Honest Realestate Agent

Posts Tagged ‘commercial real estate’

Investing in commercial real estate can be easier and more profitable than single family homes. While the income potential may more than justify higher prices, coming up with the funding to support commercial real estate purchases may be both intimidating and even prohibitive for many real estate investors.

If this scenario rings true for you, then you might consider something a little more basic to help build some investing momentum and to also put some cash in your pocket as you’re doing so. One of the best ways to make some big bucks in the current real estate market is by flipping REO properties.

Just so we’re all on the same page, REO properties are those that have been foreclosed on, and are now back in the hands of the bank. There is no homeowner to negotiate with, or to have to explain the foreclosure process. REOs have clear title, are often discounted, and investing in them is very much a repeatable process.

The acquisition process for REOs will require that you have a good local realtor on you team, which isn’t a bad thing to begin with anyway. The reason for this is that the REO business is very much a numbers game, even more so than for other types of real estate investments. The advantage you have is that there is a high volume of available properties out there, so you can look for those great bargains and make offers until something sticks.

Once you are able to find quality REO deals, the next step is to turn them into profit, cash flow, or both. For many investors who are looking to bolster their cash supply for larger and more long-term purchases like commercial properties, the idea of flipping REOs can be very attractive, and quite lucrative. End buyers for these kinds of properties are becoming more abundant, and the quality of discounting that the lender owners are offering with many REOs can be quite impressive.

In subsequent articles on the subject of REO properties, I will be discussing how to use proceeds from them to help build towards larger purchases like commercial real estate. I will also tell you how attracting private lenders to smaller REO purchases now can set the table for having ready sources of private capital down the road with your commercial investments. With that said, stay tuned, as I have a lot more to share with you.

Foreigners interested in buying property abroad in a market that appears to be well positioned to withstand the current downturn and to stage a solid bounce back once the economy improves may find a good investment potential in Canadian commercial real estate. The market for commercial real estate in Canada has performed exceptionally well in the current downturn, which has boosted vacancy rates to multi-year highs throughout the world, especially in the United States. At the same time, rents on commercial real estate investments have declined substantially, prompting owners of certain types or commercial properties to offer various rent discounts and incentives. The future outlook for commercial real estate abroad remains dismal. Yet, Canadian commercial property investments looks poised to outperform the property investments in most developed nations abroad. REMA Commercial properties specialist

Unlike in the United States, rents in the Canadian commercial real estate market have remained stable because vacancy rates have been relatively low. Office vacancy rates, for instance, have increased to about 6 per cent, which is well below vacancy rates reached in previous cycles. In some local property markets vacancies have actually continued to decline. In addition, Canadian vacancy rates are way lower than those in some other developed countries, most notably the United States. The low supply of new commercial properties in the market has kept absorption levels high and vacancies on Canadian commercial real estate investments low. This supports the good outlook for rents on investments in commercial real estate in Canada, especially in comparison to investments in other markets in the world. As a result, real estate investors buying property abroad should be able to find many opportunities in Canada that guarantee a stable return on investment.

Another benefit of investing in Canadian commercial real estate market is that the current downturn in Canada should be both shorter and milder than in most developed economies abroad. The economic recession in Canada will likely end in the second half of this year. Canada’s recovering economy will start adding employees to the nation’s payrolls much sooner than will other economies in the world, especially that of the United States. As a result, utilization rates for vacant commercial properties in Canada should improve sooner, helping the market stabilize. The only two exceptions to this positive outlook are Toronto and Calgary, which will continue to see rising vacancies and falling rents due to oversupply issues. But, as property prices decline, even the substantial downturns in some local commercial real estate markets in Canada may offer opportunities for international property investors to buy cheap properties with a major earning potential.

Commercial real estate market in Canada in the current cycle should also turn around much quicker than in previous cycles because this time the Canadian commercial real estate market does not suffer from the excessive supply of commercial properties. Therefore, the market rebound is expected to happen within two years, which is only a half of the time it usually takes for commercial real estate markets to stage a comeback from recession.

