CI 34 – High Occupancy Rates with Military Tenants

Jason Hartman hosts a two-part show where we start with some reflections on the recent “Meet The Masters of Income Property Investing” event at The Hyatt Regency in Irvine, California. Investment Counselors, Ari and Sara join Jason as they discuss the following:

1)   Establish 5 year plan for where you would like to be in 2016

2)   26-27% real unemployment rate

3)   Decline of standard of living for America (ask tenants)

4)   Which entry point are you?

a. Beginning Investor – Optimize rapid growth that can be re-invested for long term compounding
b. Growing Investor – Optimize for stable long term (inflation protected)
c. The short path to retirement – Optimize for low risk and high stability
5) Prime age for spending is 46 years old

6) Gen X is 40 million

7) Gen Y is 80 million people (early 20’s now)

8) New investors should seek returns in the 20-25% range

9) The big problem now is that people are running out of money before they die

10) Social Security will not work (look at Greece). People are living longer too now.

11) Young Investor

a. Huge impact on higher returns early in your investing career (bell curve)
b. New Investors also have the opportunity to cherry pick high return small deals to start their career
12) Investing $1,000 annually (9k) from age 21-30 and letting it compound, or $1,000 per year after 30 years old (35k). Early investor will win.

13) Invest while young and seek safer investments when older.

14) The growing investor

a. Stability matters
b. Inflation creates volatility by disconnecting the nominal (name only) value or real value of assets
c. Income properties are best positioned to create inflation protected, stable growth
15) Investors need to leverage and make debt work for them (redistribute wealth)

Commercial Real Estate Isn’t Just Apartments

We’re going to be talking about different types of commercial real estate investments here but keep in mind we do NOT suggest you collect all your spare change and put it down on a multi-million dollar property. At Commercial Investing Center, we’re still not too excited about returns in commercial property except for perhaps mobile home parks and self-storage facilities. Having said that, let’s take a look at the various types of commercial options available if you were in the market.

Apartment Buildings – Many people associate commercial property investing with apartment buildings, and for good reason. When the market is right, this can be a highly lucrative way to go. Properties run the gamut from small five unit buildings to multi-story behemoths. Banks love to lend on them and the cash flow potential is excellent.

Office Space – Office space isn’t only a brilliant little movie about the drudgery of cubicle life. It is also an alternative form of commercial investing that allows the landlord to profit on something called triple net lease. This simply means the tenant pays you rent plus:

1. All maintenance and repairs
2. Real estate taxes
3. Insurance on the property

Triple net leases are often characterized by long term agreements, anywhere from 5 to 20 years, and normally come with scheduled rate increases – sometimes pegged to inflation – as time goes on. Commercial warehouse space also falls into this category.

Retail Shopping Centers – If we can say anything with certainty about America, it’s that we like to shop. In fact, urban sprawl can be easily traced by following the line of strip malls down Mainstreet, USA. Shopping center leases are usually constructed similarly to those for office space, notably on a long-term, triple net basis, and increased rental rates as time goes on. A quick note about long term leases. They can be a double-edged sword. What if the area where your property is located suddenly experiences a surge in growth, sending real estate values through the roof? There you are with ten more years on your lease. Oops. No, you can’t throw the tenants out into the street unless you have some kind of language in the contract that retains the right of sale for the landlord.

Lodging – First of all, the area of hotel and motel investing can be very tricky. It’s not recommended for most investors to start with. Sure there’s lots of money to be made. There’s also plenty to be lost. The fact most often overlooked is that buying a hotel goes beyond simple investing. You’re actually buying a business, and not an easy one to run at that. In modern day America, owning a business means rules, regulations, and the accompanying headaches. If you’re intensely interested in investing in the hospitality industry, consider buying the property and hiring an experienced company to run it. Just a bit of advice from your friends at CIC, because there are horror stories of naïve investors who find financial ruin with hotels. If that’s your dream, don’t be dissuaded. Just be very, very careful.

