search foreclosure information

New to Avoid-Foreclosure-Services? Here you'll find a free answers to foreclosure questions and how to stop foreclosure!

help prevent foreclosure Simply quote your foreclosure refinance and receive a free advice from foreclosure specialists. You have nothing to loose. Compare ways to stop foreclosure safely and securely.

Relevant searches
What other people who read this article are searching for:


  • Forclosed Land
  • Invest In Foreclosures
  • Tax Foreclosure Properties
  • Bank Owned Properties
  • Indiana Foreclosed Land
  • Foreclosure Properties Los Angeles
  •  

    Which Types of Commercial Property Should You Invest In?
    by David V. Tran


    When it comes to commercial real estate investment, investors often want to know which types of properties they should consider investing. This article discusses about 5 groups of properties and reasons why you should or should not consider them.

    1. Land: the people who invest in raw land often hope to buy agricultural land near commercially-zoned land at a few thousand dollars per acre. They dream their lot will be re-zoned to commercial in the near future which is worth hundreds of thousand dollars or more an acre. People who convince you to invest in raw land often try to sell you this dream. While this dream actually happens just like it's possible to hit the jackpot in Las Vegas, the reality is most investors lose money or get little return in land investment. It is a very risky investment as land generates either no or very little income. From an income tax viewpoint, land does not depreciate in value so you cannot claim depreciation. On top of that the interest rate to land loan is also very steep compared to other types of commercial properties. So each month, you would need to come up with money to pay for the mortgage while collecting none. You should consider invest in land if you

    - Know how to develop so you could convert raw land into a shopping center.

    - Know exact what you do and have deep pocket.

    - Own the land of a shopping center (you don't own the buildings).

    2. Apartments: this is a management intensive investment as the turn over rate is high. The leases are short-termed often at one year of month to month. As tenants move in and out, you would need to spend money to get the unit ready for occupancy. Apartment tenants tend to have higher late payments history than other tenants as they are more often have a tighter budget. If you don't like the headaches dealing with lots of tenants, you probably want to stay away from apartments. The key to successful apartment investment is to

    - Control or minimize the expenses. This may sound like a trivial task until you see the expense list provided by the property manager. These expenses include: advertising, accounting, bank fees (for insufficient funds), capital improvement, coin laundry subsidy, cleaning, collection fees, garbage disposal, insurance, landscaping, legal (eviction) fees, maintenance, offsite property management, onsite property management, pest control, painting, repairs, sweeping, security, property taxes, utilities and water.

    - Invest only in properties in a good location with no deferred maintenance.

    - Stay away from areas with rent control, e.g. Berkeley, Los Angeles.

    Otherwise you may end up getting little cash flow or even having negative cash flow. If one of your investment objectives is to get high cash flow, you may want to stay away from apartments. In California, if you own a 16 or more units apartment you must have an onsite manager. This increases the expenses further. In general, apartments are easy to buy and harder to sell. There are always lots of them on any markets. The upside about apartments is they tend to have high occupancy rate as everyone needs a roof over their heads. Due to this fact the interest rate for apartments is often ¼- to ½ percent lower than other commercial properties.

    3. Special Purpose Properties: These are properties designed for a specific business, e.g. restaurants, gas stations, and hotels/motels.

    - Restaurants: some investors like to invest in brand name fast food restaurant like Burger King, Pizza Hut, Jack In The Box, KFC. These are single tenant properties with long term absolute triple-net lease which often require no management responsibilities from the landlord. However, the rental income or cap rate for these restaurants is often lower in the 5-7% range. Emerging regional brand name restaurants like Johnny Carino's, Back Yard Burger, Zaxby's or Tia's TexMex tend to offer higher cap rate in the 7-8.5% range. However, when you look deeper in the financial statements they may not make a profit yet. The restaurant operators sell the real estate to investors higher cap rate and lease back the property for 20 years. They in turn use the sale proceeds to expand their business by building more restaurants. So if you are willing to take higher risks, you will be rewarded to high income with these emerging restaurants.

