If you have never considered commercial real as part of your wealth creation strategy, now is a great time to take advantage of the many opportunities available. If you are first starting out, depending on your personal management skills, aversion to risk, and abilities there are several choices to consider. For those only seeking to diversify their portfolio in the capital markets, you may choose to invest in a real estate investment trust (REIT). The advantage of a REIT is you invest just as if you are purchasing stock in a company with the company of many collective investors. You will find REIT’s normally purchase large investment grade properties e.g. (office buildings, industrial warehousing, large multi-family projects and a vast array of large scale projects). The REIT handles day-to-day management, investment and yield strategies and provides dividends just as you would find with other funds in the capital markets.
Another investment alternative is to be a direct investor by purchasing a single tenant NNN property, e.g. Dollar Store, Auto-Parts Supplier Store, Drug Store, Medical Office Building or other retail or office opportunity.
The advantage of this type of lease is no landlord responsibilities in regard to paying property taxes, building and liability insurance and maintenance of the property. Generally, these types of opportunities are available between $250,000 to below $5,000,000.
If you are not quite ready to join the ranks of someone seeking a larger investment, a good starting point is to purchase a small multi-family property. These may range from a (2) unit duplex to a (10) unit apartment building or maybe something greater. The advantage of this type of investment is the ability to enter the world of commercial real estate investing without the investment of huge funds. The biggest challenge is generally, you are also the property manager which obviously requires financial management and people skills.
Lenders are ready to lend money to qualified candidates, now is a great time to enter the market with amazingly low interest rates. For more details about available investment opportunities, contact Rob Millman at (812) 528-3028.
