is important to have a grasp of basic real estate principles, for example, knowing the difference between a fee simple estate and a leasehold estate. It is necessary to be able to answer relevant questions such as, If the property to be purchased is a leasehold, what provisions must be in the lease to make it mortgageable? Lastly, you must know how to structure a transaction. This knowledge usually comes from a number of sources: experience, discussions with senior people in the field who have put transactions together, and studying Chapter 11 in this text!