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Starting Commercial Property Investing Tips

 


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Most would-be real estate investors already own a personal residence, so buying a single-family house to rent out merely repeats a familiar purchase process. In contrast, small investors usually
steer clear of commercial and multifamily investments. Most likely, they fear that such properties cost too much or require extensive expertise. Neither of these perceived roadblocks is true.

In fact, at the age of 21, I began investing in multifamily properties with a 5-unit property, followed by a 7-unit property, and next added 10 units to my portfolio. If I could manage to buy and operate such properties, so can you. Neither beginning nor seasoned single-family residence (SFR) investors should fear investing in commercial properties or apartment buildings. A physician in Atlanta recently asked me for advice. I suggested that he look for a 4- to 12-unit apartment building or perhaps a small office building or shopping center rather than the single-family houses that he was considering. I set forth these reasons:

Cost of acquisition
Cash flows relative to price
Search time
Management
Tax-free, trade-up potential
Owner and/or partner financing
Possibilities for creating value
Cost of Acquisition

The median price of a single-family house in the United States now stands at $225,000. In higher-priced areas such as San Diego, San Francisco, Boston, New York, and Washington, D. C. , the median price of a single-family house exceeds $500,000. Unless you invest in less desirable neighborhoods-and even there, house prices can still seem out of reach, such as in East Palo Alto, California, or Chicago Southside-single-family investing becomes too costly for most investors of average means. By “too costly, " I do not refer only to price. Rather, I refer to price relative to rent collections. In San Diego, for example, a $500,000 house might generate no more than $2,000 a month in rents. Even in my (relatively) low-cost city in Florida, a $250,000 SFR typically rents for $1,000 to $1,300 a month. Put 30 or 40 percent down and these properties still throw off negative cash flows. (New investors feel like they are being eaten by alligators. ) Homebuyers, too, are realizing the advantages of owning income properties. Owner-occupied duplexes, triplexes, and fourplexes are attracting renewed interest. Individuals or families

Step-by-Step, under $80 bucks! Training Videos on How to Build or maintain a Powerful commercial property Portfolio, covers land, apts, multifam, retail and more! - all in 1 system

http://www.commercialprofitblueprint.com

By: Raymond Pedersen

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