Commercial Real Estate Investing Basics

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

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Oil Prices Fall on U.S. Stimulus Impasse, Rising U.S. Crude Stockpiles | Investing News

SINGAPORE (Reuters) – Oil prices fell on Wednesday after U.S. President Donald Trump dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy and on a larger-than-expected increase in U.S. crude inventories.

U.S. West Texas Intermediate (WTI) crude

oil futures declined 42 cents, or 1%, to $40.25 a barrel by 0648 GMT while Brent crude

futures fell 30 cents, or 0.7%, to $42.35 a barrel.

“Crude prices got hammered with one-two punch after President Trump sent all risky assets into freefall after ending negotiations on fiscal stimulus and after US crude stockpiles posted their first build in four weeks,” said Edward Moya, senior market analyst at OANDA.

President Trump, still being treated for COVID-19, ended talks on Tuesday with Democrats on an economic aid package for the United States, the world’s biggest oil consumer, with the U.S. presidential election only weeks away.

“President Trump’s decision to end fiscal

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Research shows uptick in Hispanics, Latinos investing in real estate

Even during the financial instability of the COVID-19 pandemic, the housing industry is booming and research shows it’s especially growing in the Hispanic and Latino community.

According to a new report from the Hispanic Wealth Project, even with the pandemic impacts, Latino households are seeing recovery and continued economic growth.

In order to take a look at Latino household wealth and better understand the impacts of the coronavirus in the Latino Demographic, the report used a number of datasets, including the Census Household Pulse Survey, the Bureau of Labor Statistics and Annual Business Survey.

[HISPANIC HERITAGE MONTH: UCF is third in state with largest Hispanic, Latino student body | ‘Heart to heart:’ Orlando doctor provides free care, meals through pandemic]

The report found Latinos have seen homeownership growth over the last five years. Their survey also found they were 25% more likely than their non-Hispanic White counterparts to own

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Japan’s Land Prices Drop for First Time in Three Years as Coronavirus Hurts Demand | Investing News

TOKYO (Reuters) – Japanese land prices have fallen for the first time in three years, marking an average decline of 0.6% nationwide after the coronavirus pandemic weakened demand, a government survey found.

Prior to the pandemic, land prices had been making a steady recovery with demand for hotels and other commercial properties particularly strong due to robust tourism and ahead of the now delayed Tokyo Olympics. An increase in demand for offices from companies had also helped.

But commercial land prices slipped 0.3% in the year to July 1, their first decline in five years, the land ministry’s annual survey found.

“Land prices related to hotels and shops showed relatively big changes but price changes for many other types of areas were smaller,” a land ministry official said.

Residential land prices, which have been declining since 1992 in the wake of the bursting of Japan’s bubble economy, accelerated their pace

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Indian House Prices to Fall 6% This Year, Risk to Downside: Reuters Poll | Investing News

BENGALURU (Reuters) – Indian house prices will fall more sharply this year than expected just three months ago amid surging coronavirus cases which are hurting demand in an economy fighting its deepest recession on record, a Reuters poll showed.

Even before the pandemic struck, house prices had declined nearly 1% during the January-March period from the previous quarter, according to Reserve Bank of India data. That is with consumer inflation averaging 6.67% during that same period.

Most new housing projects are either unsold or delayed due to the coronavirus spreading in the country at the fastest rate in the world – causing massive job losses, pay cuts in almost every sector and migration of labour out of top-tier cities.

That gloomy job market was likely to hurt demand and already-slowing housing market activity, suggesting a recovery would not come any time soon, according to the Sept. 16-28 Reuters poll of

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Your Daily Digest for Real Estate Investing, 09/28/2020

Multifamily market signals, survey shows improvement in small biz gloom, Colony Capital bails out on hotels, how to handle pesky tenants, and the return of the cubicle.

