A Fuse Burning at Both Ends

Great wealth has been grown and preserved by investing in commercial real estate assets, and one of those reasons is for what I like to call “the fuse burning at both ends” concept. Lenders love commercial real estate. It is a highly financeable, secured asset that does not move. That’s why the bankers love it. When you [...]

Conducting Thorough Due Diligence

When you are purchasing something for several million dollars, it is incredibly important that you give yourself an opportunity to conduct serious due diligence on the isolated asset. At our firm, we have over a 100 point checklist of documents and items that need to be reviewed and cleared before we can close. No matter what [...]

Which Kind of Real Estate Investor Are You?

There are many ways to invest in real estate. Many asset classes. Many styles. Many locations. Etc. Savvy investors are able to generate a return on investment in many unique niches. But ultimately, it comes down to two very distinct styles. 1. Buy and Hold 2. Value Add Buy and hold investors acquire real estate simply [...]

Understanding the CAP Rate

In previous posts, I've discussed NOI or Net Operating Income. In case you missed it, your net operating income is the amount of income a property is throwing off after all expenses like taxes, insurance, utilities, and maintenance, but before debt service. Once you have a handle on the properties NOI, which is a concrete number, [...]

Understanding Net Operating Income

The first question out of my mouth when someone is presenting a deal to me is: "What's the current net operating income (NOI)?" Net operating income is the amount of income a property is throwing off after all expenses like taxes, insurance, utilities, and maintenance, but before debt service. The reason we do not initially look [...]

Commercial Real Estate Tax Benefits

Depreciation, 1031 Exchange, Long Term Capital Gains Over the next few articles, we're going to briefly explain why real estate is a truly tax-advantaged asset class. First, we'll talk depreciation. As time goes on, history has shown real estate overall as an asset class goes up in price. But one of the great advantages of investment [...]

Investing In Commercial Real Estate Vs Residential Real Estate

I'm often asked by prospective investors and partners if we ever get involved in residential real estate deals. While I know many successful home builders, rehabbers, and residential landlords, my answer is always the same: NO While I have been involved in successful residential deals in the past, these days our firm solely focuses on commercial [...]

Middle Market Deals Offer Superior Risk Adjusted Returns

Middle market deals ($5 to $50mm) are the ideal acquisitions targets for commercial real estate investors seeking to generate superior risk adjusted returns. Superior not only to other commercial real estate assets, but to all other investment opportunities in general in my opinion. Why middle market assets? The middle market sits in a perfect “white space” [...]

The CAP Rate Trap

One of the most important metrics an investor looks at when analyzing the acquisition of a piece of commercial real estate is the CAP rate, or the properties net operating income divided by its hypothetical purchase price. It’s a straightforward way to figure out how many times “earnings” a property is being offered for. And while [...]