True Investors (psst...secrets to Flip or Hold!) start small in the Residential Market. But when they go BIG - Big Piles of Paper, Big Properties & Bigger Profits – they start watching commercials...The only time when watching commercials makes sense: Commercial Real Estate, what else?!
Most people think of commercial real estate as being shopping centers, office buildings or warehouses. But commercial real estate as an industry can be broken down into six main categories. Below is a list of the different types of commercial real estate:
When you start, you can start with what is most familiar. You can use several selling strategies to "actively" enter the investor's quadrant. But sooner than later you'll have to set course to greener pastures, to turn active into passive income through investing. You'll have to play a bigger game. If you’re hungry to master the game and play like a pro on a turbo track, we got you covered:
Residential, Commercial, Notes - What is the difference?
Top 3 advantages to investing in commercial:
#1: Ease of Finance, Strong & Stable Returns
In residential real estate investing, property investors can solely rely on hard money
lenders, private money lenders and traditional methods of financing. For commercial real estate investing it's much easier to get financed and for much larger amounts because the loans are based on the NOI, the performance of the property. Not a personal credit score. With commercial property, the returns are much higher both in cash flow and capital growth. Unlike the short-term leases for residential, commercial leases are usually more stable at 3 to 10 years.
#2: Tax Benefits, Appreciation and Leverage
Commercial property provides generous tax benefits and substantial depreciation allowances, Many ways to add value to a commercial property like: renovating, upgrading, subdividing or enlarging, improving the appearance and restructuring the lease. Through smart borrowing against your commercial property investments over time, you are in a position to quickly control a sizeable portfolio of properties.
#3: The Power of Scale
The two former benefits are great. However, the real game-changer with commercial property is the scalability of it all. Because of the larger sums of NOI and Cash Flow involved you can purposefully move from self-management to outsourced property
management. It becomes a deliberate move from active to passive investment. The
difference between 1 house paying a monthly rent of $950 that you manage or an apartment complex of 52 units paying $1250 that is $ 65.000 rent per month with a property management paid for by the leases. It's like growing your portfolio on steroids making growing your wealth super easy. With commercial real estate, you are not only playing a much bigger game you actually get granted superpowers.
Money making superpowers, with less risk and with less work. So now
you know it was never a dress, it was an investor's superpower cape all
Welcome to RealEstatz, start your journey to financial freedom today. Join us! #Free4Real
This is issue nr 2 of the MAKE MONEY SERIES: