The financial market greats will certainly be the first to inform you that realty investing has the possiblity to bring in great revenues. They will certainly notify you that the risks, in many cases, far exceed the gains… particularly if they are amongst the more careful investors in the industry.
Those that have made their fortunes in property, nonetheless, will certainly tell you that buying commercial property is worth every ounce of risk, if you manage to work through the rough spots.
Commercial real estate is rather special amongst all the various types of real estate investments. This is the type of property that calls for a high financial investment to enter into the game, a lot more than most properties that actually carry just as great a risk factor.
However, a lot of the risk to reward ratio depends on just exactly what type of property you're looking at, and what you personally plan to do with it.
Once you start seriously looking, you will most likely find more than a couple of choices for your commercial real estate investment. As you look and learn, you'll see why some investors find certain properties more appealing than others.
Multi-Family or Business Leasing?
Most investors find that leasing workplace, office space, or studio rooms to be the safest route to take when it pertains to commercial investing. In this case they are leasing to companies. Not to put too fine a point on it, but leasing to companies is usually more reliable… and involves a lot less headaches… than leasing to individuals in a muti-family setting.
Because the majority of businesses choose to keep their places as long as feasible, most commercial investors find this to be a more reliable and constant source of earnings. Smart business owners are aware that their suppliers and customers need to be able to locate them in order to work with them. A business that flits from here to there loses customers in the long run, so most investors feel that leasing to businesses is the more reliable proposition. They tend to stay where they can be found.
Commercial real estate investing is a bit of a different animal than the traditional residential real estate that a lot of us are acquainted or comfortable with through the purchase of our own homes. I always recommend that folks do a lot of research prior to jumping in with this specific kind of financial investment.
Commercial realty investments come in many forms. From shopping centers and shopping malls, to service and also industrial facilities, to sky scrapers as well as condominiums, you will discover various commercial property opportunities. Whether your interests lie in service or personal types of commercial property, there are substantial profits that stand to be made, if you are correctly advised and do your own “due diligence”.
Go It Alone… Or With An "Investment Team"?
Commercial real estate usually requires a large investment of funds, and many people choose to find a group of investors in order to share some of the risks.
When you're just starting out, commercial real estate can seem quite a risky investment. However, once you've established yourself a bit in the field, you will come to know other investors, and they will know you as well. When you become more experienced at watching their moves as well as they watch yours, you will discover that path to actual real estate riches is much less complicated then it may have seemed at first.
Once again, we must emphasize that qualified guidance and advice during this period is critical. If you play your cards right, commercial real estate investing can be extremely profitable, secure, and a very reliable investment strategy.
Again, when you're first starting out, to produce more reliable revenue, it is frequently best to work as part of a group of investors. Not only does this approach spread the risks to some extent, it can also help in unearthing the good buys, sharing the labor with others, and diversifying the conceptual environment.
Being able to “bounce concepts and ideas “ off of others can really help bring about a “team” focus. This can be helpful to those just starting off. Investing as a “team” is a great suggestion for those that are looking to build a flourishing future in the area of commercial real estate investing, and can be exceptionally rewarding to all those involved.
Once again, a good advisor/facilitator can help you find the right group of people, with similar interests, who might be amenable to forming an "investment group" with you. Perhaps they know of one with similar goals that would be a good fit for you? This can be a great road for the "newbie" investor, and a good advisor will know how to make the connections that could serve you well.
Look For The "CCIM" Designation
If you allow it to be, commercial real estate investing can be very daunting. Don't allow yourself to be placed, on your own, in a scenario where you feel out of control or completely uncomfortable. For your very first commercial property investment, make sure you feel comfortable.
Once you know you have a plan, the cost is right, and the deal appears to be solid, then it's probably time to make your move. Commercial real estate profits can be a serious inspiration.
Those that have actually made a lot of money in real estate, however, will tell you that investing in real estate is worth every ounce of risk, once you learn to work through the rough spots, and also find your own method of balancing that risk with the possible rewards.
Once again, expert advice is the most important thing here. Yes, there are horror stories concerning commercial real estate investment, but nearly every one of those begins with an investor blindly making uneducated decisions without the assistance of an advisor he or she could trust.
A Realtor who has earned the Designation of “CCIM”, or “Certified Commercial Investment Member”, is a certified specialist in commercial real estate investments. He or she is a recognized expert in the commercial and investment real estate industry. The designation process ensures that CCIMs are proficient not only in theory, but in practice. It takes many hours of study and testing to achieve this designation, and a certified CCIM is definitely who you want to speak with about your commercial real estate investments.
Brion Costa is a certified CCIM, and he'd be happy to consult with you on any commercial or residential real estate investment matters you have in mind. He can guide you in planning them, and assist you in making them a reality.
To talk to Brion at any time, please just give him a call at his office. He'd be glad to help you in any way he can.
Brion Costa, CCIM
Adams and Barnes
Broker Associate, Commercial Director
Certified Commercial Investment Member (CCIM)
433 W Foothill Blvd, Monrovia, CA 91016