How to Start Investing in Commercial Real EstateKenneth Lee, VP for Acquisition LandhouseLeaders.com

Commercial Real Estate

• Commercial real estate refers broadly to building or lands not intended to be used as a single family residential dwelling and from which profit and capital gain are expected.

• An apartment building is considered commercial – as long as the property is not meant to be occupied by a single tenant, it is considered commercial.

• Office buildings, apartment complex, retail and restaurant spaces, warehouse facilities, land intended for agricultural purposes and development are some of the most common examples of commercial real estate properties.

• Cash inflows from commercial real estate include rental income, income from parking fees, royalty fees and property management services among others.

What are the advantages of commercial over residential real estate?

It is a lot easier to raise capital for commercial real estate deals compared to raising capital for residential deals. This is because investors of commercial real estate properties can pool their capital and invest jointly. Unlike residential deals where financing is almost always from banks, financial institutions or 3rd party money lenders, commercial real estate can take advantage of “crowd funding”.

The commercial real estate industry is also a lot less competitive – which is a good thing for people like you who’s thinking of taking the plunge into commercial real estate.

Assembling your commercial real estate team

If you are really serious about commercial real estate and you have some starting capital to spare, you should hire a realtor/real estate agent specifically involved in commercial real estate. You’ll also be needing an accountant, a lawyer and a mortgage broker.

Your accountant can discuss the financial aspects and options of buying commercial real estate.

Your lawyer can help you draw up any contracts pertaining to buying or leasing a property.

A mortgage broker can work with you to obtain the necessary funding for your real estate investment.

Of course, your realtor/real estate agent is there to guide you in every step of the way and sometimes, he can fill the roles of the others.

If you want to learn more about investing in commercial real estate, visit our website and/or give us a call.