Good opportunities exist in Canada for international real estate investors considering investment in commercial real estate. Canada’s image of a stable and secure market for property investments should appeal to international real estate investors seeking refuge from the generally slumping commercial real estate worldwide. Jimco International Overseas properties specialist

Foreigners interested in buying property abroad in a market that appears to be well positioned to withstand the current downturn and to stage a solid bounce back once the economy improves may find a good investment potential in Canadian commercial real estate. The market for commercial real estate in Canada has performed exceptionally well in the current downturn, which has boosted vacancy rates to multi-year highs throughout the world, especially in the United States. In Canada, despite the weakness, rents on commercial real estate investments have so far outperformed those in the real estate markets overseas. The future outlook for commercial real estate abroad remains dismal. However, Canadian investments in Canadian commercial real estate are likely to fare much better than most comparable markets in the world. Jimco International Overseas properties specialist

Low vacancy rates amidst a limited supply of new commercial properties and good demand have kept rents on investments in commercial real estate in Canada stable. The recent increase in office vacancy rates to 6 per cent is considered modest by historical patterns. In fact, there are even some localities, such as Ottawa, which are bucking the trend. While commercial real estate vacancies have clearly increased over the past several quarters, they still remain exceptionally low compared to other countries in the world, especially the United States. What is working to the benefit of the Canadian commercial real estate investments, however, is that vacancies are increasing from a low base because, in general, there has been a limited supply of new commercial properties in most local markets. This supports the good outlook for rents on investments in commercial real estate in Canada, especially in comparison to investments in other markets in the world. Stable rental income flows should thus appeal to foreign commercial property investors interested in buying property abroad.

Potential investors in Canada’s commercial real estate should also consider that the current downturn in the market in most likely to be less pronounced and shorter than that in most other nations abroad. The economic recession in Canada will likely end in the second half of this year. Canada’s recovering economy will start adding employees to the nation’s payrolls much sooner than will other economies in the world, especially that of the United States. As a result, utilization rates for vacant commercial properties in Canada should improve sooner, helping the market stabilize. Because of local market oversupply issues and exposures to severely bruised industries, such as the financial services industry, Toronto and Calgary may see an extended slump. But, as property prices decline, even the substantial downturns in some local commercial real estate markets in Canada may offer opportunities for international property investors to buy cheap properties with a major earning potential.

Limited supply of new developments also bodes well for a short downturn in commercial real estate market in Canada. With the expectation that commercial real estate in Canada will start recovering within the next couple of years, half the time it usually takes the market to rebound and much less than what is expected of the most markets abroad, foreign investors should consider investing in commercial real estate in Canada.

Good opportunities exist in Canada for international real estate investors considering investment in commercial real estate. Canada’s image of a stable and secure market for property investments should appeal to international real estate investors seeking refuge from the generally slumping commercial real estate worldwide. Jimco International Overseas properties specialist

Foreigners interested in buying property abroad in a market that appears to be well positioned to withstand the current downturn and to stage a solid bounce back once the economy improves may find a good investment potential in Canadian commercial real estate. Investments in commercial real estate in Canada have proven especially resilient to the current downturn, which is a stark contrast to commercial real estate abroad. At the same time, rents on commercial real estate investments have declined substantially, prompting owners of certain types or commercial properties to offer various rent discounts and incentives. The future outlook for commercial real estate abroad remains dismal. Yet, Canadian commercial property investments looks poised to outperform the property investments in most developed nations abroad. REMA Commercial properties specialist

Unlike in the United States, rents in the Canadian commercial real estate market have remained stable because vacancy rates have been relatively low. The recent increase in office vacancy rates to 6 per cent is considered modest by historical patterns. In fact, there are even some localities, such as Ottawa, which are bucking the trend. While commercial real estate vacancies have clearly increased over the past several quarters, they still remain exceptionally low compared to other countries in the world, especially the United States. What is working to the benefit of the Canadian commercial real estate investments, however, is that vacancies are increasing from a low base because, in general, there has been a limited supply of new commercial properties in most local markets. This supports the good outlook for rents on investments in commercial real estate in Canada, especially in comparison to investments in other markets in the world. As a result, real estate investors buying property abroad should be able to find many opportunities in Canada that guarantee a stable return on investment.