Raw Land Development – There are thousands of major building projects under development at any one time in the United States and around the world. If you figure somebody’s making some money off all that construction, you’re right. The downside is that, like lodging, land development from the ground up is not a rookie’s game. It can make you wealthy or send you straight to skid row without even collecting a stale cheeseburger. With land development, it’s a good idea to start small and build your way up into larger deals. Who knows, some day it might be you erecting the next Destin, Florida, condo complex that blocks the view of the sun and beach to the rest of the world. Just kidding. There’s probably not enough space left in Destin to build anything larger than a birdhouse.

That about wraps it up on our quick tour through the various types of commercial property investments. Remember, in our opinion, it’s NOT a good idea to get into commercial real estate right now, with the possible exception of trailer parks and self-storage facilities. But like it always does, the market will turn at some point, and when it does, stay tuned to the Commercial Investing Center to find out how you can learn to generate healthy profits. For now, single-family residential homes are probably the best bet for property buyers. Find more information on this wealth creation strategy at our affiliate JasonHartman.com.

The Commercial Investing Center Team

 

 

 

 

Flickr / compujeramey

CI 33 – Getting Rid Of A Bad Property and Lawyers Are Liars

Jason explores some ways to get out of a bad property then he interviews author/attorney Mark Kohler about his book “Lawyers Are Liars: The Truth About Protecting Our Assets.” Mark is an attorney, CPA and entrepreneur who has owned numerous businesses since high school, through college and even as a professional. Mark’s principal career has been as a partner in the law firm Kyler, Kohler, Ostermiller, & Sorensen, LLP. He specializes in the areas of business, estate and tax planning. Mark owns several commercial real estate projects and loves the people, transactions, and everything to do with real estate. You will be pleasantly surprised at how exciting and interesting a discussion regarding tax and legal planning can be. Jason and Mark will distill complex legal and tax strategies to common layperson terms, adding interesting stories and anecdotes.

Some lawyers, and others who are not lawyers, use fear tactics to sell the unsuspecting public various asset protection structures or strategies that are outright lies. Until now, no other professional has been willing to call out the frauds and cheats in this powerful industry where self-professed experts and do-it-yourself hacks wreak havoc on the innocent just wanting to protect their assets. This episode we will expose the liars. Undoubtedly, this book will become a desktop resource for not only the average middle income American wanting to protect his or her assets, but attorneys, estate planners and financial professionals guiding their clients through this complex area of the law. Learn the best kept secrets in asset protection planning, learn the truth about Nevada corporations, off-shore planning, land trusts and all of the so called silver bullet strategies! Mark and many other great speakers will be presenting at “The Masters Weekend: A Gathering of Experts”.

CI 32 – How To Save On Life’s Largest Expense with Diane Kennedy, CPA

Most of us spend lots of time shopping around for the best deal on the things we buy while spending more money on taxes than anything else. Why not “shop around” to save money on life’s single largest expense? Join Jason as he talks with famed CPA, Diane Kennedy, about the tax strategies of wealthy real estate investors and business people. Diane Kennedy, a preeminent tax strategist, is the founder of USTaxAid Services, a leading tax firm that works with clients throughout the U.S. and founder of TaxLoopholes, an award-winning online tax education site. Diane is the author of The Wall Street Journal and Business Week bestsellers, Loopholes of the Rich and Real Estate Loopholes, and co-author of The Insider’s Guide To Real Estate Investing Loopholes, The Insider’s Guide to Making Money in Real Estate, The Insider’s Guide to Tax Free Real Estate Investing and Tax Loopholes for eBay® Sellers.

