Archive for commercial real estate
Apartment & multifamily property investment is by far the major target of large scale rental real estate investors. And, there’s ample reason for this choice.
Large cash flows, available financing based on those cash flows, and economy of scale in expense reduction all come into play to make apartment & multifamily investment a worthwhile goal. But, if the right property isn’t available at the right time, where is a commercial real estate investor to turn?
One could go out of their desired area, but it’s not always a good decision to own and manage from afar. So, why not look at some alternative commercial investment property types?
Office Complexes or Shopping Strips and Malls
The face of business in this country has changed in the last dozen or so years. The Internet is a major factor, allowing more people to work outside of normal large business cubicles. Businesses are finding that outsourcing saves money in many cases. Small consulting and sub-contracting businesses have flourished.
These individuals or very small businesses need office space, and office complexes with small spaces with centralized conference areas have become popular. The ability to house many offices under one roof creates economies of scale, reduces expenses and increases cash flow.
Small business is still the generator of most of the jobs in this country, so shopping strip centers and malls will always draw shoppers. Investment in these types of commercial real estate will continue to be an excellent long term investment & cash flow proposition.
Storage Units
What if someone sent you a proposition to spend a fraction of the construction cost of residential rental property, yet rent it out for almost as much per square foot? That’s what storage unit properties are bringing to investors all around the country. They aren’t just a “build-and-own” opportunity.
Many of these projects were constructed as retirement income vehicles, and their owners are no longer able to manage them or heirs are selling in the estate. Storage unit properties are worth a close examination.
Mobile Home Parks
Construction costs keep going up for on-site built homes. And, in some cases, the cost of building mobile homes is going down due to efficiency of operation and processes.
That’s why mobile homes as a place to live aren’t going away. A mobile home park is an investment in land and infrastructure, but not in repair of the living units. Keeping an eye out for a mobile home park investment could be a decision an investor will celebrate down the road.
I’ll share more with you soon…
Warm Regards,
Karen Hanover, CCIM Candidate
Apartment Education Institute, President
Tagged with: cash flow , commercial real estate , investments , investors , Karen Hanover , mobile home parks , office complexes , retail , shopping centers , storage units , strip malls
Donald Trump is quoted as saying “If you’re going to be thinking anyway, think big.” Thinking big can take on many forms, and one is thinking about economy of scale as one great reason to be investing in commercial real estate through purchase of apartments and multifamily housing.
Economy of scale wears several hats in apartment and multifamily real estate investment:
· Apartment buying discounts – go to the Home Depot or Lowe’s and tell them you want one refrigerator. You’ll get a good price. But, tell them you want a dozen, and you get a cup of coffee and a special quote.
· Multifamily structure maintenance – If you own a dozen rental homes, you have a dozen roofs with different ages and in different stages of condition. With a single building multifamily property, it’s just one.
· Landscaping and outdoor maintenance – Those dozen yards require trips to each for landscaping, or at least careful watching if you’re leaving it to the tenants to do. The apartment property is in one location, and landscaping and yard services do it all in one trip.
· Cash flows ramp up with more units – The savings already mentioned combine with multiple rental units all in one place to produce much higher cash flows than taking them apart and spreading those twelve units all around town.
· Buying more units is no more of a task – Whether you’re doing a negotiation and transaction for four units or twenty, the effort is the same. The due diligence is concentrated, rather than spread out.
Those all relate to a larger number of units in one place. But, there are benefits in commercial apartment & multifamily investment that are derived from the higher dollar value of the properties as well.
If appreciation of real estate in the area is expected to be 15% over your holding period, would you rather be holding $200,000 worth of property, or $2 million worth? The difference is more than a quarter million dollars in your pocket.
One more benefit that began to show huge promise during the collapse of the housing and mortgage markets beginning in 2007 is the increase in rental demand that comes from homeowners displaced by foreclosure.
Any commercial real estate investment portfolio will be greatly enhanced with the addition of apartment and multifamily properties investment.
I’ll share more with you soon…
Warm Regards,
Karen Hanover, CCIM Candidate
Apartment Education Institute, President
Tagged with: apartment , apartment investment , commercial real estate , commercial real estate investment , Karen Hanover , multifamily
What are Commercial Short Sales All About Anyway?
Real estate investors bought apartments with short-term debt when
the market was hot a few years ago. That’s simple enough…
Now those same short-term loans are coming due and investors
can’t refinance.
EVEN THOUGH RENTS ARE COMING IN and they have the money
to make the payments, they can’t qualify for new financing because
the value of the commercial real estate has gone done in value.
When real estate investors can’t qualify for a new loan, that often
creates apartment foreclosures…
Enter Commercial Short Sale Investing!
Stay tuned as I show you EXACTLY how YOU can cash in on what
many feel will be a tidal wave of killer discounts on commercial
real estate!
I’ll share more with you soon…
Karen Hanover, CCIM Candidate
Apartment Education Institute, President
Tagged with: apartment foreclosures , commercial real estate , Commercial short sale , investing , Karen Hanover , Residential foreclosures
