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01 174913 ffirs.qxp11/21/074:29 PMPage iiiCommercialReal Estate InvestingFORDUMmIES‰by Peter Conti and Peter Harris

01 174913 ffirs.qxp11/21/074:29 PMPage ivCommercial Real Estate Investing For Dummies Published byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.comCopyright 2008 by Wiley Publishing, Inc., Indianapolis, IndianaPublished by Wiley Publishing, Inc., Indianapolis, IndianaPublished simultaneously in CanadaNo part of this publication may be reproduced, stored in a retrieval system, or transmitted in any formor by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior writtenpermission of the Publisher, or authorization through payment of the appropriate per-copy fee to theCopyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600.Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing,Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online at http://www.wiley.com/go/permissions.Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for theRest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related tradedress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the UnitedStates and other countries, and may not be used without written permission. All other trademarks are theproperty of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendormentioned in this book.LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THECONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUTLIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THEUNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OROTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF ACOMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THEAUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZATIONOR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THEINFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAYMAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORKMAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN ITIS READ.For general information on our other products and services, please contact our Customer CareDepartment within the U.S. at 800-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.For technical support, please visit www.wiley.com/techsupport.Wiley also publishes its books in a variety of electronic formats. Some content that appears in print maynot be available in electronic books.Library of Congress Control Number: 2007941165ISBN: 978-0-470-17491-3Manufactured in the United States of America10 9 8 7 6 5 4 3 2 1

01 174913 ffirs.qxp11/21/074:29 PMPage vAbout the AuthorsPeter Conti and Peter Harris are known as the World’s #1 GreatestCommercial Real Estate Mentors. They partnered years ago by combiningtheir existing Mentoring practices. They have both started from modestbeginnings, Peter Conti was an auto mechanic, and Peter Harris was an introverted engineer. The portfolio of properties they have purchased nationwidewith their Commercial Mentoring Program students continues to grow at anaccelerated rate.Peter Conti is the CEO of MentorFinancialGroup.com and lives on theChesapeake Bay with his wife and kids in Annapolis, Maryland.Peter Harris has purchased and put together commercial and residential realestate deals across the country for years. He has taught, mentored, andinstructed many of the most successful investors across the nation. Harrisand Donald Trump are coauthors of Three Master Secrets of Real EstateSuccess. He also sits on the board of advisors on several private and nationalreal estate investment and development companies.Many years ago, Peter Harris received the gift of a great mentor in his careerand in his every day life, who guided and encouraged him to always get out ofhis comfort zone and play a bigger game. Mentoring one-on-one or to hundreds at a time around the nation is Peter’s way of giving back and impartingthe message of hope and faith in the dynamic and rewarding world of realestate. Even though Peter’s first career was a physicist, holding several U.S.patents on outer space simulation, the school of hard knocks was where hegot his real education in the business world.Besides his business life, Peter’s passions include hanging out with his sonPJ, serving at his church, smiley faces, and riding his bike hundreds of milesat a time. Peter Harris lives in the heart of San Francisco with his son, PJ.You can e-mail the authors at mentor@mentorfinancialgroup.com, oryou can call them at 800-952-9585.

01 174913 ffirs.qxp11/21/074:29 PMPage viA Free Gift from the Authors: Your BonusCommercial Quick Start Training PackageHere’s your chance to join the authors for over six hours of training that justwouldn’t fit in the book so that you can hit the ground running with yourcommercial real estate investing. You’ll get to listen in, watch, and respond asthey guide you in putting together highly profitable commercial deals.Here’s what you get: Over 6 hours of audio and video commercial investing trainingsessions Special form “Addendum A,” which gives you up to 90 days todecide if you want a deal or not A Quick Start exclusive: The Money Raising Workshop Audio interviews with leading commercial real estate investingexpertsYou’ll discover: The fastest way to get started investing in commercial realestate How to retire in five years or less Insider secrets to finding deals How to buy commercial real estate with no money Three steps to quickly fund even the biggest deal How to explode your net worth with land developmentYou’ll also receive this special report: “The 3 Best Places to Buy CommercialProperty Today”Get your Commercial Quick Start Training Package (a 299 value) byregistering your copy of this book at www.commercialquickstart.com.Enter code CFD101.