    - Gas stations: when you buy a gas station, you buy both real estate and the gas station business. Most gas stations also have convenience stores and sometimes several car repair bays. The profit margin for gas is fixed at 10-20 cents per gallon [many customers wrongly blame the high gas prices on the innocent gas station operators] but is pretty high for convenience store. This is considered an owner-occupied property which qualifies you to a SBA loan with as little as 10% down payment is required. If you don't plan to get involved in running the gas station, auto repair and convenience store business, you may want to stay away from gas stations as gasoline is a chemical that could contaminate the soil. Once a leakage occurs and contaminates the environment, it takes years and lots money to clean up the soil. You may even be liable to damages from owners of adjacent properties as contamination may spread out to their properties. It's almost impossible to sell your property as no lenders want to loan the buyers the money to buy it.

    - Hotels/Motels: once you buy a hotel/motel, you buy the real estate and a 24-hour-a-day 365-day-a-year business. This business requires hard work, and marketing skills to get the rooms filled. The rooms are worthless if they are vacant. The business tends to be seasonal and may be affected immediately by economic downturns and political events, e.g. 9-11. Many of these properties are owned by Indians with the last name Patel as they seem to work harder and know this business well.

    4. Office Buildings: these properties are single or multi-story buildings. The older two-story office buildings without elevators tend to have trouble finding tenants on the upper floor as many service businesses may have physically-challenged customers who cannot walk up the stairs.

    - Single-tenant buildings: the properties are used as corporate headquarters of big corporations like Cisco. These big buildings tend to be more sensitive to the economy. Once vacant, it's hard to find a replacement tenant.

    - Multi-tenant buildings: these properties are leased by small businesses, e.g. real estate, tax accountants. Investors who purchase these properties want to spread out the investment risks. When one tenant vacates a unit, you lose just a small percentage of rental income.

    - High Quality Tenants: most of them have good credits, lot of assets and promptly pay the rent when due.

    - Leases: The leases for office building vary from full service [landlords pay property tax, insurance, maintenance and utilities] to NNN [tenants pay property tax, insurance, maintenance and utilities]. The NNN lease is a litmus test on whether the office building is in high demand by tenants or not.

    - Medical buildings: these properties are leased primarily by doctors and dentists. A good medical building should be in front of or across the street from a hospital. This makes it convenient for doctors to go back and forth between hospital and their offices. Some investors prefer medical buildings as medical tenants are very recession proof.

    5. Shopping/Retail Centers: These centers are mostly single-story and can accommodate wide varieties of tenants: retail and service businesses, restaurant, medical, school, and even church. As a result, this is the most popular type of commercial properties that investors look for. They are always in high demand as there are more buyers and few sellers.

    - Multi-tenant strip: the advantage of this investment is when a tenant moves out, you only lose a portion of the total income while you are looking for a new tenant. So you spread out the risks in this property.

    - Single-tenant building: The advantage is you just have to work with one tenant. Some of the tenants, e.g. Costco, Home Deport, Walmart, CVS Pharmacy sign 10-20 year lease and guarantee with their corporate assets which could be worth billions of dollars. This makes your investment very safe.

    - High Quality Tenants: most of them have good credits, lot of assets and promptly pay the rent when due. They often sign long term 5-30 year leases so you don't have worry about finding new tenants every year. They keep your property in good condition and sometimes even spend their own money to make it look better in order to attract the customers to the stores.

    - Triple Net (NNN) Leases: the leases for retail centers are often in favor of the landlord. The tenants pay a base rent and reimburse the landlord for property taxes, insurance, maintenance and sometimes even property management fees. This takes away a lot of risks from you as an investor. The NNN lease in a sense is a litmus test on whether the property is in high demand by tenants or not.

    - Ground Lease: occasionally a retail center with ground lease is for sale. When you buy this center, you only own the improvement but not the land underneath. It could be a trophy property but you should think thrice about investing. Once the ground lease expires and the land owner refuses to extend the land lease, you own nothing! So it's easy to buy this center but very hard to sell.

    David V. Tran is the CEO at eFunding, Inc., a commercial real estate brokerage, commercial loan broker, property management, self-directed IRA investment and syndication company in San Jose, CA. His website is http://www.efundingcom.com He may be contacted at (408) 288-5500. eFunding does business in all 50 states. You are welcome to share this report, unedited and in its entirety, with anyone you like. You may not remove this text. © 2007 eFunding, Inc.

