Property for sale in Kenya: How to Start Your Overseas Real Estate Portfolio

Real estate is a tried and tested asset class and the majority of people agree that as a long term investment commodity there is nothing really to beat it for consistently returning strong growth and increasing yields…however, when a country's housing market goes temporarily cold as real estate prices move outside of the affordability gap, real estate investors often look overseas for the development of their property based portfolio.

Currently the real estate markets in countries such as the UK and US are slow and the ability to profit from property locally is reduced - therefore more people than ever are thinking about moving their focus abroad and starting an overseas real estate portfolio like investing in Kenya real estate to enable them to build a passive income for life.

If you would like to learn more about building a passive income for life from investing in overseas real estate here are the main five considerations to bear in mind to maximize profit, reduce risk, increase yields and capitalize on opportunities as they present themselves – but before we begin it is always prudent to mention that the value of any investment can always go down as well as up, and that investment decisions should be taken carefully and be made with the assistance of qualified and experienced advisers.

Tip One - Real estate markets around the world emerge, boom, go bust and re-emerge all over again, but they do so at very different points in time as each market is heavily dependent on the current state of the economy in the given country.  As we all know economies ebb and flow like the tide and there is no such thing as a guaranteed market where property prices will keep rising.  However, there are countries in the world going through major economic change where the real estate market is emerging and where the long term forecast is for a period of prolonged growth.  An investor who is not risk averse and who is planning an overseas real estate portfolio should try and identify which countries have a strengthening economy and an emerging real estate market.

Tip Two - Having found an emerging market an investor needs to determine the key factor that makes an investment into real estate in the given country a good decision.  I.e., if a country's property market is simply booming because of hype and an investor can see nothing to support the long term success of the market then they should walk away.  If an investor can see massive room for growth but an interfering government who may attempt to restrict property investors from taking their profits then an investor has to decide whether or not they can still make enough profit from real estate to make any investment worthwhile.

Tip Three - Having determined that there is potential within a given market an investor needs to learn how to harness the power of other people's money!  As real estate is an expensive and slow to liquidize commodity it is unwise to pay cash from personal funds for an investment property, rather it's wise to raise finance at a low interest rate from a secure financial institution.  An investor should look into whether an international mortgage or a local mortgage is possible and affordable when buying overseas real estate.

Tip Four - As previously stated, over the long term real estate is considered by many to be one of the most consistently returning asset classes – the key to this consistent success is however the 'long term' bit!  I.e., when buying real estate abroad for capital growth and rental yield it pays to be able to keep that real estate for ten years or more to ensure the greatest reward is derived from the investment.

Tip Five - And finally, having determined that the key factors exist to suggest that a property market has legs to run and that any hype surrounding its progress is based on fundamentally accurate facts as detailed in Tip Two, an investor need to ensure they buy real estate that will suit the market demand that is making the real estate market successful!  Therefore if the baby boomers are driving a given market consider buying single level properties in secure communities, if on the other hand the young professionals are driving the market think about purchasing well located, designed and facilitated apartments. 

Get more tips on www.kenyan-real-estate.com

Kenyan Real Estate: How to Start Your Home Construction Project

You are going to take on a home construction project you need to know exactly what you are doing. By making sure that you know the details before you start, you will be ensure of ending up with a result that makes you smile.

The first thing to consider before you start a home construction project is how much work is going to go into it. This is an important step because if you underestimate the amount of work that is involved, you may end up getting yourself in too deep. You can estimate the amount of work by simply breaking the project up into sections. Determine the amount of time and labor that each separate job will take; this will give you a great idea as to how difficult your home construction is.

After you have all of your details figured out, you will then want to determine the budget for your home construction job. One of the best reasons to take on a home construction job without a professional is so that you can save money. Make sure that you can buy all of your supplies, and cover your time with the amount of money that you have allotted to the project.

When you are finally done with the planning stages, you will be ready to start building. The first thing that you will need to do is head to the appropriate store in order to buy the supplies that you will need. Remember, shopping for supplies for a home construction project is just like anything else; if you search around long enough you will be able to find a price that you can afford as well as the materials that you are in search of.

