Commercial real estate investment is a great way to make money if you know what you are doing. Commercial real estate investments basically means investing in any type of real estate transaction that is not a single family home. Generally this term is used when it refers to real estate such as apartment complexes, office buildings, educational buildings, retail properties, manufacturing facilities, warehouses, and the like. There are a wide variety of real estate properties that are considered commercial and this may include a piece of vacant land where a commercial building could be built or else a piece of land with a functioning business already on it.

Investing your hard earned money in commercial real estate is a relatively safe way to invest and it can have great profits if you play your cards right. You may not know much about this type of real estate but realize the potential and want to get involved. A great way to learn more is to take a real estate investing program so you can learn all about these types of investments. When you are better educated you may still decide to take a real estate investing seminar or two to learn all you can before you make an investment. After all, it is your hard earned money and you want to know what you are doing with it.

Most people choose to make this type of investment because it will allow them to build equity, provide rental income, or even to use for their own business. Each of these goals is specific and has different methods of managing the investment and property. However, taking several specific courses on the type of commercial real estate you are interested in will really guide you and lead you down the right track.

If you are considering renting the property you need instead of buying it you should consider a few things. First of all, buying property will allow you to gain equity, which is important. Also, you can manage your property the way you see fit and won’t be concerned with the rules and regulations imposed upon you by a property owner because you are the owner! These are just a couple of the reasons why people choose to invest in commercial real estate.

This is just some of the background information on commercial real estate and if you are toying with the idea of making an investment then do some research, make a list, and compare the pros and cons. When you do this making the right decision for you will be really easy!

By: Natalie Aranda

About the Author:
Natalie Aranda is a freelance writer. A great way to learn more is to take a real estate investing program so you can learn all about these types of investments. When you are better educated you may still decide to take a real estate investing seminar or two to learn all you can before you make an investment. After all, it is your hard earned money and you want to know what you are doing with it.

Within commercial real estate world, Office building properties are considered to be one of the riskier assets simply due to current economic condition. There are more vacancies in office building properties because not that many businesses are expanding and more are closing down. Hence the office rental demands are low. Therefore securing office building financing has been challenging as lenders and capital providers are looking for more stabilized property with high net operating income. Here is a guide to get you started on the basics of what to expect.

Commercial Loan for Office Building – The Interest:

One option is the ‘fixed rate commercial loan’, wherein the interest rate and the payments remain constant over the entire repayment period. The second is the ‘adjustable rate commercial loan’, and herein the interest rate would fluctuate annually in accordance to the prevalent market rates. Alternatively, borrowers can also opt for abridge loan, and this is where short term loans are offered at considerably higher rates of interest.

The Down-Payment:

When you are looking for office building financing, it is important that you establish the options you have when it comes not just to the terms & conditions, but the down payment as well. This is because the market is awash with a number of competitive loan options for buildings. For a good building one can look forward to put down a down-payment of around 30% of the required sum (which could go down to 10% in case of an SBA loan) assuming the net operating income would be sufficient.

The Market Factors:

The functioning of any office building depends on the local market, the local economy, local development, the building’s location, etc. This makes it difficult for a borrower to get a commercial loan for office building in a soft market. For example; in case the chosen building has a number of empty spaces, financing can be difficult to come by. On the other hand, getting an office building loan for a fully occupied building or one with a good history of steady tenants should be significantly easier.

Private Financing:

Another option when it comes to the types of loans is private financing (including bridge loans and hard money loans), and when it comes to commercial office properties, private financing could also be used as means to acquire, develop, construct, reposition, etc. This type of financing is done with emphasis on speed and mostly suitable for investors looking at opportunistic, undervalued or other situations where the investor has short time to close the deal.

By: Shawn Shayestehfar

About the Author:

Commercial real estate is a hot commodity right now. Many investors are seeing the massive potential for income associated with this type of property. It is not always clear, however, what type of commercial real estate to invest in or what part of the country to choose. With a little research, you can find the perfect location to purchase.

Columbus, Ohio is a great location for commercial real estate. Columbus is the capital city of Ohio and also one of the fastest growing. All over Columbus, new businesses are popping up and with them the need for commercial spaces. There are several notable commercial real estate companies working in the Columbus area to help people find the perfect space for them.

Another great area is Greensboro, NC. It is a growing community with great historical roots. It was once known as the Frontier Town for those looking to go west. With it’s temperate climate and friendly southern atmosphere, Greensboro is a town that attracts people from all walks of life. There are also many great commercial real estate companies, such as Kotis Properties, to help clients find their dream location. And with the attractive cost of living compared to many other parts of the country, this area will continue to flourish.

Austin, Texas also is a good investment for those interested in commercial real estate. Austin is a hot spot for families and singles. There is a growing economy and a great location. This makes Austin a good investment commercially. There are many good real estate companies in Austin. The Austin based COMMREX is one of the top commercial real estate firms. There are also some major national companies headquartered in and around Austin.

Los Angeles is one of the greatest markets for commercial real estate investors. Although it is one of the most expensive, the property values are ever increasing. Owning property in LA is like having money in the bank. There are significant advantages to owning in LA. One of the great tax benefits is that if you sell your home, you can take a profit exemption as long as you live in your commercial property for at least two of the five years following the sale of your property. This, along with the potential for income, is a great drawing card for LA commercial real estate.

Commercial real estate is a great investment. It appreciates significantly year over year, so the resale is excellent. If you decide not to sell or use it yourself, you can lease it and gather continuous income. Whether you use a firm in person or over the internet, be sure to do some research about the area first. When purchasing property, look for location. This is truly the key to finding the perfect commercial real estate investment.

By: Jon Arnold

About the Author:
Jon is a computer engineer who maintains many websites to pass along his knowledge and findings. You can read more about commercial real estate deals and areas at his web site at [http://www.commercial-real-estate-tips.com/]

Applying for commercial real estate financing is a big step. It’s not easy to get commercial property loans, especially if you are a first-time borrower. Before you apply, there are some things you should think about in order to be fully prepared.

Commercial real estate financing is different from residential real estate in a big way, according to the lender. With residential real estate, they are looking at how much the property is worth, and not overly concerned with how much it will make in the future. Residential property generally appreciates over time. With commercial real estate, however, they’ll be looking at future profits.

This means that they will be concerned less with the current worth, and more with the possible worth. As a result of this, they will be very concerned with what sort of profits the venture will generate. This is why it is very important for you to sit down and do the math. How much do you think it will make?

This means also that you should be clear on how you will use the property. What kind of business will this be? Is it going to be all for one business, or are you going to rent out units? These will be major considerations for the lender, so make sure you have a detailed plan all set out.

The actual geography of the property will also be a factor in determining whether you get your loan or not. Look at the location of the property and how that will effect the business. You will have more trouble getting financing for a place located way out in the sticks than a place on a highway off-ramp.

The size and type of the property will also be factors. You will want to look at the history of the place and make sure there aren’t any minor details that might cause trouble, like environmental problems.

Risk is the most important consideration to lenders. They will be looking at the future of the venture and, in particular, at possible things that could go wrong with the business.

A big part of this is the condition of the overall market. You can save yourself trouble later with your commercial real estate financing by studying the market and understanding its current trends. This is what your potential lender will be looking at, so it’s good for you to understand it as well. If the future is uncertain for the type of property you are trying to buy, they may be worried about making back the loan.

Before the deal closes, they will send you a “commitment letter.” This is a notification from the lender letting you know officially that you have been approved. More importantly for the lender, the commitment letter will have the terms and conditions of the loan. In other words, these are the rules.

It will tell you details about the closing conditions, rules for what you can and can’t do with the property, as well as a summary of all the terms you agreed on, making it official. Take a good look at this and make sure that it will not prohibit you from doing the things you intended when you requested the financing.

Finding commercial real estate financing is a long and drawn-out process, but if you can consider a few things before you apply, you can save yourself the headache of dealing with something unexpected later.

By: Andrew Stratton

About the Author:
Getting a lender to approve your commercial real estate financing can be a difficult process at best. It helps if you are prepared for the questions they will ask and if you know exactly what your business plan is. KISCL can offer you materials to make this task easier. http://www.kiscl.com

In our line of work, doing consulting for different high net worth real estate investors, we come across all types all types of commercial real estate acquisition strategies.

Some commercial real estate investors want to invest in only apartment buildings. Some investors wouldn’t touch apartment building if their life depended upon it because they think, as a whole, apartment buildings are over priced at this point in time.

Some commercial real estate investors want to invest in low-income housing. Others wouldn’t touch low income housing with a ten-foot pole, because they don’t want the headaches of collecting the rent and the abuse the property receives.

Some commercial real estate investors want to invest only in real estate where there’s an existing tenant to create cashflow. Others would prefer not have an existing tenant because they don’t want to pay the premium for the property.

As you can imagine, we could go on and on.

What’s fascinating is the seeming contradiction between the different strategies.

One investor’s ceiling is another investor’s floor.

But after reviewing the detailed business plans of literally hundreds of commercial real estate investors, there IS a common denominator to the strategy for their real estate ambitions.