Potential investors in Canada’s commercial real estate should also consider that the current downturn in the market in most likely to be less pronounced and shorter than that in most other nations abroad. The economic recession in Canada will likely end in the second half of this year. Canada’s recovering economy will start adding employees to the nation’s payrolls much sooner than will other economies in the world, especially that of the United States. As a result, utilization rates for vacant commercial properties in Canada should improve sooner, helping the market stabilize. Because of local market oversupply issues and exposures to severely bruised industries, such as the financial services industry, Toronto and Calgary may see an extended slump. But, as property prices decline, even the substantial downturns in some local commercial real estate markets in Canada may offer opportunities for international property investors to buy cheap properties with a major earning potential.

Commercial real estate market in Canada in the current cycle should also turn around much quicker than in previous cycles because this time the Canadian commercial real estate market does not suffer from the excessive supply of commercial properties. With the expectation that commercial real estate in Canada will start recovering within the next couple of years, half the time it usually takes the market to rebound and much less than what is expected of the most markets abroad, foreign investors should consider investing in commercial real estate in Canada.

Good opportunities exist in Canada for international real estate investors considering investment in commercial real estate. Canada’s commercial real estate traditionally offers strong income opportunities to foreign investors that seek to make an investment in commercial real estate in the markets characterized by long-term stability. REMA Commercial properties specialist

Purchasing your own business space requires careful consideration. Get caught in a bad deal and you can lose a lot of money or find yourself stuck in a bad location that doesn’t meet your needs over many years.

The nice thing regarding today’s market is you have more options in more cities, like Cleveland, for example, you have a wide variety of spaces to choose from and chances are you do not need to sign a very long lease if you want to go that route. This will protect your enterprise by letting you change locations quicker in the event that you get too big for the space.

Obviously you will want to work with a experienced business realtor with that has done this lots of times. But you should also learn everything you can concerning commercial real estate so you make good decisions. To be certain about it you must consider various views on the problem. Checking out other online social groups and websites will surely give you sharper insight into the issue. As an example, you can go out on the Web and read information that specifically apply to Ohio commercial real estate brokers or you should study topics that are specifically about Commercial Real Estate Cleveland. By reading all the angles grasping so you can be prepared. You can become much more smart about the subject and you might become an expert.

The big advantage of education yourself on the topic is that you can have an interesting discussion with your commercial broker and narrow your office space needs in less time by knowing the issues and what your needs are. This is going to be a serious advantage as you try to find commercial locations and it is going to be a way to speed things up because you will be better able to articulate what you need for your commercial property needs. And the quicker you get get moved into your new space the more quickly you get everyone back to working.

There are numerous options available to the Illinois real estate investor for investing in Galesburg commercial property. Whether searching for raw land for a commercial development, or acquiring a retail property for a growing local restaurant, there are both opportunities and challenges for the investor. When performing due diligence in researching areas for potential Galesburg real estate investment, one of the first areas one should consider should be commercial property near Sandburg Mall. The Sandburg Mall is a great location for many businesses due to the traffic and proximity to local Galesburg amenities that attract residents to the mall.

About Galesburg

Galesburg is a city that covers approximately 17 sq mi, with a population of about 33,000 residents. Located in Knox County, Galesburg is about one hour from Peoria, a large enough community to warrant its own “micropolitan” status in the federal government. There are great values in Galesburg real estate for both residential and commercial development, and the Sandburg Mall is one area to consider.