After you have purchased all of your supplies you can start the actual labor process. Make sure that you have a timeline set out so that you know the appropriate steps to take as you are progressing through your home construction job. By knowing where you are going, you will be able to gauge your progress while also staying on course so that you can meet your target completion date.

A home construction project does not have to be full of stress and hassle. In fact, if you set out all of your details and follow a timeline, you should be able to have a fun time during the entire project.

More details are available in www.kenyan-real-estate.com

How You See the Problem Is the Problem: Kenyan Real Estate

No real estate investor ever gets beyond the reach of problems.  Every investor faces personal and professional problems.  The problems come in all shapes and sizes.  They can be business-related, financial, physical, or emotional.  Although no one escapes problems, your perception of the problem will determine your response to the problem.

Unfortunately, no one has a magical formula to deal with them.  You can, however, implement certain principles to help you succeed.  At first blush, these principles may seem over simplified, but don’t underestimate their power.  If you choose to use them, you’ll reap a harvest of achievement that will far surpass your efforts.  Here’s five ways to solve your problems.

1.    Be Responsible. 

When something goes wrong, when you have a problem, it is only natural to think immediately of who made it go wrong, who is to blame for the problem.  Most often this makes the problem worse.  The person blamed, in order to exonerate himself or herself, promptly finds someone else to lay the blame on or with whom to share the responsibility for failure.  It frequently turns into a shouting match of exchanged accusations.  "It's all your fault....  "You did....."  "Yes, but you said....."  All too familiar dialogue, isn’t it?

Don’t blame your problem on others.  Accept responsibility for your actions.  It’s not what happens to you that matters.  It’s your response to what happens to you that matters.  The consequences of your actions and choices are yours.  Choose wisely.

2.  Be Proactive. 

The worst thing you can do when dealing with a problem is nothing!  The world is full of people with great intentions.  Take action.  Successful investors are not necessarily those who make the right decisions all the time when trying to solve a problem.  No one can do that.  But once you have made a decision to do something, you will begin to attract the people and things you need to conquer your problem.

Your ability to attract the people and things with the right solution may not make sense to some of you.  Honestly, I don’t fully understand it myself, but it works for me and it will work for you.  I really don’t understand how a black cow can eat green grass, and produce white milk and yellow butter, but it happens.  I don’t understand how it happens, but that doesn’t keep me from having butter - and I have the waistline to prove it.  So don’t let your lack of understanding sabotage your willingness to solve the problem.  Take action.

3.    Re-Act.

 Take charge over your inner-voice. Something in all of us wants to do what's convenient rather than what's necessary.  It’s easier and so natural to be negative rather than positive. The voice inside you will tell you why you can't solve your problem and why you don't deserve to solve it.  You cannot solve your problem without some change in your perception of the problem.

So how do you change your perception?

Change your thinking and change how you act.  As simple as it sounds, changing your attitude toward the problem will change your perception of the problem.  A change in your perception will trigger a change in how you act.  So you will solve your problem by re-acting.  That is, acting differently.  In a positive way, of course.

4.    Believe in yourself. 

Sometimes you are your own biggest problem, when you allow your fears and self-doubt to stand in the way of your success.  A critical step to conquering a problem is to realize that the answer lies within you. Maturity and experience will give you the confidence that you can overcome any impediment.

 Problems are an asset   Problems are character builders.  Improvements I’ve made in my life and in my business were the result of problems.

 5.  Wear Your Knees Out.  If there were one sustainable remedy I could offer you when the going gets tough, it would be prayer. Many people, depending on their faith, might call it meditation. It doesn’t matter to me what you call it, as long as you have a place to run to. Mahatma Gandhi said, “Religions are crossroads converging upon the point.”  Well, I don’t often discuss religion, and I don’t know what works for you; but Christianity is the way I know. However, I am sensitive enough to respect your faith. My whole point is that when everything else fails, prayer works!