Here it is in a nutshell:

First, they have a long-term plan. They are NOT opportunistic, looking at every single deal that crosses their path. They know their exact acquisition strategy. Whatever acquisition strategy they have, it fits into their overall wealth building strategy.

Yes, that may be common sense on paper, but in reality most commercial real estate investors, especially new ones, tend to shoe horn in whatever deal they are contemplating into their long-term plans.

They first key is that the strategy must drive the acquisitions, not the other way around.

That’s why you see some people sell off their entire portfolios of hodge podge properties. It’s a pain in the neck to corral them and so they try to get an unsuspecting person to take the winners and with the losers.

The second key strategy is they do their market research. Stated differently, they know the market or area they want to make an acquisition in.

It’s common knowledge for instance, that the major retailers know where the best locations are in the country. They just don’t put a store where think it will do well.

They put it up where they KNOW it will do well.

How do they know? They do their own research. They understand what PRIME retail space is to them based upon their needs down to the traffic patterns, congestion, local merchants and the specific growth areas within a community.

Now, some people think market research is ONLY for big companies; that it doesn’t apply to them.

If market research is one of the things you have a challenge doing, then you should look at it this way:

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There are thousands of Tucson commercial real estate properties, and you will surely find the right office or retail space, or commercial land you are looking for if you know where and when to look. Here are some pointers.

Online Tucson commercial property finders

There are a lot of helpful web resources that allow you to search by specific area, and allow you to specify whether you are looking to lease or buy, the number of square feet you need, the price range you can afford, and even your reason for buying. Most sites are owned by Tucson real estate agencies and brokerage companies, and they usually provide this service free of charge. Some sites require you to at least register before letting you access the property finder portals, though. The registration forms are fairly short – it will probably take you less than 30 seconds to complete them. Be careful about giving your email address though, because the site may start sending you unsolicited Tucson real estate news.

Perfect timing

The most optimum time for purchasing commercial property in Tucson is when the prices are low. This usually happens the properties listed outnumber the buyers. Expect that you will be able to haggle during such periods. Given the booming commercial real estate industry in Tucson, though, you may not get the lowest prices. Most sellers – especially those who bought the properties as investments – mark up about 20 percent or more.

How do you get the commercial property you want without breaking the bank? Find a good Tucson real estate agent. The key is not just to find the cheap deals – more importantly, you need to find it fast, ahead of other aggressive buyers. Choose a real estate agent that get you do the latest listings earlier and you already have a clear advantage.

To save on money, you can also look into “for sale by owner” Tucson commercial properties. This lets you are the seller cut through the middleman and negotiate your own terms. This arrangement can potentially save you thousands of dollars, but it can also cost you more if you have no background in real estate. The property may turn out to be overpriced, and without a qualified Tucson real estate agent who is well-versed in Tucson zoning and current commercial estate market rates, you will never know this until you have already paid.

By: Steve Valentino

About the Author:
Tucson Real Estate [http://www.e-TucsonRealEstate.com] provides detailed information on Tucson Real Estate, Tucson Real Estate Agents, Tucson Residential Real Estate, Tucson Commercial Real Estate and more. Tucson Real Estate is affiliated with Scottsdale Arizona Real Estate Agent [http://www.e-ScottsdaleRealEstate.com].

In order to curb some undesirable effects of the residential appraisal process Fannie Mae adopted an agreement that went into effect May 1, 2009. The code only applies to all single family loans, up to 4 units, that are sold to Fannie Mae. The code does not apply to multi-family homes or to loans that are guaranteed or insured by a federal agency. Beginning in 2010, a version of the HVCC will be adopted by FHA. Although some of the rules will be different, most will be identical to the original HVCC.

Is this change permanent? As of this moment, yes, although there are several bills in congress waiting to be heard. Specifically, one bill that requests the HVCC rules be reversed, and another that would postpone implementation for 18 months.

Does the new code require lenders to obtain an appraisal? No, a lender is under no obligation to obtain an appraisal. Also, the code does not specify the scope of work necessary for particular assignments.

Can appraisers still be “blacklisted”? Yes, an appraiser can still be blacklisted if impropriety is involved, such as influencing or trying to influence appraisal outcome. Also, the lenders are required to policies and procedures in place that can be followed that include mechanisms to report and discipline.

Can a lender still order a second appraisal? Yes, as long as the lender is not value-shopping, or trying to influence the outcome of the appraisal.

Can an appraiser still communicate with the real estate agent? Yes. This is not prohibited by the HVCC.

Is the Lender required to provide the borrower with a copy of the appraisal,and what is the time frame for providing the copy? Yes. The lender must provide a copy, if requested, upon completion of the appraisal, but no less than three business days prior to closing. The lender can send the appraisal via email or mail.

