Residential – the Best Kind of Commercial Real Estate

Commercial real estate is a giant umbrella of sorts. What usually comes to mind when speaking about this subject are offices, retail spaces, airports or church buildings. Along the lines of commercial investments though, are homes that carry multiple units, whether this consists of two, three, four or 100 homes – within the home.

In fact, these types of investments are the best kinds for today’s real estate climate. Here’s why:

· The population is ever increasing, with no signs of slowing down.

· The cycles of rent will continue at an unstoppable pace, as older generations buy new homes, and younger generations start out with rent.

· Multiple generation homes are increasing too, and these multiplexes offer a comfortable solution for living within the same place.

· Fortune 1000 companies are recommending employees to work out of their homes. As a result, many office spaces have closed up shop and are manning operations virtually.

· Technology also eliminates the costly overheads of running a brick and mortar store.

Based on these reasons, there’s been a decline in commercial property leases. There are no statistics needed to disclose this. Just drive or walk along any city in America, and the situation is evident with commercial lease signs plastered across windows. Meanwhile, the same cannot be said about residential properties.

Property owners for housing still have a clear advantage with excess demand. Renters are required to undergo rigorous screening, prove their income, background, and the likes.

Investors should therefore look closely at commercial properties such as mobile home parks, single family homes or multi-family homes versus retail and office.

Warren Buffet has done this successfully for years. He saw opportunities in mobile home parks, where others saw cynicism.

Bottom line: Everyone needs a place to stay.

In addition, Jason Hartman advises readers about the profitability of self storage units. With the unstable levels of unemployment seen across the nation, people are moving freely to where the jobs are, or where there’s support from family and friends.

Again, measure the scale by the amount of U-haul trucks you see lining the streets on busy days. No statistics are needed.

Bottom line: Everyone needs a place to store possessions, while transitioning from place to place.

Instead of delving into the uncertainty of office spaces, Jason Hartman recommends residential units in plexes or mobile parks, as well as storage. (Top image: Flickr |Omaha Homes for Sale)

The Commercial Investing Center Team


3 Reasons to Invest in Mobile Home Parks

Mobile home parks are a hidden investment opportunity compared to other commercial real estate. This is because it isn’t as widely advertised.

Let’s examine three reasons to invest in mobile home parks from the long-term cash flow angle:

1.Low Rent – Americans have downgraded their homes and lifestyles due to the recession and other factors. The low rents in mobile home parks make it appealing to renters. How does low rent boost profit margins? By calculating the total revenue of all the homes within the park, as well as the land space, the figures add up to a significant amount. Experts agree that pricing rent low contributes to sustained high-demand.

2.Low Supply and High Demand – There are over 50,000 mobile home parks within the United States. In addition, construction of new mobile homes are somewhat at a standstill. This means that old and available supplies are met with high demand.

3.Success Rates – One of the best ways to become financially successful is to gain the wisdom of those who have already accomplished the feat. Warren Buffet, unlike Donald Trump, is reportedly the biggest investor in mobile home parks, whereas Donald Trump invests in luxury real estate. Which market do you think is easier to tap into? Another Fortune 500 maven, Sam Zell, made his riches through mobile home park investments. Average men and women also have the opportunity to succeed in this market through due diligence research.

Despite these appealing factors, investors will need to exercise business savvy to get a good return on investment.

Jason Hartman advises:

  • Buying in a Central Location – This key tip is the difference between having a large vacancy or full occupancy.
  • Keeping Prices Reasonable – A low-price strategy contributes to long-term clients. Consider this: What would make a consumer remain in a mobile home park if they were able to relocate to a bigger home for the same price? The key to keeping mobile home park renters is low rates.
  • Cutting Expenses – Despite keeping rental prices low to secure a low-income target market of renters, mobile home park owners should additionally seek ways to reduce expenses on their end. A good example is researching the most affordable utility companies in the area, verses sticking with the most popular service provider.
  • Securing Insurance – In the event of a natural disaster, make sure you’re covered. In the same breath, ensure that the location is one that isn’t prone to hurricanes or a popular route for natural disasters.
  • Cooking Up An Exit Strategy – For mobile park owners who are not satisfied with the investment, the alternative would be to sell for a tasty profit.

Ultimately, lucrative mobile home park investing boils down to accessibility for the target market in terms of low price and convenience to the metropolis. (Top image: Flickr | KOMUnews)

The Commercial Investing Center Team


4 Ways to Achieve Financial Success

It’s safe to assume that the majority of folks want to become financially successful. Accomplishing this and maintaining the income allows us to do the things we like, whether this is travel, sports, or simply relaxing without care.

But how exactly does one get to this stage? And most importantly, how does someone retain a passive income?

The answer isn’t clear cut, as there are numerous ways to secure an income. However, we’d like to start with the basics and also make recommendations for starting the first steps.

Top 4 Ways To Achieve Financial Success:

Financial Education – Could you build a car with no knowledge on the subject? How about launching a rocket ship to space? Higher education may be a priority for many folks, but still there’s a large percentage of Americans who are financially illiterate. For those of you who want to become financially successful, we recommend that you start with the simple basics of finances. Find credible material that will help you understand the different forms of investments, as well as budgeting. Once you’re an expert in the subject area, no matter which avenue of wealth you pursue, it’ll become easier to maneuver through market downturns, and also ensure profits for the long term.