A problem can become your breaking point if you let it become the one thing that defeats you.  Alternatively, a problem can become your turning point if you choose to take action to defeat the problem.  You will never realize what heights you can reach in real estate investing or in your life until you stop blaming reality for what happens to you as you go through it.

Thomas Paine said, “The harder the conflict, the more glorious the triumph. What we obtain too cheaply, we esteem too lightly; 'Tis dearness only that gives everything its value.” In the thick of the fight to overcome a problem, you may not believe it, but the more problems you conquer, the easier the process becomes. Your confidence will be self-perpetuating, and you may come to believe you can conquer a whole range of “mountains.” 

For me exciting and educative hint on real estate visit www.kenyan-real-estate.com

How to Use Home Mortgage in Kenyan Real Estate Investment

Investment mortgage, as it is generally called, is the mortgage that is invested in real estate property – either residential or commercial. You can find mortgage lenders, who are ready to provide real estate investors with money. Though applicable for both residential and commercial properties, mortgage lenders see residential property as ‘safer’. The collateral here is the home. The secure feeling by mortgage financiers can be the feeling that no one is likely to make default on payments on a loan, taken with their dwelling place as collateral.

Investing in real estate is always a good option. 

You can either make an initial investment on a home that you would rent out for a few years and sell the property, once the value of the property makes considerable appreciation. If you prefer not to sell, you can also use the appreciated value to take additional mortgage loan, which you will invest in yet another property. This is the usual strategy. The key here is to find a mortgage that requires you to pay little to no prepayment fine. You close the loan when there is considerable capital appreciation and sells it off after taking your profit.

Since you are not a seasoned Kenya real estate investor, doing business with a mortgage lender for a long time, you need to shop for lower cost mortgage loans. Of course, the first thing in this regard is your credit score. Once you are found eligible to get a home mortgage for considerably low interest rate, you can start your investments in real estate. It is not actually a big deal to find a mortgage to make an investment on a home or commercial property.

It is always a good idea to go through a critical analysis of the possible appreciation of the property on which you look to invest. You need to repay the mortgage and still carve out a profit out of it.

You can start investing in Kenya real estate, even if you have bad credit score. Your low income or lack of financial support too doesn’t prevent you from creating wealth out of real estate property that you buy on mortgage. For the first time, don’t put your eyes on the success levels or strategies of big guns in the field. You are starting out as a newbie – make your small investments, and separate your profits. Soon you will find what works for you.

The safest route will be to put your eyes on capital appreciation, consider renting out as a second option only. Hold the winners and drop the losers – better still, don’t ever catch a loser. 

Get more like this on www.kenyan-real-estate.com

How to Use Equity to Your Advantage: Investing in Kenyan Property

Once you have purchased a home and are making monthly payments, you are in the process of building equity. The opportunity to use the equity you have built up in your home is one of the benefits of home ownership.

The equity you have built up can be used for many purposes on your advantage. Many people will use this equity to draw out cash by refinancing their house; the cash may be used to finance other major purchases such as second mortgage, making major improvement to your property or to fund their children educational expenses.

If you are in bad debt situation, your equity can be the hero in saving you from bankruptcy. You can pledge your equity to apply for a home equity loan which will allow you to borrow a relatively large amount of money to consolidate your debts. As compare to other personal or unsecured loan, a home equity loan is easier to get approve even you are in a bad debts situation; lenders may be more liberal because they view home equity loan as relatively safe. You can disappear with your house or hide it if you default on your loan, so the lender has a good chance of collecting the collateral.

Besides using your equity for bad debt consolidation while investing in Kenya property, you may use it for other high-interest rates debt consolidation. One of the advantages of home equity loans are they typically have lower interest. And you could you this advantage to consolidate all your high-interest monthly payments into a single loan which had a considerably lower interest rate.

Typically you are allowed to refinance up to 75%, (sometimes 80%), of the value of the property on conforming loans whereas on jumbo loans you are limited to 70% of the property value. For example, if your home is now valued at Kshs.13, 500,000 and your loan balance is kshs. 6,300,000, you might be able to get a new Kshs.13, 500,000 x 75% = Kshs.10, 125,000 mortgage. That would allow you to repay the existing Kshs.6, 300,000 balance and use the kshs.3, 825,000 for your financial needs.

