By Ross Briggs, Vice President Commercial Banking

Have you thought about investing in real estate but aren't sure where to begin? You’re not alone. I regularly talk to people who are intrigued by the idea of owning commercial property but feel overwhelmed by the process.

Here's the good news: you don’t need to be an expert to get started. You just need a solid foundation, a clear plan, and the right team by your side.

The Bridgewater Bank team and I have the privilege of working with countless investors at every stage of their journey, from seasoned veterans who have built and managed portfolios through multiple economic cycles to those who are just getting started, armed with a few podcasts and real estate books.

If you're in the latter group, this guide will help you take your first steps with confidence and clarity, helping you understand where to start and what questions to ask along the way.

Let’s dive in!

Step 1: Know Your Financial Foundation

Before browsing Zillow or LoopNet for your first deal, take time to organize your personal finances. Start by preparing a Personal Financial Statement (PFS), which serves as a roadmap for a banker like me to assess your financial strength and ability to take on additional debt.

A PFS should include:

• Your assets, liabilities, and net worth
• Your monthly income and expenses
• Your credit score

This is a simple document to complete, and your banker will be able to provide a template and guidance to get started. 

Step 2: Learn the Landscape

Before making any big moves, take time to educate yourself. A well-informed investor makes better decisions and avoids costly mistakes. So, read books, listen to podcasts, attend local real estate events, and, most importantly, speak with experienced investors.

Here’s what to focus on:

• Types of Investments: Office, industrial, retail, multifamily...each has different risk profiles, return potential, and management intensity. Study the different types and decide which best fits your goals, risk tolerance, and current financial situation.

• Financing Options: There is more than one way to finance a property, and I recommend thoroughly understanding the pros and cons of each option. As commercial real estate bankers, we often structure loans based on several borrower and property-specific factors. Don’t hesitate to reach out early in the vetting process to get feedback on what loan terms to expect.

Step 3: Build the Right Team

As a University of Alabama alumnus, I’ll take this opportunity to quote the great Nick Saban: “Get the right guys on the bus, get them in the right seat, and get the wrong guys off the bus.” Having the right people in place is almost as valuable as the real estate itself.

Your team should include:

• A trustworthy real estate agent or broker with solid experience representing investors in CRE transactions
• A local banker who knows the market, understands your goals, and is committed to being a resource throughout the process
• A reliable real estate attorney and CPA. These services may seem unnecessary at first, but in my experience, they’re often worth their weight in gold.

Step 4: Crunch the Numbers

You’ve heard it before: cash is king in real estate. It’s important to have a solid understanding of the numbers and key financial metrics involved in evaluating an investment property.

Follow these steps:

1). Develop a pro forma to analyze the property’s

• Potential income
• Expenses
• Net operating income (NOI)
• Return on investment

Use realistic figures backed by actual market data. A good broker and local banker can provide valuable information on rental rates, vacancy trends, operating costs, and capitalization rates in your market.

2). Understand the financial and leverage metrics your banker will consider during underwriting. The Debt Service Coverage Ratio (DSCR) and Loan-to-Value (LTV) are essential. Knowing how they impact your financing is critical.

3). Remember that bankers also evaluate other underwriting factors such as:

• Property type and intended use
• Location and market trends
• Leasing and operating history
• Property condition and age
• Borrower experience and financial condition

Step 5: Think Long-Term and Stay Disciplined

We’ve all seen the flashy ads…someone lounging in a private jet, promising they’ve “cracked the code” to building a multimillion-dollar real estate empire overnight with no money down and no experience. If it sounds too good to be true, it usually is.

As I sit here at my desk (firmly on the ground), I think about the real investors I’ve worked with, the ones who’ve built sustainable, lasting success. Their approach is far less glamorous, but much more effective.

What do they do?

• Play the long game
• Maintain their properties
• Care for their tenants
• Keep their commitments
• Treat their investments like a business, not a shortcut to wealth
• Most importantly, they manage risk carefully and avoid overleveraging their portfolios.

Whether you’re eyeing your first rental property or expanding into larger commercial projects, success comes down to a few core principles: know your numbers, surround yourself with the right team, and stay disciplined through the ups and downs of the market.

I’ve seen firsthand how real estate can transform financial futures when approached with patience, discipline, and a long-term mindset. So, although the process can feel overwhelming at first, don’t let that stop you from starting. Take small, well-informed steps. Ask questions. Leverage the knowledge of professionals who’ve walked the path before you.

And remember, your banker isn’t just here to approve or decline a loan; we’re here to help you think through your strategy, identify risks, and position your portfolio for long-term success.

At Bridgewater Bank, we’re proud to be the Twin Cities’ premier banking partner for commercial real estate investors. If you’re looking for a local team that values relationships and brings real expertise to the table, we’d love to connect.

Member FDIC | Equal Housing Lender