commercial real estate
- Thread starter Lenore
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- Joined
- Aug 30, 2007
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QUOTE (manager @ Apr 17 2009, 05:26 PM)
I am interested in learning how to invest in commercial real estate ( strip malls rather that apartment buildings). Does membership with REIN teach this aspect of investing? Or is REIN more focused on residential investments?
not really .. REIN focuses on buy-and-hold in residential properties ..
pro's of strip malls:
a) better cash-flow IF FULL, i.e. better CAP rates/yield
b) tenants pay all costs, like taxes, utilities, R&M, condo fees IF they are not in bankruptcy
c) leases can be structured in landlord's favour
d) possibly leases are long (and low) and have to be assumed by buyer of asset
con's:
a) much higher interest rate on mortgage
b) much lower loan-to-value loan amount, likely 50% at best these days
c) possibly lower cash-on-cash return
d) much lower risk adjusted cash-on-cash return
e) length vacancy if tenant goes out of business
f) very lengthy vacancy to fully vacant if major anchor tenant goes into bankruptcy
related post: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-10711-Equity_is_not_the_only_way_to_make_money_in_real_estate.html
I am interested in learning how to invest in commercial real estate ( strip malls rather that apartment buildings). Does membership with REIN teach this aspect of investing? Or is REIN more focused on residential investments?
not really .. REIN focuses on buy-and-hold in residential properties ..
pro's of strip malls:
a) better cash-flow IF FULL, i.e. better CAP rates/yield
b) tenants pay all costs, like taxes, utilities, R&M, condo fees IF they are not in bankruptcy
c) leases can be structured in landlord's favour
d) possibly leases are long (and low) and have to be assumed by buyer of asset
con's:
a) much higher interest rate on mortgage
b) much lower loan-to-value loan amount, likely 50% at best these days
c) possibly lower cash-on-cash return
d) much lower risk adjusted cash-on-cash return
e) length vacancy if tenant goes out of business
f) very lengthy vacancy to fully vacant if major anchor tenant goes into bankruptcy
related post: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-10711-Equity_is_not_the_only_way_to_make_money_in_real_estate.html
REIN doesn`t teach this as far as I know. My wife and I have learned how to do it, and it has a very steep learning curve, compared to residential. I would highly suggest Scott Scheel`s Commercial Property Academy for that. You can do a search on the Internet for it. It`s an American-style seminar series, so you`ll get a few sales pitches from other people when you attend his seminar. However, that being said, the quality of the education is just as good as Don Campbell`s. Don Campbell focuses a lot on reach and raw data. Scott Scheel focuses on giving you a complete education on commercial real estate (offices, strip malls, warehouses and industrial, apartment buildings), and after he`s given you a run down on all that, and explained what all the terminology is, he`ll break apart some deals so you can see the mechanics of such. He doesn`t expect you to learn everything at the first bootcamp, either...a lot of people just gloss over because it`s too much information in four days. So, accordingly he allows you to reattend at a very cheap price. We`ve also found that with each subsequent seminar, he`s included about 25% new information.
Anyways...if you`re interested in Commercial Real Estate, we`ve found that nobody covers it better or more completely than Scott.
QUOTE (manager @ Apr 17 2009, 07:26 PM) I am interested in learning how to invest in commercial real estate ( strip malls rather that apartment buildings). Does membership with REIN teach this aspect of investing? Or is REIN more focused on residential investments?
Anyways...if you`re interested in Commercial Real Estate, we`ve found that nobody covers it better or more completely than Scott.
QUOTE (manager @ Apr 17 2009, 07:26 PM) I am interested in learning how to invest in commercial real estate ( strip malls rather that apartment buildings). Does membership with REIN teach this aspect of investing? Or is REIN more focused on residential investments?