Can the appraiser collect payment directly from the borrower? No. The appraiser must collect fees from the lender or a third party authorized by the lender.

Does the Code apply to AVM’s, BPO’s or tax assessments? No, the Code applies only to appraisals.

Can a lender use a selected group of appraisers through an appraisal management company? Yes, as long as all aspects of HVCC rules are followed.

Does the Code apply to Form 2075? No, Form 2075 is an inspection report. It is not an appraisal, and therefore the Code does not apply.

How does Fannie Mae audit compliance with the Code? Compliance with the Code will be part of the lenders’ operational review.

Is the definition of application date the actual date of the application or the date of receipt of the application by the lender? The application date is defined as the date the borrower(s) signed the application certifying that the information is correct.

May an appraiser use foreclosure data? The Code does not mention foreclosure data. It is the appraisers responsibility to decide if the information is applicable or not.

Do HVCC rules apply when trying to remove PMI? No. The rules only apply for a “mortgage financing transaction”.

Are there rules regulating how appraisers are chosen off an ordering list? The lender may choose how its systems are run, as long as they abide by HVCC guidelines.

May in-house appraisers prepare appraisal reports? Yes, in-house appraisers may prepare appraisal reports.

Can a lender’s in house appraiser adjust the value of a loan? Yes, this is not prohibited by the code.

May a correspondent lender use in-house appraisers? Yes, as long as they comply with the Code.

Can a lender dictate to a broker which AMC is to be used? Yes, as long as the lender has prearranged an agreement with the AMC.

May a lender accept an appraisal prepared by an appraiser that was ordered by a mortgage broker? No. The appraisal may not be ordered directly from the mortgage broker.

Can the broker request that the lender use specific appraisers for orders from that particular broker? No.

Can a broker order an appraisal from the AMC if it was authorized by the lender? No.

Can a broker choose the appraiser from the lenders list of approved appraisers if the lender is the one to place the order? No.

Can an appraisal be transferred from one lender to another? Yes, as long as it complies with the HVCC code.

Can the borrower pay the AMC for the appraisal? Yes. The borrower is prohibited from paying the appraiser directly.

Who is allowed to communicate with the appraiser? Anyone who is not compensated by commission, anyone not part of the loan production staff, or anyone who does not report to officers or loan production staff.

By: T. Bledsoe

About the Author:
Signing up with a complete list of appraisal management companies will give you the greatest chance of bringing in quality business. For a list of over 300 verified appraisal management companies, go to http://www.amc300.com

Commercial real estate investing is an exciting and rewarding industry that yields results to which no other industry can quite compare. In fact, commercial real estate is one of the easiest ways to become extremely wealthy with limited knowledge, personal financial investment and time.

With commercial real estate you are able to return millions of dollars within a matter of a few years, and use other professionals to make it happen. If you can find the deals, get financing, and find the people to do the work, you are officially a commercial real estate investor. Below you will find 5 basic steps that involve commercial real estate investing. It may be simple- almost too simple. However, commercial real estate investors follow these basic guidelines often.

The first step in becoming a commercial real estate investor is to locate actual deals. This can be done through finding potential properties on the internet, the local newspaper, brokers and agents, and for sale by owner (FSBO) signs. There are so many places to locate properties. Be sure to set criteria for the properties that you are going to work with such as type of property, price as compared to actual value, size of lot or building, number of units, condition, etc. Keep in mind that the properties where you can create value that does not currently exist are the best properties with which to start. Once you become a seasoned investor, you can then purchase properties just for their income. Until then, you must perform the work to increase the value of a property.

The second step is to prescreen properties according to the guidelines you originally stated. It may take calling on several properties to find one that fits your specific criteria. Establish quick identifiers so you can quickly move through properties that do not fit your criteria, and uncover the ones in which you would be interested. The more properties you filter through, the more likely you are going to find the deals that will return the best results.

The third step to commercial real estate investing is, after you locate and prescreen a property that you feel is workable under your guidelines, you must create and submit an offer. There are many ways to purchase a property. Using seller financing, borrowing from banks, and using commercial lenders or private lenders are all viable options. The idea is to use other people’s money (OPM) to purchase the property you want. This can be done quite easily by understanding the lender’s criteria. Meeting seller’s wants and needs can be as simple as asking. Remember that the asking price is not always what a seller is expecting to get, so be sure to perform solid research before constructing and submitting an offer. It is a must to identify the current market value of a property that you are considering to buy.

