Fund Your Dream With Real Estate
We weren’t taught how to conquer the financial system. Immediately after graduating, we hit the ground running, looking to secure a job that would provide us with the income we needed. Being financially stable comes with learning how to receive different forms of income. Multiple streams of income, financial freedom and the knowledge it takes to acquire them can be passed down for generations. Investing in real estate is a great way to finance the life you want; we had the opportunity to talk to Colby Kay, ICON Commercial Realty about how you can make your dream life possible through real estate. Colby is the Senior Vice President and Supervising Broker at ICON Commercial, an umbrella of the ICON Realty Group.
Generational wealth by way of real estate is possible for many people to achieve; yet, due to our lack of education in general with personal finances, many people don’t even know where to start when it comes to acquiring real estate. What is it that realtors do for their clients?
Colby: Realtors take all of the headaches from your buying or leasing experience. It’s interesting because that question is commonly asked. We are constantly working behind the scenes, from negotiating conversations to making sure that our client gets pre-approved, educating our clients, and paying attention to the business side of things so that the client can pay attention to what they want and like. There’s a lot that happens, so the fact that you have to ask that question is good because that means your realtor is doing their job. On the commercial side, we’re making sure you are meeting your goals. Looking at numbers, if it makes sense compared to your goals. Commercial real estate is all about your investment, and we are numbers-driven.
Why choose a realtor with a commercial real estate background?
Colby: In all aspects, you need representation. Speaking of commercial real estate specifically, I would say you need representation more than you do in residential. It really comes down to having a solid foundation. You must have that solid foundation when it comes to leasing and your business. Why is that? When we educate our clients, we tell them that if you’re looking at leasing, that lease will be the foundation of your business. If that lease is shaky, then the foundation of your business will be shaky. The foundation of your business is the lease of your business. If you build something on a shaky foundation, it will fall, and in the business world, fall means fail. If you do not have a solid lease that has you in mind as the business owner, you will likely be on a shaky foundation, and it’s not going to work.
Having proper representation in terms of a realtor can help you determine what options are secure. For prospective homeowners, simply knowing your interest rate is not enough to make an educated decision on a loan or buying real estate. When you get into a contract, you need a professional. From a realtor standpoint, should we stop buying real estate because interest rates continue to go up?
Colby: It’s important to keep in mind that interest rates are still way below historical rates in the past. When you are buying real estate, especially commercial, you cannot be influenced by the negativity of the news. You also can’t be influenced by what other people are doing, whether buying or not. Simply put, you can’t be swayed by the pack. When looking at and analyzing commercial real estate, you have to look for what your goals are and what you want to achieve. Interest rates are historically lower than they have ever been, so we don’t look at that.
Interest rates are a factor, and we look at that as part of the deal. However, you have other aspects of looking at commercial real estate. I always tell my clients that you make your money on the purchase. If you purchase wrong, you made a bad deal no matter the interest rates. We need to evaluate and make sure your ROI or return on investment is where you want it to be and not where the news says it should be. We are designing a strategy for your goals, specifically your goals in mind. Yes, if the deal makes sense to you, purchasing real estate is always in play.
One way that we can establish wealth is through obtaining property. My philosophy is that every person should own at least two properties in their lifetime; that is one code of conduct. I make sure my family and children understand the importance. Why is adding a second property a good investment?
Colby: It makes sense to diversify your investments, and historically, real estate is always trending up. Having real estate in your portfolio is always important. One reason is leverage. When it comes to purchasing real estate, you can borrow funds from a lender to purchase an investment property instead of covering the entire purchase price yourself. Real estate is one of the few places you will find you have that kind of leverage. Having a broker who can follow the trends, knows the area, and has studied the area is important because you have a greater possibility of achieving some of the equity you want.
We can’t thank Colby enough for his wonderful insight into the importance of real estate and having a realtor that can represent your needs. If you buy and hold real estate, you can earn monthly cash flow renting it out or use it to supplement your retirement income. Acquiring real estate properties is an investment that can lead to generational wealth.
