How to Get Started Investing in Commercial Real Estate

 

How to Get Started Investing in Commercial Real Estate

Commercial real estate (CRE) is one of the most reliable ways to build long-term wealth. It offers steady income, appreciation, tax advantages, and diversification beyond the stock market. But for new investors, knowing where to begin can feel overwhelming.

 

Here’s a practical, beginner-friendly roadmap — including insights inspired by experts like Jessie Eagen of Eagen Real Estate, one of Montana’s most trusted commercial real estate professionals.

 

1. Learn the Fundamentals Before You Invest

Commercial real estate behaves differently from residential property. Lease terms are longer, tenants often pay more of the operating expenses, and values are tied directly to the income the property produces.
Spend time understanding core concepts such as:

• Net Operating Income (NOI)

• Cap Rates

• Cash-on-Cash Return

• Vacancy risk

• Triple-net vs. gross leases

Getting familiar with these basics will help you confidently evaluate whether a property is performing well and whether it meets your investment goals.

 

2. Clarify Your Investment Strategy and Goals

Before looking at properties, define what you want out of commercial real estate.
Are you seeking steady monthly cash flow? Long-term appreciation? A mix of both?
Do you want to be hands-on or prefer more passive ownership?

Common CRE strategies include:

• Core: low-risk, stable properties with strong tenants.

• Value-Add: underperforming properties you improve to increase cash flow.

• Opportunistic: higher-risk plays like development or major renovation.

Knowing your comfort level helps determine which opportunities fit your financial plan.

 

3. Work With a Knowledgeable Local Expert

Commercial real estate is a hyper-local business. Neighborhood trends, zoning changes, tenant demand, and emerging developments all influence a property’s performance.

Professionals like Jessie Eagen, who has spent years advising investors and analyzing Montana’s commercial markets, help new investors avoid costly mistakes. A skilled broker can identify strong opportunities, explain local trends, and uncover off-market deals that never hit public listings.

 

4. Understand Your Financing Options Early

Commercial loans involve different terms and requirements than residential mortgages. Down payments are typically larger, underwriting is more rigorous, and lenders focus heavily on the property’s income.
Before you pursue a deal, talk with a commercial lender or mortgage broker so you understand your buying power. Being financially prepared allows you to move quickly when the right deal appears.

 

5. Conduct Thorough Due Diligence

Even the most promising property requires careful investigation. That includes:

• Reviewing income and expense statements

• Examining leases and tenant payment history

• Inspecting the building’s physical condition

• Understanding zoning and permitted uses

• Evaluating environmental concerns

• Modeling future cash flow under different vacancy scenarios

A disciplined due-diligence process protects you from overpaying or inheriting hidden problems.

 

6. Start Smaller or Reduce Risk With Partnerships

New investors don’t need to begin with a large office building or big-box retail center. Many start with:

• Small multifamily properties

• Mixed-use buildings

• Smaller office or retail spaces

• Partnerships or joint ventures

• Passive investments through funds or syndications

These options lower the barrier to entry while still providing meaningful exposure to commercial property.

 

7. Think Long Term — Success Compounds Over Years

Commercial real estate is a long-game. Cash flow grows as leases renew, rents increase, and the market matures. Most successful investors stay patient, buy quality assets, and add properties gradually over time.

 

Professionals like Jessie Eagen often emphasize that the best results come from smart, steady decision-making rather than quick wins.

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