The fourth step is to follow-up with solid due diligence. This entails getting every bit of information you can on a property including actual highest and best use, after developed or future value, any issues or concerns there might be with the soil or environment, or the city or municipality. This is your time to verify all the information you either have been told, or have assumed prior to submitting the offer. This is also your time to locate financing, if you find that the deal is as you had thought originally. This is perhaps the most crucial step, as it will save you from making a terrible investment that could cost you wasted time, effort and money.

The final step is following through with your exit strategy. Depending on what type of investment strategy you are currently using, such as buying properties in poor condition and fixing them up, or perhaps you are looking to purchase properties only to have them generate income, an exit strategy is necessary. You could quick turn a property after increasing the value, sell at retail, or even refinance. It is always a good idea to have multiple exit strategies in mind so that, if one does not work out, you have others to fall back on.

When commercial real estate investment is broken down into these five simple steps, investing is really put into perspective. Follow these five basic guidelines with every deal you find. Once you become more educated on the various types of commercial properties and how to best obtain financing, you are well on your way to becoming a true investor.

By: Yolanda Bishop

About the Author:
Tony Seruga, Yolanda Seruga and Yolanda Bishop of [http://www.maverickrei.com] specialize in commercial and investment real estate. As of May, 2006, they and their partners are managing over $600 million dollars worth of new projects.

Have you considered getting into real estate investing as a career? It’s a great opportunity for personal and financial reward. However, you should be certain to think critically when selling, especially when dealing in commercial properties. Going about investing the wrong way can cause you to lose money, not gain it. Here are a few tips to help those who are new to commercial property investment sell their properties and do well.

First, remember all of your resources. A Commercial Investment Multiple Listing Service (CIMLS) will get information about your properties out to more people than most forms of advertisement or listing can manage. Not only does CIMLS benefit you by increasing the exposure of your property, it’s also free. Just sign up for an account, and you’ll be able to put up an unrestricted listing. Get the most out of your marketing and advertising budget by taking advantage of free listings.

Likewise, local free real estate publications can be a great way to get the word out. You may have to pay for a listing in these publications, but some will allow you to add one at no cost. Many are looking for content, and will be willing to work with you. Since people pick these free publications up at many locations around the area, you’ll be getting exposure you wouldn’t have had before in exchange for a little time.

Remember to pay attention to the local legal structure, too. Paying capital gains taxes, making sure your property is up to code, and following local regulations requires knowledge of building codes, tax law, and city or local laws. If you’re not sure that you have the information you need on these legal issues, consider talking to an experienced broker. When you’re selling a major investment, the last thing you need is a hitch in the legal process.

It may seem simple, but many people just getting started in commercial real estate investing forget one of the basic sales methods. Put up a sign. This is a good way to stir local and passing interest in your property. Many people looking for a place to relocate their business won’t know your property is for sale unless they see a sign telling them so. In addition, a sign stating that the property is for sale will be seen at the same time as the property, and will be able to stir more interest. If you have a commercial property located by a major road, be sure to invest in a quality, readable sign that lets the public know you’d like to sell.

If you know that your current level of experience isn’t high enough to allow you to take advantage of all your options, or are worried about falling victim to a legal detail, you may wish to hire a broker. Of course, this isn’t the best case, but when you have a commercial property you’d like to sell, losing some of the profits to a good broker is a better choice than not being able to sell, not getting a fair price, or losing a chunk to taxes. Especially if this is your first large commercial sale, a broker could be a smart choice. Once you gain more experience, you’ll be able to handle sales without the involvement of a broker.

To defer payment of capital gains taxes on the sale of your property, consider using a tax deferred like-kind exchange. This is when you exchange your property with another commercial property owner, receiving a similar property in return. This will give you a deferment on paying your capital gains taxes, as the IRS, seems to be trying to encourage this kind of exchange as a vehicle for investment. Remember that there are some specific requirements for a like-kind exchange, and your properties must both meet these requirements for your tax to be deferred.

Commercial real estate investment offers many opportunities for the newcomer. Just be sure that you’re taking everything into account, and proceeding in a well-reasoned, critical manner when you sell your property. It could mean the difference between making a profit and being unsuccessful. Don’t be too proud to ask for advice or even hire a broker if you need to, and be sure to investigate all options before making a sale. In addition, remember that selling a commercial property requires you to let potential buyers know the property is available, through signs and local listings. By paying attention to all these factors, you’ll have a much greater chance of success in a real estate investment career.

By: Anthony Seruga

About the Author:
Anthony Seruga and Yolly Bishop of Maverick Real Estate Investments, Inc. work with builders, developers and other players in the commercial real estate industry to acquire and develop properties. They use progressive investment strategies that have proved extremely profitable. In addition to their own deals, they teach both seasoned and inexperienced investors how to be big players in the game. Visit the website for more info.