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.

Kenya Real Estate - Pleasant Nyanza Escape

Kisumu is close to all the major attractions in the Nyanza and western region of Kenya, but has much to offer on its own. If you’re looking for a little peace in the Nyanza and western Kenya, Kisumu real estate is a good option.

Kisumu

With a colonial history, lake towns and little lakeside villages, Kisumu is a classic County. Unlike its neighbors, Kisumu tends to be less populated and have a bit slower pace of life. Sitting close to Kakamega County, Kisumu is a popular relocation spot for people working in the city, but trying to avoid the population crush.

Nairobi

The capital of Kenya, Nairobi is a modern city and considered the insurance company capital of the republic of Kenya. With such a title, you might think Nairobi isn’t exactly a vibrant city. Unfortunately, you’re correct. There isn’t much to recommend the city if you’re looking for nightlife or outdoor experiences. Real estate prices, however, are reasonable for the Eastern Africa and it is a relatively short trip to more vibrant locations.

Mombasa

Unlike Nairobi, Mombasa is town with a ton of culture. Located on the Indian Ocean board, the town has a strong Ocean faring history and takes pride in it. With colonial architecture, the city is bursting with color as the leaves turn in the fall. A classic Ocean port, Mombasa celebrates the history with maritime museums, classic whaling schooners and as pleasant a group of people as you will ever find. You can even order Kshs.50 local beers in a few of the local taverns. Admittedly, the glasses are very small, but Kshs.50 is Kshs.50!

Kisumu Real Estate

Kisumu real estate prices differ greatly from location to location. Generally, the closer the location is to Nairobi, the higher the prices. A single-family residence in Nairobi will set you back Kshs.6,250,000, but prices range from the low Kshs.5,000,000 to over Kshs.100,000,000 throughout the state.

On a positive note, Kisumu real estate has a strong growth pattern. 

Kindly visit www.kenyan-real-estate.com for more interesting hints.

Kenya Real Estate Property – Hard, Hard, Hard Money Loans

Financing for commercial real estate is a completely different game when compared to residential mortgage loans. It moves much faster and is much more flexible.

Commercial Real Estate – Hard, Hard, Hard Money Loans

When purchasing commercial real estate, financing is the most significant factor in determining whether the project is worth pursuing. Although there are a variety of commercial real estate loans on the market, we are going to look at hard money loans in this article.

Hard money loans for commercial real estate are often a matter of last resort. They aren’t good deals, but they can save a financing situation that has gone critical. Most hard money loans come with significant upfront costs and astronomical interest rates. When you are facing the prospect of losing a commercial property, however, they can be a godsend because they also are granted very quickly.

Hard money loans are considered very risky and are issued by private financing groups, not banks or lenders. The loans tend to be only available as the primary loan on the property, which isn’t that rare a situation in commercial property.

Unlike home loans, hard money loans are all about the potential sales price of a piece of commercial real estate. The party considering lending you money is not going to look at the appraised value of the property. They are going to look at the probably sales price if the commercial real estate has to be sold a few months after making the loan. Depending on the condition of the property, this figure will typically be between 50 and 75 percent of the appraised valued of the commercial property.

Put another way, a hard money loan is a short-term loan designed to get you past an immediate problem. It is undeniably a loan of last resort and is not an ultimate solution to a financing problem with a commercial property. It does nothing other than buy you time, and at a fairly hefty cost.  If you are in a tight spot and can resolve the problem with a few extra months’ time, a hard money loan may be the answer. 

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