Last week I received a few requests on Twitter and Face Book from you with questions like: How do I make this work for me? How do I get into the business?
Well, there are many areas of commercial real estate where you can do very well. From land, apartments, office building(s), shopping centers, single tenant, the list goes on and on. It all depend on how much you can afford to and willing to invest, but especially location, location, location!
The area that I will be speaking on is single tenant properties and shopping centers.
Before choosing to make an investment in anything, you should consider a few things:
Why am I doing this, how much will it cost in the short term, how much will it cost in the long run, is my timing right, what type of value will it add to my portfolio or my net worth in the next few months or years?
Let’s begin with figuring out what type of investor are you. Do you like to buy and hold? Do you like to buy and sell? Are you looking for long term cash flow?
Most of my clients look for long term cash flow, they look for properties with established businesses in place and long term corporate leases, companies that are doing well in bad economies, like fast food restaurant chains with one dollar menus, dollar stores, auto supply stores (more people are fixing their own cars today) discount telecommunication stores, quality shoe or clothing chain stores that sell their products at discount prices. Etc.
Overall, you’re looking for stores that can handle the type of economy we are working with now. As well as, properties that have the ability to increase in value by increasing your cash flow.
Before making a decision on a property you must first make sure that the deal makes sense for you.
It is so simple, that it can get complicated, but normally after looking at a few deals most new investors get the hang of the analyst.
You will quickly learn that income producing properties can be analyzed by splitting up the deal into three parts: Income, Expenses and Debt.
Income is the amount of cash that is sent to you each month.
Expense is the amount it cost you to maintain the property
Debt is the amount you pay the bank monthly for the funds that you borrowed to buy the property.
Well, there are many areas of commercial real estate where you can do very well. From land, apartments, office building(s), shopping centers, single tenant, the list goes on and on. It all depend on how much you can afford to and willing to invest, but especially location, location, location!
The area that I will be speaking on is single tenant properties and shopping centers.
Before choosing to make an investment in anything, you should consider a few things:
Why am I doing this, how much will it cost in the short term, how much will it cost in the long run, is my timing right, what type of value will it add to my portfolio or my net worth in the next few months or years?
Let’s begin with figuring out what type of investor are you. Do you like to buy and hold? Do you like to buy and sell? Are you looking for long term cash flow?
Most of my clients look for long term cash flow, they look for properties with established businesses in place and long term corporate leases, companies that are doing well in bad economies, like fast food restaurant chains with one dollar menus, dollar stores, auto supply stores (more people are fixing their own cars today) discount telecommunication stores, quality shoe or clothing chain stores that sell their products at discount prices. Etc.
Overall, you’re looking for stores that can handle the type of economy we are working with now. As well as, properties that have the ability to increase in value by increasing your cash flow.
Before making a decision on a property you must first make sure that the deal makes sense for you.
It is so simple, that it can get complicated, but normally after looking at a few deals most new investors get the hang of the analyst.
You will quickly learn that income producing properties can be analyzed by splitting up the deal into three parts: Income, Expenses and Debt.
Income is the amount of cash that is sent to you each month.
Expense is the amount it cost you to maintain the property
Debt is the amount you pay the bank monthly for the funds that you borrowed to buy the property.
Example:
Monthly Income 8,500 – expenses $500- monthly debt service $3,500= cash flow per month $4,500
Or $8,500-$500-$3,500=$4,500
Is commercial real estate investing risky, yes it is and it’s not for everyone.
If you are looking to build wealth, don’t mind learning to crunch numbers and taking some risk… then this just may be the investment for you. Next week, we will look at reducing the risk through due diligence and the professional approach to valuing the property.
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so we can send you the latest Single Tenant or shopping center listing that hit the market.
You can also catch us at http://www.bootheinvestmentgroup.com/.
Missed a lesson? Checkout our Archives
Be sure to bookmark this page for upcoming information regarding:
Evaluating a Property
Due Diligence
SBA Financing
Analyzing Cash Flow
Cap Rates
Cash Flow
Zoning
And much, much more.
You can also catch us at http://www.bootheinvestmentgroup.com/.
Missed a lesson? Checkout our Archives
Be sure to bookmark this page for upcoming information regarding:
Evaluating a Property
Due Diligence
SBA Financing
Analyzing Cash Flow
Cap Rates
Cash Flow
Zoning
And much, much more.
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