CIS 31 – An Action Plan for Mobile Home Wealth

Join Jason Hartman as he interviews Stu Silver, The Mobile Home Man, regarding his mobile home and mobile home park investing strategies.  Learn the do’s and don’ts about investing, how to protect yourself from being taken advantage of, to know when you’re getting a good deal, and even how to inspect your mobile home to make sure you don’t find any unwanted surprises.  Stu says there are over eight million mobile home parks in the United States and you can get a good deal on a mobile home, or even possibly get one for free.  Stu’s first rule of investing is, “Protect yourself at all times!”  For more details, listen at www.commercialinvestingcenter.com.

Stu Silver has been investing in real estate for 30 years and has specialized in mobile homes for the last 18 years.  He is known as The Mobile Home Man or Uncle Zally, and has authored three books (under the penname Zalman Velvel), Mobile Home Wealth, Mobile Home Wealth Part 2, and How to Get a Good Deal on a Mobile Home or Even Get One For Free!. He also features his Mobile Home Wealth Systems on CD’s and does live Mobile Home and Real Estate Training.  Additionally, Stu writes a mobile home blog called “Kangaroo Kronicles.”  He holds the CCIM designation and is a licensed real estate broker, mortgage broker, auctioneer, mobile home dealer, and former real estate appraiser.  He has trained more than 5,000 people in real estate investing in his 3-day bootcamps and live on the internet.

CI 30 – “The Longevity Project” with Howard S Friedman

Do you want to know the secrets of living longer?  Join Jason Hartman on this episode of Holistic Survival as he interviews Leslie Martin, Ph.D. and Howard Friedman, Ph.D., authors of “The Longevity Project.”  Find out who lives longest and why.  The answers may surprise you! Visit: http://CommercialInvestingCenter.com.

HOWARD S. FRIEDMAN is Distinguished Professor at the University of California in Riverside. LESLIE R. MARTIN is Professor of Psychology at La Sierra University, and Research Psychologist at UC Riverside. They met when Leslie began graduate study in 1991 at UC Riverside, where she became a key and continuing associate in Howard’s then-launching lifespan longevity studies. Here are some facts about their work, their interests, and their qualifications.

Their scientific research on health and longevity has been published in over 150 influential and often-cited scientific articles and chapters in leading books and scientific journals. In addition, Professor Friedman has authored or edited ten academic books about health and one prior trade book, The Self-Healing Personality. His textbook on Personality is now in its 5th edition. He served as Editor-in-chief of the Encyclopedia of Mental Health, which received recognition as a “Best Reference Source of 1998” from Library Journal. His edited book, Foundations of Health Psychology was named a CHOICE Magazine Outstanding Academic Title. Professor Martin’s books include Health Behavior Change And Treatment Adherence, and a textbook in health psychology.  Leslie and Howard have spent 20 years collaborating on the research described in The Longevity Project.  The study tracks the loves and lives of 1,500 Americans from childhood to death.

Putting the research findings into practice, Leslie is passionate about adventure travel that stretches her past achievements. She climbed Kilimanjaro (to the summit), and she recently completed the Marathon des Sables. This ultra-marathon is a 151-mile self-sustaining endurance race across the Moroccan Sahara, in which runners must carry all food and clothing for the entire marathon (in their backpacks). (See picture.) Always interested in a challenge, in her early 30’s Leslie became a champion for her age group in high-jumping. When she is not in the lab or writing about health, she is planning which mountains she will next climb.
Less extreme in his physical adventures, Howard prefers swimming, hiking, and cultural travel. In addition to his research and teaching, he writes every day, including a “My Turn” column published in Newsweek, and a new blog.

Dr. Friedman is the recipient of two major career awards for his health psychology research. In 1999, he received the Outstanding Contributions to Health Psychology Award from the American Psychological Association; and in 2008, he was honored with the James McKeen Cattell Fellow Award from the Association for Psychological Science (APS), an international award and the most prestigious in his field of applied research. See: http://www.psychologicalscience.org/awards/cattell/citations/friedman.cfm

A graduate of Yale University (magna cum laude with Honors in psychology), Dr. Friedman was awarded a National Science Foundation graduate fellowship for his doctoral study at Harvard University. He is a thrice-elected Fellow of the American Psychological Association (in Personality and Social Psychology, Health Psychology, and in Media Psychology) and an elected Fellow of the American Association for the Advancement of Science (AAAS) and the Society of Behavioral Medicine.

