Commercial Real Estate Investment Articles

I’m very new at this game so I’m not sure if anyone has done this. I just bought my first property (big ol’ home) that needed quite a bit of cosmetic work: paint inside and out, new carpet, new tile, landscaping–you get the idea.

Reading recent articles about lease options reminded me of not only the lease option buying that I have done over the years, but also of the tremendous advantages of selling on a lease option. My income increased dramatically when I discovered the benefits of selling on a lease option.

Todd Bockman originally posted this article on our Main Real Estate Forum.

Here is an idea that I have not tested, but may be workable. Have the owner of an abandoned home donate the home to a non-profit organization that you have an agreement to share profits with. Then arrange for 100% financing to fix-up the home. (A great LTV with no other liens on the property should make for easy financing.)

In my last article on lease options [Advantages of Selling on a Lease Option], I listed the many benefits to you (the Optionor) of leasing to your tenants with an option to buy. This article will continue the discussion in more detail.

In part 1 we talked about some if the things that make manufactured home communities ideal investments and the different types of communities we’re liable to run into. Now let’s look at placing a value on them.

Now that we’ve found our acquisition candidate and have come to a preliminary meeting of the minds with the seller, we need to spend some time and money to see if we want to take the “relationship” further. Before we get too deep into the process, there are five items we should be aware of and think about as we progress.

At the recent Creative Real Estate Online Convention, I visited with several new found friends who wanted to learn how to figure out what a particular manufactured home land lease community was worth. After repeating our story and the basics of the business several times, I thought I’d reproduce some of those cocktail napkins for the benefit of those of you that may have liked to see them.

In Part 1 we talked about some of the things that make manufactured home communities ideal investments and the different types of communities we’re liable to run into. In Part 2, we discussed how community values are determined using the income valuation approach, how the NOI, (Net Operating Income) is arrived at, and the basic premise behind the Cap (capitalization) Rates.

In The E-Myth, Michael Gerber puts forth the reason that most small businesses fail. The business starts because a technician who is good at something (repairing toilets and other small house repairs for example), decides he should be in business for himself.

Many times people looking to get into rehabbing and flipping houses find it difficult to locate a real estate agent who will work with them. Here’s a letter I drew up to mail to agents. It was designed to be sent using our corporation letterhead. However, I’m sure you can adapt it to your own method or approach. The basic ideas can also be used when contacting Realtors either by phone or in person.

Here’s a crash course in commercial real estate terms.

These are classic, overgrown grass, and broken window situations. I am now on my third deal in three years buying a “mom and pop” roadside motel (less than 15 units each) in a rural area for less than 50% of market value. In every case, I bought these deals for no money down with cash in pocket at closing.

I own an active business, plus I own rental properties. We have over 300 bills to pay each month between the two. While I was employed, my wife stayed home and took over the bill paying. She didn’t keep on top of it, and it got totally out of control

Dealing with seniors is a whole ‘nother deal, and those of you doing so should be conscious of some real danger areas that might hurt YOU, not Granny! First, being really real and approaching “seniorhood” myself, and being all too aware that I’m basically the same sorry sinner I was at 25, 45…, I’ve got to level with you and startle you with the revelation that people don’t get any better as they get older. Older, yes, but better, no.

You’ll always make money when you are buying a property cheap, cheap, cheap. Depending on the economy, it may not be as easy as it sounds, especially in the beginning.

I found a single-family home appraised at $149,000. The seller had $62,000 in equity. I offered $105,000 all cash, which was accepted. I found a partner to front the $105,000. Refinanced the property at 80% of market value for $119,200.

You do not have to scour the courthouse or do mass mailouts to find good, small notes to buy. Just create them yourself.

Property owners who live out of state are frequently very motivated to sell their real estate. Tenants may have stopped paying the rent, started trashing the property, or the property may be vacant. It is very difficult to control your real estate investments when you live far away from it.

In my part of the country (Wisconsin), this technique is almost unheard of, but it works. Here is what I did.

4 Super Landlord Tips You’ve Never Heard

Investing in real estate or discounted paper is a wonderful way to increase the size of your retirement fund rapidly. The “Rule of 72” explains why. The Rule of 72 is a banker’s rule that calculates the number of years it will take for a sum of money to double. You divide the number 72 by the annual percentage rate you are receiving on that sum of money. For example, if you are earning 6% interest on a CD, divide 72 by 6: 72 / 6 = 12 years

For the last couple of months, I’ve sent the following postcard to every “house for rent” ad in my local paper. I don’t call on the ad, I just use a CD reverse directory to get the addresses from the phone numbers.

There is an incredible power in understanding the time value of money. The investor who understands the power of cash flows will be the investor who gets very rich. No matter what you do in your investment life you simply must understand the time value of money.

Here’s how I found seven (7) new real estate investors who will pay me cash to buy my position in escrow. I found a local chapter of “National Association Of Remodeling Contractors” and called a couple dozen names on the membership roster. I told each one: