Active commercial real estate investments
Active real estate investments are ones in which the investor manages the investment themselves. This typically means owning a portion of the investment and carrying a part or all of the risk and liability. While not always the case, active investing typically produces a higher return than passive investing. Active investments earn income in two ways:
- cash flow from rental income and
- appreciation, or adding value to the property.
How to buy and manage a CRE property yourself
If you actively invest in commercial real estate, you’re doing the work to find, fund, acquire, manage, and dispose of the property. While you may have funding partners, investors, a third-party management company, or a team of people helping you, you’re ultimately responsible for the success or failure of the investment.
Most active CRE investors choose a sector to specialize in. They might buy only multifamily homes