Signature Services

  • Property Acquisition
  • Asset Management
  • Turnkey Commercial Property Investments

Why Invest in Commercial Real Estate

I invite you to take an objective look at commercial real estate investing to see the advantages it holds, particularly compared to other Investment Vehicles. Many people throughout history have either made their fortunes or maintained their fortunes in commercial real estate. The people I know personally who have done that strongly believe it is the best way to build passive income streams that result in growing Net Worth and long term wealth.

Visit this website often, and ponder the following reasons to invest in commercial real estate. See how many of these could apply to you.

  • Commercial real estate is a direct investment – you actually own the underlying asset. You are buying a viable business with expectations of a positive cash flow and appreciation.
  • You can choose your level of investment. Some investors choose to be a passive investor owning a small portion of a project, and others may choose to be an active owner and control 100% of the property. Any level of involvement is available in commercial real estate.
  • You can build a proforma during the Due Diligence on the property that will allow you to predict profitability – Cash Flow and Appreciation – with a reasonable degree of accuracy. If it doesn’t meet your objectives for profits, you don’t do the deal.
  • Because Net Operating Income determines the value of the property, you can have control over increasing the value. Increase the income, or decrease expenses or a combination of both, and you make your property more valuable. The value of your property is not just at the whim of the general market condition or the mood of the economy.
  • You can literally force the appreciation of the property by doing things you can control. Increase the income by improving the property and its management, decreasing vacancies, and improving tenant base. Decrease the expenses with a high quality professional property manager, minor rehab, and utilities paid by the tenants. This leads to an increase in the Net Operating Income. In a 150 unit apartment complex, a $20 per month per unit increase in the Net Operating Income produces an increase in value of $450,000 at an 8% CAP RATE.
  • Market cycles are identifiable and slow. You can see buy and sell indicators in plenty of time to maximize profits. And it is this slow nature of the cycles that keeps the volatility low.
  • Commercial property as an investment class is non-correlated with residential real estate, stocks, bonds, mutual funds, and commodities. Even the different asset classes in commercial real estate, as well as geographic locations, are non-correlated. This again helps to reduce the volatility of your investment portfolio.
  • The price/value of a commercial property is more objectively determined than other investments. Price is determined by the Net Operating Income the property produces. And all this is verifiable by basic mathematics. No mysterious, hidden formula or secret ingredient here.
  • These investments are less liquid than stocks, bonds mutual funds, or commodities. And therefore less volatile. They are not prone to wild, value swings based on daily emotion or sentiment.
  • There are possible tax benefits such as building depreciation, cost segregation for accelerated depreciation of some items, tax free distributions from refinancing, 1031 exchanges on sale of property, etc. These may or may not apply to you, as directed by your tax advisor.