    More info on your stop foreclosure information search:

    Get Free Foreclosure Advice and Free Refinance Quotes
    Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...


    Land Investment in the UK - Eight Things Smart Investors Know
    UK land represents some of the best investment land available. These eight facts, presented by a land planning and land investment expert, will tell you what wise investors already know about investing in land 1) Investing in UK Land is a real asset You can see, use, and most importantly, build on ... more...

    A Summary Of The Ways To Profit From A Land Investment
    It will come as no surprise to those investing in land that achieving planning permission on a UK land site is where lies the most lucrative investment land returns, but there are other ways to make money from a land investment, writes Alex Way. Where once English land ownership was the sole ... more...

    The UK Land Registry - How It Can Help The UK Land Investor
    A UK land investment transaction can be made easier by utilizing the UK Land Registry. The following questions and answers will give you a brief summary of what the UK Land registry offers and how the land investor can use the registry to their advantage: What is the UK Land Registry? The UK Land ... more...

    Land and Farms for Sale in Kentucky
    Buying land as a real estate investment grows more popular all the time which means you can't lose purchasing land and farms for sale in Kentucky. It doesn't matter if you looking for land to build a home on or land to use as grazing fields, land is always a sound investment. That makes farms even ... more...


    More on forclosed land...

     

    avoid foreclosure services
    Home
    search foreclosure info answers
    Search
    about  us
    About
    privacy policy
    Privacy
    terms of service
    Terms
    contact us
    Contact
    information for doeclosure specialists
    Agents
    Foreclosure Refinance: Stop Foreclosure Refinance , FHA Foreclosure Refinance, VA Foreclosure,
    Ways to Stop Foreclosure: How to avoid losing your home, Foreclosure Help Loans, We pay cash for houses, Foreclosure Mitigation, stop foreclosure in Alabama, stop foreclosure in Alaska, stop foreclosure in Arizona, stop foreclosure in Arkansas, stop foreclosure in California, stop foreclosure in South Carolina, stop foreclosure in North Carolina, stop foreclosure in Colorado, stop foreclosure in Connecticut, stop foreclosure in Dakota, stop foreclosure in DC, stop foreclosure in Delaware, stop foreclosure in Florida, stop foreclosure in Georgia, stop foreclosure in New Hampshire, stop foreclosure in Hawaii, stop foreclosure in Idaho, stop foreclosure in Illinois, stop foreclosure in Indiana, stop foreclosure in Iowa, stop foreclosure in New Jersey, stop foreclosure in Kansas, stop foreclosure in Kentucky, stop foreclosure in Louisiana, stop foreclosure in Maine, stop foreclosure in Maryland, stop foreclosure in Massachusetts, stop foreclosure in New Mexico, stop foreclosure in Michigan, stop foreclosure in Minnesota, stop foreclosure in Mississippi, stop foreclosure in Missouri, stop foreclosure in Montana, stop foreclosure in Nebraska, stop foreclosure in Nevada, stop foreclosure in New York, stop foreclosure in Ohio, stop foreclosure in Oklahoma, stop foreclosure in Oregon, stop foreclosure in Pennsylvania, stop foreclosure in Tennessee, stop foreclosure in Texas, stop foreclosure in Utah, stop foreclosure in Vermont, stop foreclosure in Virginia, stop foreclosure in Virginia, stop foreclosure in Washington, stop foreclosure in Wisconsin, stop foreclosure in Wyoming
    Foreclosure Laws: How to avoid losing your home, Alabama, Alaska, Arizona, Arkansas, California, South Carolina, North Carolina, Colorado, Connecticut, Dakota, DC, Delaware, Florida, Georgia, New Hampshire, Hawaii, Idaho, Illinois, Indiana, Iowa, New Jersey, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, New Mexico, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Vermont, Virginia, Virginia, Washington, Wisconsin, Wyoming
    Avoid-Foreclosure-Services.com is a free tool to find foreclosure information when your need it most. Avoid-Foreclosure-Services.com is not a lender, broker, foreclosure mitigation company, or affiliate of any foreclosure financial services. © 2007-2008