Another possibility to use the equity to your advantage is home equity lines. Many lenders offers home equity lines for homeowners and allow them to draw cash advances with their credit card or write checks up to certain credit limit.

Before using a home equity loan or home equity credit line for any purpose, you should be aware of the pitfalls of these loans. The main thing is that you can lose your home if you fail to meet the payment schedule required by the loan. Therefore you need to consider it carefully before do a cash-out with your equity. 

Get more enlightening information like this on www.kenyan-real-estate.com

How to Use Comparable Sales to Determine the Current Market Value of a Kenyan Property

When assessing the value of a property, many investors and other commercial property buyers look at comparable sales to determine the true current market value of a property. The comparable sales can show you exactly what properties are selling for, not just the asking price. If you know three or four properties of similar characteristics sold for about the same amount, then you can determine what the value of your property is. Don’t ever just look at the asking price, as it can be as far off as the owner wishes. He or she may be dreaming in regards to what the Kenya property is really worth!

Comparable sales, or comps, are the properties that have sold around the subject property that are zoned identically, and are about the same amount of acreage. It also helps if the comparable sales are from properties that have similar uses.

Comparable sales may not always be the most accurate for your specific property. They could be from many years ago, may not be of similar use, many not have the same characteristics such as the availability of utilities, or may not have a comparable amount of road frontage, or could be a considerable distance from the subject Kenya property.

In order to get around this problem, you must use the closest properties that you can. You simply adjust the price according to the changes in the market or property characteristics.

For example, if a comparable sale was from 2001, and the current year is 2006, then you can adjust the price according to the appreciation the overall commercial market has experienced in a specific area.

Or, if the subject property has a total road frontage of 200 feet, and the comparable sale property has frontage of 1000 feet, you can adjust the price or value appropriately.

As you can see, finding the true current market value of a property can take some investigation and adjustment in relation to the properties that have sold in the past. The more recent and similar the comparable sale is, the easier and more accurately you can assess the true value of the property.

It is a good idea to collect as many comparable sales as possible and take inventory of each. What are the characteristics? What are the uses? Assess each one individually and then group them together to determine an overall consensus. You should be able to determine the current market value at this point. The more properties you have to pool from, the more accurate a number you will have.

Very often brokers or agents supply you with comps from the area of interest as part of the service of selling the subject property. If you are not familiar with the area, you must be leery of the comps that they send you.

I have received comps of properties in the most affluent areas for a subject property that was positioned in a lower to medium class area which completely misrepresented the true market value of the property. Unless I had investigated further and asked many questions, I could have easily taken this property as a true comparable sale, and would have expected a far greater return than what I really would have experienced.

Unfortunately, as much as you want to trust the information that you are given by a source, you must always perform your very own investigation because brokers and agents are there to sell their properties. Many of them are honest and will do the best they can to give you the most accurate information. However, there are those who will dupe a buyer in order to sell the property and receive their commission. It is important to be aware of these tactics. Although we don’t like to admit that they happen, they most certainly do.

Comparable sales are really the only way you can determine the true value of a property. It may take a comparable from another city, or even county of identical characteristics to determine the most accurate value. If necessary, ask a trustworthy broker or agent for assistance, as they will know their market inside and out, and be able to point you in the right direction as to what the property is really worth. Get two or three opinions in order to validate any information you might receive. 

Browse through our main site on www.kenyan-real-estate.com

How to shun Land Scams in Kenyan Real Estate Sector

Here some of the scams that recently happened in Kenya wherein undeveloped or a land that has no title was sold to investors. To avoid such land scams we provide here a list of precautions one should take before Investing in Kenya land.

Tips to avoid being a victim of Land Scams

1. Beware of high-pressure tactics.

Say "no" to any person who presses you to make an immediate investment decision. You need time to do your own research. Any ethical salesperson will understand this.