Sandburg Mall Location

The Sandburg Mall is located in Galesburg just a few miles west of Interstate 74, with freeway frontage from Illinois Highway 34. It is a commercially viable district for Galesburg commercial property development in part because of its location near these two major highways. The mall is located just a few blocks south of Storey Lake, a popular development north of the freeway that includes a residential area, a park, a nearby hospital, and other features.

Other retail establishments

The Sandburg Mall is anchored by JC Penney, and has other retail stores such as Christopher & Banks, Bath and Body Works, Radio Shack, and the popular Sandburg Cinema. There are also numerous local restaurants and national restaurant chains to bring locals to town for food. There are fast food establishments nearby including Pizza Hit and Arby’s, with sit-down restaurant chains including Perkins, Applebees and Acapulco. For the investor or small business wanting to expand operations into an established area for a new real estate development, property near Sandburg Mall may be the perfect choice.

Commercial property investing is an incredibly exciting arena. A single deal can generate serious wealth. One good deal can change an entire life.

Of course, this potential comes with serious responsibility. There are a lot of factors involved in successful commercial property investing. You need the exact value of the property. Take note – that is not the amount of money it generates each year! You also need to deal with issues like zoning and surveys that can impact a successful deal.

Most commercial property investors are already aware of these issues. Why then, do such a massive number of commercial deals fail each year? It is because of a single major mistake that even good commercial investors can be very tempted to make.

This mistake is simple – and tempting. It is the act of borrowing too much money. This is called over-leveraging a deal. This means that you borrowed too much money against the property. If the property does not perform perfectly then the entire system falls apart. Does this sound pretty bad? Certainly it does.

You might be wondering why anyone would over-leverage. It is pretty easy to get carried away when you are involved in commercial property investing. You might be over-emotionally involved in the deal. They might think that their projections and numbers cannot be wrong. It may be too hard to resist the draw of potential windfalls should everything go perfectly.

It is good to have some rules for when things get exciting so you don’t get carried away. Use the “break-even ratio” to keep you grounded. Combining operating expenses and debt servicing costs is the first step to establishing the break even ratio. Divide that number by the gross potential income. GPI is the term used for how much the building brings in. The ratio should be less than 80 percent. In cases of higher ratios, you need to plan on saving a lot of extra capital.

Of course, no number system will work perfectly. Make sure that your system will work with input from educators, advisors and lawyers. Use care, restraint and as much information as possible when evaluating commercial property investing.

There is clearly a lot of potential in getting involved in commercial real estate. The potential of any real estate deal is to change your life. Everything is bigger and better when it comes to commercial real estate.

Naturally you should be careful when you get started in commercial real estate investing. Wisely invest some time into your education. This type of real estate is similar in many ways to residential real estate. You will find that in other ways they are fundamentally different. Experience in one does not equate to success in the other.

Here are some things you should know to get started learning about commercial real estate investing:

* • You must factor in the local market - The state of the commercial market may not be the same as the state of the residential market. If you have a great property but no market, you lose. You must check out the conditions carefully. Always make sure you can use the commercial property.

* Zoning issues are important - You have to use commercial property in accordance with zoning laws. Your intentions need to work within these bounds.

* • Do due diligence - The requirements for commercial property conditions may be more stringent than for residential properties. Your property must meet all guidelines. You need to check environmental, building system and structural requirements. Also check out zoning, land-use, title and survey regulations.

* Be sure that you get the right operating numbers. - Your numbers on the cost of the building must be precise. The net operating income determines the value. Take a building that costs 1.99 million to run and brings in 2 million. There is not much actual value there.

* • Establish exit strategies - Make sure you have an opening to get out if things go wrong. Also, be sure you can maximize your rewards when things go right.

It should be clear now that commercial real estate investing and residential are dissimilar. Of course, wealth creation is common for both of them. These basics can help you really get started in commercial real estate investing.

A few months ago while searching for reviews on commercial real estate programs on the market I came across a review for Austin Davis and his commercial real estate program. He has a well respected reputation in the industry and has advised many of today's gurus before they were gurus. He has a well respected reputation in the industry and has advised many of today's gurus before they were gurus.

