Many people are concerned that now might not be a good time to invest commercial properties. However, consider these interesting facts:


Commercial properties have held their value despite the recent downturn in housing prices
Foreclosed homeowners are moving back to apartments and pushing vacancies down
Office and retail property owners who are worried about the economy are more willing to sell on creative terms Private lenders, tired of the stock market, are looking for other places to place their funds
In addition to it being an excellent time to invest in commercial properties, you'll find that commercial investing offers you four wonderful advantages: 


Increased Cash Flow:  If your rental home doesn't have a tenant, you won't have any income coming in.  Unfortunately, you still have to pay all the expenses! If you own a twenty-unit apartment building, however, you still have the other eighteen units sending you payments even if two tenants leave.
 
The Manager Deals With It:  Because you have multiple tenants all in one location, you can afford to hire full-time property managers for your properties. This means more free time and relaxation for you.
 
Predictable Cash Flow:  Unlike the one-year leases common for homes, commercial tenants are usually locked into your lease for multiple years. In addition to paying the rent, they also pay for the taxes, insurance, and property upkeep.
 
Cash Flow & Property First, Borrower Second:   When you buy a single family home, the lender looks at you and your credit first and the property second. With commercial properties, the lender looks first at the cash flow, then at the condition of the property, and lastly at the borrower's credit rating. 
It is important to choose the type of commercial investing that best matches your particular needs and interests.  Here are the advantages and disadvantages of the various types of commercial investments:
Apartment Building Investments:  Apartments are great commercial real estate investments because they're easy to find, banks love to lend on them, and they're great cash flow generators. We recommend you invest in at least one apartment building before you consider investing in any of the other commercial asset types.  


Retail Centers Investments:  Retail centers (also called shopping centers or malls) are great commercial property asset types for certain investors. These properties are leased out on a long-term triple net lease basis where the tenants pay for all the expenses. What does this mean for you as a commercial real estate investor? Your rates of return won't go down over time as the taxes and expenses go up. As a matter of fact, as rents go up over time, your returns just keep getting better and better.
 
Office Building Investments & Warehouse Investments: This type of investing can't be beat for passive income generation. A triple net lease is used, which means the tenants pay for their rent and maintenance/repairs, property insurance, and real estate taxes. After the tenants pay for all of the expenses and you pay the mortgage, the rest goes into your pocket. You can even hire a property management company to find the tenants for you.
 
Hotel Investments & Resort Investments: This investment type is not for the beginning commercial real estate investor.  However, experienced commercial real estate investors find this type of asset to be fun and highly profitable to own. It's highly recommended that, as an investor, you do not attempt to operate the investment property - just invest in the hotel or resort, then lease it to another company to operate it.
 
Land Development Investments: This is one of the most exciting types of commercial real estate investing. It can also be an area that will teach you some quick and painful lessons if you jump in without know what you're doing. If you take land that isn't yet fit for building through the development approval process, you can dramatically increase the value of the land and your profit. Starting small allows you to get comfortable with the land development process before tackling the more challenging investments requiring the investor to raise millions of dollars.

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Matt Malouf

Norwalk, CA

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Prudential California Realty

Address: 11642 Firestone Blvd., Norwalk, CA, 90650

Office Phone: (562) 443-7042

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Just my little online communicae as I actually think of something to type while in front of the computer....usually just out in the field doing my thing.....


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