2. Exercise particular caution if you lack financial experience.

It's easy to feel intimidated and overwhelmed by complicated financial slang, but resists the impulse to turn it over to "the expert." Ask lots of questions and insist that the salesperson explain the land investment in everyday language until you understand it. Protect yourself by educating yourself.

3. Keep in mind that good manners don't indicate personal integrity.

Con artists are generally extremely polite, knowing that many of us equate courtesy with personal integrity. Swindlers are also counting on your good manners to keep you from cutting them off. Don't let your good manners land you in trouble; simply hang up if you don't like the conversation.

4. Watch out for salespeople who prey on your fears.

It is common for swindlers to pitch their schemes as a way to eliminate your financial fears for the future. Remember: fear and greed can cloud your good judgment.

5. Exercise particular caution if you are an older citizen.

The elderly, and particularly older women, are a frequent target of scam artists. Always seek the advice of a neutral party before investing in land.

6. Monitor your investments and ask tough questions.

Insist on regular written reports and look for signs of excessive or unauthorized trading of your account. Constant vigilance is a vital part of being an investor. If you suspect that something is muddled be very careful and take full precaution and consult a solicitor.

7. Report land investment scam or abuse immediately, despite any embarrassment or fear you may feel.

The sooner you report fraud or scam, the better your chances of recovering some or all of your investments.

8. Beware of "reload" scams.

Investment losses often create a panic well-known to con artists who have developed schemes to take a "second bite" out of investors. To recoup their losses, victims some-times invest in another scheme (a "reload") in which the con artist promises to make good the original loss--and may offer new higher returns. Often the result is only more losses. 

Visit www.kenyan-real-estate.com for more.

3 Bedroom Apartment in Nairobi West, Kenya

How to Find a Good Kenyan Real Estate Investment Property

There are many ways in which you can find a great property for your Kenya real estate investment. The problem lies in the fact that many would be investors aren't exactly certain what specific types of investment they wish to make. Unfortunately, the type of investing will greatly affect the type of property that will best suit your Kenya real estate needs. This article focuses on finding a great property for the purpose of flipping or rehabbing a property.

Seek Bargains

This is absolutely a necessary step when it comes to finding properties with excellent potential as flipped properties. Bargains are often sold at bargain prices for a reason. The good news is that many of these reasons are purely cosmetic and quite simple to fix. Finding a realtor that is willing to work with you for lower prices, bargain properties offer an excellent place to begin. If he or she is a knowledgeable professional you should have access to properties that would have been unavailable to you had you continued the search without the assistance of a professional.

Another great place to find bargains of this nature is to search through foreclosures, auctions, and homes that are preparing to enter into foreclosure. While not always the case, there are many in these situations that are willing to be a bit more flexible with the price. Never offer full asking price first. Start low and negotiate up. This may lose some properties but in the end it will be a much more profitable venture if you can get the properties you want for a smaller investment.

Know the Neighborhood

Before placing a bid on a potential property for flipping you need to learn as much about the neighborhood as possible. You do not want to place a family home in the middle of a retirement neighborhood, nor do you want to place a potential bachelor pad in that type of area. You also want to avoid areas that are entering a state of decline, as the rehab efforts are unlikely to achieve the profits you are hoping to receive. Instead, look for bargains in areas that are approaching some sort of renewal or have very low crime and excellent growth potential.

If you are rehabbing a home that is meant to appeal to families make sure the neighborhood is safe, has a relatively low crime rate, access to good schools, and entertainment opportunities that may appeal to families. These things will affect the price you are likely to be able to expect once the rehab efforts have been completed as well as the type of renovations you will need to perform on the property. Buying a property in an area that you know nothing about is like buying a property without an inspection-which brings me to my next point.

Get a Thorough Inspection

This is one of the most important steps in the process of selecting the perfect property for your real estate investment needs. A qualified inspection will prepare you for any problems that may arise during the course of your work on the home. These are things that will affect the amount of money you should offer on the home, the amount of money you will need to invest in repairs, and the amount of money you can expect once all is said and done.