I bought the program and registered it. I paid $198 and it was easy to understand, short and to the point, very easy to understand. I am looking for the funds I need for deals and his program looks like a winner for that. A few weeks after I bought his program I was sent a email from his staff with a invite to his real estate mastermind group for $99 a month.

I went and joined the master mind group, not too bad for $99 a month, having a team to help me. I have now been in the club for a month and have applied for funding to get started and have been told I was approved. I am expecting the paper work to access my funds next week in the mail.

What I found really impressive about his setup is his staff is fast to reply to emails and they explain things so I can easily understand them. For a more in depth review of his program you can visit the squidoo review page on Austin Davis’s commercial real estate program.

To review if you are looking for a program that makes it easy to get unsecured funds to get started on a deal this is a great program and the price is lower than most.

His programs low credit requirements, and no credit requirements are one of the biggest benefits. There is also no income, job or asset requirements to get strated in his program which will be good for many people in this economy.

If you are a current investor or one who has always wanted to get started then now is the ideal time to get started. The good news is while 98% of investors are running after single family homes there are less than 2% of investors going after the real money. The big money and the easy money is in commercial real estate. 

The common belief is that you have to have a large network and lots of cash to get into commercial real estate. Nearly everyone who has bought commercial real estate who didn’t come from money has stumbled upon it or been shown the ropes on how to do it from those who already have it. 

I managed to get an interview with one of the top real estate coaches in commercial real estate to find out more about it. Austin Davis is well known in old real estate circles of commercial real estate and for good reason – he started with very little and has built a large portfolio of commercial real estate in the United States over the past 30-40 years. Using very little of his own money and keeping his assets well protected through multiple trusts, corporations and leaving pretty much nothing in his own name. 

When I asked him about how hard it is to get started he replied, “It’s much easier to get started in commercial than it is in residential since the property and funding for it is based on the ability of the property to generate income and not you personally it is a lot easier to get started. It is just not true you have to have a lot of money. The only real obstacle is knowing how you get the door open and yoru foot in. After you get your first deal and can show lenders you have property – it’s much easier to get funding for the new deals you find with little cash out of pocket.” 

I was very curious about this and so I started looking into it. I found that there are really few books or programs or coaches in the commercial property industry to give any insight on how to get started. I asked Austin to comment on this and he responded “Yes, the public and more out spoke investors in our country are known for doing deals with no cash out of pocket, but they don’t really share how we do it. Honestly we don’t want a lot of new people coming in our niche and getting in to it.. that’s what I hear a lot from other investors.. I think it is only going to help us long term. There is a fear it will hurt the industry if a bunch of newbie’s get into it a lot of “old money” that doesn’t like the idea of sharing the pie.” This of course makes since and yet I was curious how income, job, credit and assets would play into commercial real estate. 

Austin replied “All of that stuff doesn’t matter a lot while investors, banks and lenders are going to look at that what they really are looking for and wanting is to see you have skin in the game.” I have heard many times myself about this and understood why. After all if a bunch of newbie’s had nothing in a deal and the investor or bank had all of its money in a deal – that’s a lot of risk. I asked Austin to expand on that and he explained “If you can get a large cash down payment put in escrow for the deal the bank or investor is very likely to give you funding if the deal cash flows well and they know a cash down payment is being put up on the deal. The challenge is finding the ones who are alright with your down payment coming from any source. Many investors and banks will want you to put the money down out of your own pocket or to put a lien on other property you own. Those are what we call the non investor bankers and low risk lenders. There are many lenders who just want their equity protected and are alright with the down payment coming from hard money or private lenders. they don’t really care. Of course they are not going to fund deals that do not cash flow and that can support the debt payments.” 

I asked Austin how I could learn more about this and he actually has a very easy program, it’s very short and to the point and explained the process and he even did all my home work for me in it with vendor contacts! You can check out his program as well at http://www.CREprogram.com/austin