“Everyone has a different reason for wanting to become an entrepreneur,” says Brosnan Hoban, millennial realtor and prominent figure of entrepreneurial success. Some are in it to be their own boss, while others just want to get paid following their passion. Others like the idea of setting their own schedule, in pursuit of the possible four-hour work week popularized by author Tim Ferris. “What I’ve found is that most people choose to become entrepreneurs because it’s the number one way in this country to become rich.” Out of the top five ways to accumulate wealth, developing properties is a proven way to do it. This means that Hoban's decision to join his father’s real estate development company will be paying dividends for many years to come.
According to the website Fundrise.com, “The investment strategy for commercial real estate is simple…Investors purchase the property and make money in two ways: first by leasing the property and charging tenants rent in exchange to use the property; and second by appreciation in the value of the property over time.” Let’s say that you were to buy a property for $300,000, where you borrow $250,000 and put in $50,000 of your own money. If the property appreciated to $400,000, this would mean that even though the value grew by only around 33%, your initial investment would have doubled (not including taxes and interest). Keep in mind that there are times when property values go down because of outside economic forces; but by carefully assessing each opportunity, you can minimize any potential risks and establish yourself as an authority in the field, as Hoban has.
“I’m 27, and I’ve helped develop and own over 10 commercial properties, generating over $10 million in profits per year.” These credentials demonstrate why Hoban understands what it takes for young entrepreneurs to succeed when investing in commercial real estate properties. “The first thing people need to understand is that we (millennials) don’t run our businesses the same way that older generations have done in the past.” Gone is the dependence on driving to properties and the dependence on written and oral communication. “Many things in the real estate development business have been streamlined through video or virtual-tours, as well as using electronic communication and apps to conduct business.” Although on-site visits will always be critical for successful due diligence, Hoban tells us, “A lot of time will be saved by doing things electronically.”
Now, because real estate speculation is always high risk, doing appropriate due diligence will help make the most informed decision possible. The most important thing for the entrepreneur to know is to do your homework before you put any money in.
Because millennials spend so much of their time online, they can easily find leads for properties on their social media by researching who is starting a new business or who is selling property in their target market. Also, compared to how people went to visit properties in the past, prospective buyers can now look online and see either photos or videos of the property.
Once they find some properties that interest them, there are still other boring, yet extremely important things that can be done from the comfort of their office or home. They can then go back and look at comparatives, which show the value of similar properties in the area. Getting quotes for insurance, financing, and most importantly, looking at the plot of the property. “You don’t want to get too far into the process and find out there’s a $30,000 lien on the property because of unpaid property taxes,” Hoban warns. Also, the old axiom “location, location, location” still rings true here: “If the property is in an area that is growing, you can command a higher price. If it’s a distressed property or questionable area, you may have more negotiating power in the selling price.”
Hoban suggests, “If you are selling to a millennial, you need to be aware that your client is going to be doing the same, if not more, research than you are.” Some of the features that make them more interested in properties are that they are as energy efficient and green as possible. Smart features like solar panels and or smart features, such as programmable thermostats, are a plus. “The key to selling to an entrepreneur is that they have the right information in front of them from the very beginning, and that there are as few surprises as possible.”
For more information about Brosnan C. Hoban, visit his Instagram www.instagram.com/Brosnan or his website www.brosnanhoban.com
Disclaimer: The views, suggestions and opinions expressed here are the sole responsibility of the experts. No Forbes India journalist was involved in the writing and production of this article.