Failing to have a complete and proper inspection can lead to disaster when the renovations begin costing extra money and time as efforts are undone in order to get to the root of the problems as you go. There are very few things that can save you the time or money that having a decent inspection can manage to save. Inspections can also make you aware of any structural problems, code problems, and other problems that may mean the difference between this property offering a possible profit or a probable loss. It is much better to be armed with this knowledge before ever making an offer on the property in question.

Realize that you do not need to buy the First Property You See

This is an important thing to remember. If the first property doesn't speak to you, move on until you find one that does. This process is part science and part inspiration. If you are uninspired by a property it is unlikely that this property will suddenly take on a life of its own in order to suit your real estate investment needs. Keep searching until you find the property that meets all of your needs in order to find the perfect property for your first or your fiftieth flip. 

Get more like this on www.kenyan-real-estate.com

3 Bedroom House in Wetlands, Nairobi, Kenya

2 Bedroom Apartment in Mombasa, Nairobi, Kenya

4 Bedroom House in Nairobi West, Kenya

3 Bedroom House in Vipingo, Nairobi, Kenya

Properties in Kenya – Should You Consider Purchasing One

Properties tend fall into the love them or hate them position for buyers. Here’s primer on properties.

Apartments

Apartments are all about communal living, which can be good or bad depending upon your personal views. This type of communal living doesn’t refer to the failed experiments of the sixties wherein hippies packed into a structure and shared everything. Instead, the modern Apartment community is all about sharing common spaces as well as rules, rules and more rules.

Apartments come in all shapes and forms. Apartments can be found in a single high rise building in a downtown area or in an apartment complex type of layout in a planned community. The structure isn’t the determining point. Instead, the issue is how the properties are owned.

Unlike a stand-alone home, the property lines on an apartment are the walls of the structure. Essentially, you own everything inside the Apartment as your individual property. Everything outside the apartment is owned jointly with the people who own the other units. These areas are known as common areas and are subject to group rule.

Every apartment has a homeowners association in one form or another. The association has rules set out by the original developer regarding landscaping and so on. Members of the community are then elected to the board of the association, whereupon the immediately become a focal point of aggravation from individual owners and often wonder why they took the thankless job.

The problem with the association and apartments in general is the issue of uniformity. If you desire to change the exterior of your apartment in some way, you must comply with the rules of the association. This means you cannot paint your property a different color, do landscaping and so on. For some people, this isn’t a problem, but others are frustrated they can’t express themselves.

When deciding whether an apartment is a good option for your next purchase, you need to carefully weigh the restrictions of a particular association. If you consider yourself an individual and want to show it, an Apartment is probably a very poor choice for you.

 Visit www.kenyan-real-estate.com

2 Bedroom House in Langata, Nairobi, Kenya

2 Bedroom House in Karen, Nairobi, Kenya

2 Bedroom Apartment in Karen, Nairobi, Kenya

Pick a Category of Kenyan Real Estate You Want To Own

Becoming a commercial real estate market expert is all about focus.  An important part of being successful in this business is focusing on a type of income producing property you want to acquire.

This strategy sounds simple until you start looking at the available properties, and your mind starts to think about all the possibilities.

Stop--this is a strategic mistake.  It will cost you big time if follow through with it.

Why?  Because the commercial real estate investors that do well focus on a specific type of income producing property.

Successful commercial real estate investors aren’t distracted by the money burning a hole in their pocket.  They are discriminating.  They want to fully understand whatever type of property they focus on that it is a good deal, perhaps a great deal.

And the only want to do that is to do your homework.  To do your research and due diligence. 

Admittedly, this is hard to do especially when the pool of available deals is overwhelming large that your eyes get really big, OR when there are slim pickings at the time and you start to wonder where the good properties are.

It is vitally important to stick to the strategy.  Pick a type of property and learn all you can about this type of property. 