Dr. Martin graduated summa cum laude from the California State University and received her Ph.D. from the University of California in Riverside. She has received the Distinguished Researcher Award, and the Anderson Award for Excellence in Teaching, both at La Sierra University. Former department chair, Dr. Martin has also received awards for outstanding advising and for service learning. In addition to her research on pathways to health and longevity, she studies physician-patient communication and its relationship to medical outcomes and has lectured widely on these topics.

CI 29 – Mobile Home Millions

Jason welcomes his friend and mobile home investing guru, Corey, to this episode of The Commercial Investing Show. Visit: http://CommercialInvestingCenter.com. Adding another entry to our favorite success stories, Corey started his real estate investing career in 1993 by selling his jet ski to raise enough money for a down payment on his first deal. Since then, he went on to build a sizable portfolio of real estate, including apartments, single family homes, self-storage facilities and mobile home parks. Over the past several years he has focused primarily on mobile home parks and self-storage facilities. Corey regularly shares his expert knowledge and enthusiasm for the industry at real estate clubs, national seminars and universities about investing in his favorite avenues of real estate investing: mobile homes, mobile home parks and self-storage units.

CI 27 – ROTH IRA Changes – Bypass Tough Lending Regulations – Invest in Real Estate Using Your IRA / 401k

The lending regulations have changed drastically within the past two years, causing investors quite a head ache when attempting to buy America’s most tax-favored investment, income properties. With a self-directed IRA or real estate IRA you can be in control by investing your retirement funds when, where, and how you want.

On this episode of The Commercial Investing Show Jason talks with Jennifer Williams, an expert from The Entrust Group about the current investing opportunities with your IRA and 401k. Don’t miss the latest Roth IRA conversion changes and cutting-edge strategies to invest in real estate!

2 Reasons Commercial Real Estate Investors Fail

Sometimes failure in commercial real estate investing comes along in small doses and sometimes it hits you right upside the head in one nasty blow. Regardless of HOW it comes, we at theCommercial Investing Center think it happens more times than it should. It’s not that you’re not smart enough to make this type of business work, or that you don’t work hard enough. Often, the problem is that an investor is too focused on the wrong area of the business.

Clinging to a Bad Deal
This is a big one. Don’t be the buyer who is so desperate he chases bad deals around the city, eager to close on something – anything. This is a heinously bad idea in real estate of any kind. Our founder, Jason Hartman, is fond of saying that you shouldn’t buy a piece of land unless the deal makes financial sense the day you close it. Take this advice to heart. It’s better to have no deal than a bad one. You must be in the position to walk away from ANY deal if it’s not to your liking. The lesson here: do whatever you must to wean yourself off the Marginal Deal Diet.

Find Motivated Sellers
The second reason a commercial real estate investor often runs into trouble dovetails with the first. Stay away from lukewarm sellers! You need motivated sellers. If they’re not coming to you, it’s up to you to go out and find them. Our advice is to not deal with any other kind of seller. It makes your life much easier. Consider the scenario of calling an owner who is still emotionally attached to their home. You bring a creative financing option to the table. The lukewarm seller is insulted. The motivated seller thanks his lucky stars and can’t find a pen to sign the paperwork fast enough. Which one would you prefer to deal with?

Here’s something to consider. Uber-successful direct marketer, Gary Halbert liked to pose a question to his students: “If you were in business, say the restaurant business, and you could have one ultimate advantage over the competition, what would that advantage be?”

If your answer is best service, best food, blah blah blah, you’re looking at the problem from the wrong angle. Halburt’s answer?

A starving crowd!

The Commercial Investing Center

Commercial Investing Show

(Flickr / Miami Workers Center)