01 174913 ffirs.qxp11/21/074:29 PMPage viiDedicationPeter Conti: This book is dedicated to Peter Harris. You are an incredibleblessing in my life.Peter Harris: I dedicate this book to God first and foremost. I thank Himfor His faithfulness, His love and grace, and for all of the amazing peopleHe blesses me with. I also thank my great mentor, a great man named NickTsujimoto. Thank you, Nick, for your wisdom and love, for our many “closeddoor” sessions, and for helping me set and achieve awesomely scary goals.Lastly, I want to thank my partner Peter Conti for being the man and friendthat he is and always will be. And to everyone else: The best is yet to come!

01 174913 ffirs.qxp11/21/074:29 PMPage viiiAuthors’ AcknowledgmentsFrom both authors:To every one of our Commercial Mentoring Program students. This book,along with all of the fun we’ve had and all of the properties we’ve boughttogether, would not be possible without you. Your courage motivates usevery day. To Tim Gallan and Mike Lewis at Wiley publishing, we don’t knowhow you do it. Thanks for giving us a little breathing room.From Peter Harris:To PJ, for always hanging in there with Dad. You are the greatest son a fathercould ever ask for. I love you, dude.To Steve, Gary, Abe, Marge, June, Beck, Lela, Stone, Steph, and wonder boyKyle, for always cheering for me.To Da’ Girls, you know who you are! Thanks for being warriors in your livesand mine. I am the wealthiest man on earth because of who and what weshare together. The best is yet to come!From Peter Conti:This book wouldn’t have happened without the awesome changes I’ve seenin my life over the past few years. Thank you, God, for such a great life andespecially for surrounding me with so many wonderful people. Joanna, I loveyou. I miss you girls. You grew up so fast. Son, our time together is preciousto me.To everyone at MentorFinancialGroup.com: Marilyn, Angela, and Jeff. Wow!You are the most incredible and fun people I’ve ever had the privilege to workwith. To Deb, Elizabeth, Kevin, Elaine, and Molly, you are the backbone of theMentor Family. All of you have proven that nothing is impossible for the manwho doesn’t have to make it happen.To all of our coaches, Peter Harris, Cheryl, Rob, Stephen, Emily, Juli, Cleve,Jeff, Matt, and David. Your daily support and encouragement for ourMentorship students is changing the world.

01 174913 ffirs.qxp11/21/074:29 PMPage ixTo Mr. X in one of the southern states. Your passion for helping all of our students to profit from every single deal they do with us is the keystone of theMentor System. You deserve the credit even though you wish to remainanonymous.To my friends in Christ: Brett, Rob, Peter, Baden, Tom, Thomas, Stephen, andRobb. Thank you for your leadership and guidance. And Rob, that prayingover your wife thing you taught me is awesome!To Mom, Dad, Lisa, Debbie, Linda, John, Paul, and Matthew, I love you.

01 174913 ffirs.qxp11/21/074:29 PMPage xPublisher’s AcknowledgmentsWe’re proud of this book; please send us your comments through our Dummies online registrationform located at www.dummies.com/register/Some of the people who helped bring this book to market include the following:Acquisitions, Editorial, andMedia DevelopmentSenior Project Editor: Tim GallanComposition ServicesProject Coordinator: Kristie ReesCopy Editor: Jessica SmithLayout and Graphics: Reuben W. Davis,Alissa D. Ellet, Brooke Graczyk,Christine WilliamsEditorial Manager: Michelle HackerAnniversary Logo Design: Richard PacificoEditorial Assistants: Joe Niesen, LeeannHarney, David LuttonProofreaders: Cynthia Fields, John Greenough,Bonnie MikkelsonCartoons: Rich Tennant(www.the5thwave.com)Indexer: Steve RathAcquisitions Editor: Michael LewisSpecial HelpElizabeth KuballPublishing and Editorial for Consumer DummiesDiane Graves Steele, Vice President and Publisher, Consumer DummiesJoyce Pepple, Acquisitions Director, Consumer DummiesKristin A. Cocks, Product Development Director, Consumer DummiesMichael Spring, Vice President and Publisher, TravelKelly Regan, Editorial Director, TravelPublishing for Technology DummiesAndy Cummings, Vice President and Publisher, Dummies Technology/General UserComposition ServicesGerry Fahey, Vice President of Production ServicesDebbie Stailey, Director of Composition Services