Commercial Real Estate Investment Articles

“Do not try this at home . . .” There’s a reason those guys on television ask you to not do the things you see them attempt to do. They’re risky or downright dangerous, and for a novice to do whatever it is they’re doing on the screen is just an accident waiting to happen.

The real estate contract is the most often used, yet little understood tool in the real estate business. Whether you are a rank beginner or seasoned expert, there is no excuse for not knowing and understanding real estate contracts.

We’ve all done it. Anyone who invests in real estate is bound to make a clunker deal sooner or later. I’ve been in this business for over 25 years and have made plenty of mistakes, and I am always reminded that experience is what you get right after you needed it.

In my previous article, Top 5 Mistakes of Beginning Commercial Real Estate Investors, we discussed 5 of the 10 most common mistakes investors make in commercial real estate.

More Americans are falling behind on their mortgage payments at a record pace as stagnant home prices and a convergence of weakening economic factors have taken a toll on housing affordability, according to the quarterly survey just released by the Mortgage Bankers Association (MBA).

“Flipping” is the buzzword of the year in real estate: Flipping books, flipping articles in the newspaper, and even flipping shows on TV! What is flipping, how does it work, and how you can profit?

I often hear people say they can’t get started investing in mobile homes because either they don’t have any money, or they have very little money. Just this week, Eric, a young man in our local real estate club, said he only had $5,000 and wanted to know how he could get started with such a small amount. I told him that the amount doesn’t matter; what matters is that he get started. And NOW!

For real estate agents, business brokers, and mobile home dealers and brokers, seller-carryback financing can make the difference between a “sold” or an “expired” listing. This is particularly so in certain economic cycles, like the one we are entering NOW! A majority of listings expire, UNSOLD, especially single family residential (SFR) properties.

When I go to speak to real estate clubs, sometimes my reputation precedes me: “Mr. Landlord is the guy who talks about adding extras and upgrades to your properties for more cash flow.” After speaking for nearly 20 years and publishing the Mr. Landlord newsletter for 22 years, I’ve played a big part in revolutionizing the way thousands of rental owners market their rental homes.

The question of the day for commercial real estate investors is: What is the effect of a slowing economy and possible recession on valuations? The run-up in values for some sectors has raised alarms, and opinions range from “no more than a ripple” to “impending doom.” For investors, there is much to consider in plotting our course.

In How to Profit in a Slow Economy (Part One), we discussed economic conditions and the outlook for capital availability for real estate investment. Now let’s turn our attention to the effects of those conditions on various commercial property types, and specific strategies that can profit from the current trends.

Is it too late for real estate? I’ve been investing in real estate for twenty-four years, and I’ve seen the ups and downs of the real estate market. I’ve made some bad investments, but most of them have turned out great–as long as I was prepared to stay through the bad times.

There are two common questions that involve Realtors and investors: Should I become a Realtor? How can I work with Realtors?

I get a lot of questions from people asking, “Will real estate investing work in my market?” The truth is, real estate investing works in every market. But you need to learn your market and adapt the techniques that it requires.

This last year has been a tough year for real estate investors looking for ways to cash flow their properties. I’ve talked to a lot of business owners or employees who have not yet invested in real estate and wonder if they’ve missed out on the real estate rocket. And, everyone wants to know, “What is the next big thing?” And here is my radical response: I don’t care.

When the account owner is ready to take distributions, they may do so, tax-free, as long as the account has been open for five years, and they are age 59? or older.

Okay, you’re on the front porch of a house in foreclosure, and silly you, you just knocked on the front door. What are you, crazy? Gulp! Easy, relax, we so have this thing handled . . . Now what? Don’t tell me you have to think about it, and don’t you dare tell me it’ll all be okay because you’re “just there to help.”

Analysis paralysis–one of the biggest blocks of successful real estate investing. That’s when you stumble into a good deal, then stop dead in your tracks. You worry about the decision, and never do anything. In my first six months of investing, I looked at hundreds of great deals and froze.

Identity Theft is the fastest growing crime in America today. Would you know what to do if it happened to you?

Have you ever created a deed right there at the seller’s kitchen table? If so, did you bring along a typewriter or just use theirs? Or even better, did you hand write everything up or use one of those office supply store, fill-in-the-blank forms? What are you, some kind of chucklehead or somethin’?

Partnerships can be very lucrative for real estate investors. A partnership is “a legal relation existing between two or more persons contractually associated as joint principals in a business.”

One of the most popular property types in commercial real estate are “triple net,” also known as “NNN” deals. These are typically single-tenant retail properties leased to tenants with high credit ratings on “net, net, net” terms (hence the NNN acronym), meaning the tenant is responsible for real estate taxes, insurance, and all maintenance.

In an average year, our family business will buy, sell, and finance $10 million to $15 million in deals. That volume gives us a pretty good read on market conditions, and we stay in close contact with dozens of buyers, sellers, and brokers. Over the years, we’ve learned that there are generally two types of players in this game: 1) dealmakers, and 2) to borrow a term from the car business–tire kickers.

For an overview on getting started and collecting information, read Tax Lien Investing Basics (Part One)

Fear #1: It isn’t legal or ethical to save on taxes. Fact: Well, let’s see what a Supreme Court Justice had to say about that. Justice Learned Hand said, “There is nothing sinister in arranging one’s affairs so as to keep taxes as low as possible. Everybody does so, rich and poor, and all do right. Nobody owes any public duty to pay more than the law demands.”