Types of Commercial Real Estate

Now, if you are new to the commercial real estate game, you may be thinking all commercial real estate is the same.  They are not.  Let’s start with the 10 types that are available:

1.         Retail Space – Shopping Malls, Strip Plazas, Free Standing Retail Stores.

2.         Office Space

3.         Hotels and Motels

4.         Multi-Family Dwellings such as Apartments and Condos

5.         RV Parks

6.         Mobile Home Parks

7.         Industrial and Manufacturing

8.         Warehouse

9.         Mixed Use Property

10.       Raw or Agricultural Land which can be developed

Pick one, or at most two of these categories of commercial property and focus on them exclusively.  Learn as much as you can about them within your market.  Dig, really dig.

Remember what I said in my previous article—become an expert, an authority… a specialist.

Make this type of property your passion.  Join a group, club or association and start mingling with people who are just as passionate about this type of income producing property as you.  You’ll find no matter which one you focus on, there are people who have made a successful career of investing in that type of property.

Now, one question I am asked of people who are new to commercial real estate investing is this:  What’s the best type of property to focus on?

My answer is raw land or agricultural land that can be rezoned.  Why?  Because while the challenges are many, the profit upside is huge. 

So in closing, while there’s opportunity everywhere, it will pay to remember the words of the Zen monks:

“He who tries to catch two rabbits, don’t catch any.”  Focus on specific type of property and give it all your attention. 

For more go to www.kenyan-real-estate.com

2 Bedroom Apartment in Kilimani, Nairobi, Kenya

1 Bedroom House in Laikipia, Nairobi, Kenya

1 Bedroom House in Laikipia, Nairobi, Kenya

Land property Kenyan Investment Strategies

One of the strategies commercial Kenyan Real Estate investors like to employ is hiring consultants or market research companies to analyze a specific market a commercial real estate investor wants to pursue.

To a beginning investor, the overall strategy seems logical and well-intended.  Who better to know a market than the analysts who spend their days and nights collecting, analyzing and reporting on such data?

I’ll tell you:  YOU—the commercial real estate investor.

There is no substitute for doing your own research.  There is no substitute for keeping your own counsel.  There is no substitute for doing your own homework.

Why?

Because it’s YOUR MONEY that will ultimately be spent.  It’s YOUR bank account that will ultimately reflect the success or failure of a commercial real estate endeavor.

Too many well-meaning beginning real estate investors think they don’t have what it takes to do the homework required on a market.  Too many well-meaning investors yield their analysis people who supposedly know more about the subject than they do.

This is a costly strategic mistake.

I have nothing against market research people or consultants.  I have no axe to grind with them.  They are extremely competent, thorough people who provide a valuable service. 

My issue is with HOW they are used by the commercial real estate investor.

The challenge is when an investor trusts their judgment--more than his or her own.  Many times an investor will be in awe of their command of the information, specifically statistics.

The reason I say this is because I have seen many a real estate investor unwittingly fall victim to this process.  It’s very easy to find yourself yielding to a “professional’s” opinion based upon research which you have paid handsomely for.

Don’t.  It is a mistake that will cost you later on.

Look at it this way:  Let’s say you want to invest in the stock market and you use the services of a stock broker to recommend a buy.

Do you really believe that the stock broker’s goal is for you to make a wise and carefully thought out purchase?  Do you really believe their recommendation has been thoroughly researched and analyzed?  Forgetting the self-serving aspects of the commission he makes selling you a stock, would you really want to trust him with your investment portfolio?

My guess is probably not.

So what the proper way to use these market research professional?  There three common ways which these professionals are valuable to the commercial real estate investor:

1.    One is as a way to flush out new ideas and do homework and research “heavy lifting” which need done that the investor doesn’t have time to accomplish  on his or her own.  The investor know exactly the information he is after.

2.    The second strategy is as a way to confirm the findings which the investor already believes are accurate.  In other words, the investor is looking for a second opinion before he commits more resources to the project.

3.    The third strategy is very interesting:  Some investor will use professional resources to poke holes in their strategy.  To find the fatal flaw.  To find “the fly in the ointment”.  The investor will never admit this to the professionals, yet he wants to know all the reasons the deal won’t work.

You’ll notice one thing in common with these three strategies:  The investor will always do his own research.  It’s a critical aspect of success—one that should never be delegated. 

Please visit www.kenyan-real-estate.com for more hints.