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Crushing It in Apartments and Commercial Real Estate

How a Small Investor Can Make It Big

By Brian Murray
12-minute read
Audio available
Crushing It in Apartments and Commercial Real Estate: How a Small Investor Can Make It Big by Brian Murray

Crushing It in Apartments and Commercial Real Estate (2017) provides a peek at the secrets behind the author’s phenomenal success in the real-estate market. Full of readily applicable advice for prospective investors, the book will also help established property owners make the most of their real estate. Along the way, the author shares examples from his many years working in the industry.

  • Budding investors considering buying commercial real estate or apartments
  • Anyone looking for tips on starting a successful small business
  • Real-estate novices who want to know more about the industry

Brian Murray is the founder and CEO of Washington Street Properties, a commercial real-estate investment company and one of the quickest-growing private companies in America. In 2015, he was awarded a Gold Stevie Award for Real Estate Executive of the Year at the Annual American Business Awards.

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Crushing It in Apartments and Commercial Real Estate

How a Small Investor Can Make It Big

By Brian Murray
  • Read in 12 minutes
  • Audio & text available
  • Contains 7 key ideas
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Crushing It in Apartments and Commercial Real Estate: How a Small Investor Can Make It Big by Brian Murray
Synopsis

Crushing It in Apartments and Commercial Real Estate (2017) provides a peek at the secrets behind the author’s phenomenal success in the real-estate market. Full of readily applicable advice for prospective investors, the book will also help established property owners make the most of their real estate. Along the way, the author shares examples from his many years working in the industry.

Key idea 1 of 7

Before investing in real estate, you need to do the numbers and ensure that the property will bring in cash.

You’ve probably had the thought. If only you could buy a piece of valuable property, your money problems would be solved forever. And yes, investing in commercial real estate can lead to considerable wealth – but there’s a bit more to it than buying a few apartments and awaiting the inevitable blizzard of banknotes.

First and foremost, you’ve got to get a handle on a few financial concepts, the most important of which are net operating income and cash-on-cash returns.

A property’s net operating income is easy to calculate. Simply take the income the property will generate for you in a year – things like the rent you’ll receive from tenants, the money generated by the laundry facilities and the fees levied on pets. Take this number and subtract the property’s yearly costs – for example, property taxes and maintenance expenses. The difference between these two numbers is the net operating income.

Now that you’ve got this number, it’s time to calculate the property’s cash-on-cash returns. To do this, take the net operating income and divide it by the amount you’ve invested in the property upfront. Now multiply this number by one hundred and put a percentage sign after it. That percentage is the property’s cash-on-cash returns, and the higher it is, the better.

If you want to expand your portfolio, you’ll need to focus on investments that carry little risk. And the properties that provide an instant cash flow are usually the least risky. This is why knowing these numbers is of the utmost importance.

By investing in properties with large cash-on-cash returns, you’ll increase your cash flow, thus reducing the risk inherent to all investments. In the real-estate game, cash is your lifeboat. Mistakes will be made, and unforeseeable events are as inevitable as high waves on the open sea. It behooves you to have a means of staying afloat.

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