In Today’s News

Berkadia: 3 Numbers Signal the Future of Multifamily Real Estate

This blog post by the Berkshire Hathaway (NYSE: BRK-B) brokerage and services outfit says to watch multifamily sales volume, rent payments made, and consumer confidence scores. They paint a somewhat promising picture.

Why it matters: The Berkadia research shows that multifamily deals comprised the largest share (40%) of CRE deals in August, reflecting that segment’s resilience, and that while investment sales activity has declined during the pandemic, “there is little data to support the narrative that we will see a trend of investors fleeing primary and coastal markets.”

Small Firms Now Somewhat Less Apocalyptic About the Pandemic

Sixty percent of business owners said they will be able to remain

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Exclusive: Reckitt Kicks off Sale of Some Personal Care Brands – Sources | Investing News

By Martinne Geller and Arno Schuetze

LONDON/FRANKFURT (Reuters) – Consumer goods group Reckitt Benckiser Group

is preparing to sell some of its non-core personal care brands, including Veet hair removal cream and Clearasil acne cream, four sources familiar with the matter said on Monday.

The package of brands up for sale – which also includes E45 skin cream and Scholl foot products – could be worth as much as 1 billion pounds ($1.3 billion) in a sale, two of the sources said, based on estimates of annual earnings before interest, tax, depreciation and amortisation north of 120 million pounds.

The process comes as Reckitt is generating unusually strong sales in its hygiene business due to the COVID-19 pandemic, as people snap up its Lysol and Dettol disinfectants. It is also a strategic step for its new chief executive, Laxman Narasimhan, who has been in the top job for one year.

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Want to succeed at real estate investing? Learn to build your network.

Most real estate gurus peddling real estate courses will tell you that networking is important but it’s typically very superficial and undervalued. Many new investors just set out to build a big contact list comprised of people who have no idea who they are or why they’d be calling on any given day. Then they only make contact when they need something.

A network needs a lot of attention, and neglecting it is a major mistake. I’m not good at networking. I pretty much despise going to real estate investor meetings and listening to people pontificate about how amazing they are and overinflating the tales of their great exploits. Most of them are completely full of it. “Fake it until you make it” is a major motto in the real estate investing world, and many investors fully commit themselves to the mantra.

Networking is work. It’s not easy, and that’s

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Your Daily Digest for Real Estate Investing, 09/25/2020

Preferred punches out on student housing, apartment communities adapt amenities, open-air centers see clearer skies, what IKEA buying malls means, and some realities around reshoring.

In Today’s News

Preferred Sells Its Student Housing to TPG Real Estate

Preferred Apartment Communities (NYSE: APTS) is selling its 6,000-bed student housing portfolio to TPG Real Estate Partners for $478.7 million and exiting that segment.

Why it matters: As GlobeSt.com reports here, student housing is in a rough state right now, for obvious reasons. Investors who closely track their real estate investment trusts’ (REITs’) holdings may find this good news if this is one of them.

Apartment Communities Optimize Services, Amenities for Life Under a Pandemic

National Real Estate Investor says multifamily owners and managers have adjusted to long-term life under COVID-19 by adapting how they offer amenities to residents.

Why it matters: Read on for multiple perspectives on the challenges and opportunities that

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Your Daily Digest for Real Estate Investing, 09/24/2020

Shrinking office space, converting factory space, mortgage forbearance updates, who’s on third place, and a big huzzah for the Big Apple.

In Today’s News

Office Market Could Shed 145 Million Square Feet in Two Years

A new Cushman & Wakefield (NYSE: CWK) report says the U.S. office market could shrink by 145 million square feet in the next two years and that vacancy rates won’t return to pre-pandemic levels until at least 2025.

Why it matters: Cushman & Wakefield is a global leader in property management and puts considerable resources toward trying to understand what’s happening now and what comes next. The scenarios reported here by GlobeSt.com are just a couple of possibilities. You can download the whole report off this page.

Yesterdays Factories, Todays Apartments: Conversions at All-Time High

About 800 old buildings around the country have been converted into apartments in the past decade,

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