Interest – No, we’re not talking about bank interest on your account, even though this is a great idea. Instead, what subjects or niches are you interested in? Determine this and then aim to be the best the field has ever seen. How does this correlate to becoming financially successful? Simple. People pay for expertise, and the better the service or product, the higher rate of pay, savings, and opportunities to invest in more streams of revenue.

Commercial Real Estate – It’s true. Real estate is one of the best ways to make a passive income. Not everyone who delves into this market will succeed though, but the ones who are educated to make good investments will most likely win.

Plan – Nothing successful happens without a plan, unless we’re talking about the rare occasions of sheer luck. If you’re serious about financial success, create a plan for education, strategies for income, and the steps required to set these methods into motion.

Would you like to:

  • Have enough income to pay off monthly expenses?
  • Create enough for savings and retirement?
  • Have a budget for entertainment and the things you enjoy most?

Then keep abreast with Jason Hartman’s tips. Each day, you’ll be adding to your financial literacy.

We’re not saying it’s easy, but by beginning with the fundamentals, interested readers can navigate the stepping stones on the path to financial success. (Top image: Flickr | jlz)

The Commercial Investing Center Team


Diversify Investments with Commercial Real Estate

Building wealth takes time.

Do you consider yourself to be a seasoned veteran in residential real estate? If so, consider adding commercial real estate to increase your stream of revenue. Remember all streams will make their way to the river bank – your account.

Commercial real estate requires a larger investment than single family homes. Considering the expanded space, and usually central locations, the ROI will also be much more.

According to several widely recognized definitions, commercial real estate is comprised of buildings outside single family homes. This could also be a residential building, but one that houses more than one unit.

However, before getting started on such a venture, be sure to conduct in-depth research to lower the risk of loss. A popular personal finance book, The Richest Man in Babylon, advised readers to invest in worthy ventures where knowledge isn’t lacking.

Jason Hartman advises that you branch out, but not before testing the waters with research and feedback.

Here Are 5 Factors to Consider When Investing In Commercial Real Estate:

1. Location – Will the location be beneficial to prospective businesses?
2. Space – How many units divide the space, and how much profit will you be able to add to your bottom line?
3. Features – Is the building conducive to new additions that will improve its appeal?
4. Cost of Living – Will rental fees be higher or lower in this area?
5. City Codes – What fees or stipulations will owners need to adhere to?

These tips are sound advice. For instance, would you invest in a commercial property that’s miles away from the target market? Inaccessible buildings will more likely lead to loss.

For our readers who are new to this market, it’s wise to purchase buildings in areas that are centrally located for retailers, lodging, storing, even parking.

If renting space is the road to creating wealth, count commercial real estate as an accelerator of this goal. It’s a large space divided – to multiply profits.

Additionally, there are specific features that can help to market properties. These include solar energy where applicable, free Wi-Fi, and other simple additions that are seen as benefits to lessees. Ultimately, investing in these small utilities allows owners to market the property at a higher price point.

Commercial real estate is sound investment and a great source for future income. For beginners who are not yet ready for commercial investments, Jason Hartman is a wealth advisor, whose tips will help readers increase the speed to sustainable riches. (Top image: Flickr | Earls37a)

The Commercial Investing Center Team


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)

Hidden Profit Potential of Real Estate Lease Options

If you’ve never taken the time to understand how a real estate lease option works, today is as good a day as any. We’ll keep it short and sweet. Why should you pay attention? Because a lease option provides a mechanism that can boost your profit above and beyond what is available through the traditional property sales technique. A lease option does this by borrowing a twist from the stock market known as “premium,” though in real estate we refer to it as “consideration.”

Why consideration is your friend…

At a foundational level, when you sell/lease a property to a tenant via the lease option method, you are essentially renting the property at an agreed upon amount, with an option for the tenant to buy at an agreed upon price at some point in the future. If you’re familiar with the rent-to-own industry, you understand how the process works. But here’s the kicker. The tenant pays an amount of money up front, known as consideration, which might be several thousand dollars, in return for the right to purchase outright in the future.

For a tenant (who hopes to be a buyer one day), the lease option allows time to get financing together or repair bad credit. It’s really a win-win situation for both sides, though we’re focusing primarily on the seller here. The next question becomes, “What happens if the seller can’t follow through with the purchase at the appointed time?” No worries. This actually happens quite often. On the whole, many more lease options expire than are ever exercised. The good news is that the seller can then turn around and enter another lease option arrangement with another buyer (or even the same buyer), collecting another payment for consideration in the process.

See the beauty here? Theoretically, you could continue to collect consideration payments over and over as long as there was interest in the property. Sure, there’s the chance someone might eventually be able to buy you out but that’s not a bad thing, is it? The bottom line is this: even if the very first lease option you ever sell is exercised by the tenant at the appointed time, you still got money up front, and up front money is never a bad thing.

The Commercial Investing Center Team

Flickr / Steve Snodgrass

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. Visit: www.CommercialInvestingCenter.com. 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.