Tectone Real Estate

Investing in commercial real estate is riskier and more costly than investing in residential property – but ultimately it can be far more profitable. Whereas the stocks of major housing manufacturers have decreased over the last few months, retail and institutional investors have been investing heavily in commercial real estate, through both operating companies and investment trusts.

The profits from commercial real estate are linked to a large degree to the state of the overall economy – today, commercial property is a $4 trillion market, having increased in volume around 20% over the last five years. Most smaller investors are able to profit from commercial real estate.

The potential profits to be made from investing in commercial real estates are affected by several factors. Apart from the overall economy, the local economy and market can have a huge impact, as can the terms and length of any lease, the reliability of tenants and the overheads involved with your property.

Generally speaking, when investing in commercial real estate, to make a profit you should ideally have a long term lease from a major tenant. Finding the right tenant isn’t always easy – most commercial real estate has relatively few potential tenants unlike residential property.

During a recession, commercial foreclosures and vacancies tend to increase significantly more than residential properties. And if commercial properties remain vacant for a long period of time, owners may lose a lot of income and be forced to resell for less than the property is worth.

One method of generating a profit from commercial real estate is to look at REITs (Real Estate Investment Trusts). These are traded securities which allow an investor to take part in large scale commercial projects. REITs were created in 1960 by Congress and can be a practical alternative to bonds.

Most REITs specialize in certain types of property such as office buildings, hospitals or shopping centers. There are several benefits of REITs: they trade in the same way as stocks, so you can buy and sell them. The share price can increase in value as the property appreciates in value and shareholders also get income from rents.

Not surprisingly, REITS have become extremely popular over the last few years. Another big advantage of them is the tax benefits – by law, REITs must distribute 90% of their income as dividends.

There are several ways to invest in commercial real estate without actually having any capital. Subordination is the term for the situation in which the current owner actually takes out a second mortgage on the property to cover the difference of the amount that the purchaser has available in the form of a loan.

Another method is to persuade the owner of the property to release some acreage. That section of land can then be used to borrow money to cover a down payment on the rest of the property. Many property owners don’t even know this option exists and it can be an effective strategy when dealing with raw land.

Another method is to purchase commercial property by means of a partnership. If you are able and willing to do the work, you may be able to find a partnership that is willing to finance your deal – in exchange for a percentage of the profits, of course.

Investing in commercial real estate isn’t for everyone. But the profits can certainly be made for those who are prepared to take a calculated risk, have the expertise – and perhaps a little bit of luck.

Tags: Commercial Projects, Commercial Real Estate, Real Estate Investment, Reits, Term Lease

Real estate sales is a tough road when you look like and sound like every other agent. First off there are too many agents in every market, so if you can’t find a way for people to recognize you as the agent they want to work with your swimming up stream with little hope of survival. Like so many agents each year you’ll wear out or starve out and leave the industry.

You don’t want to be unique by being strange or dishonest about your background. One way to find your uniqueness is to think about what you’re passionate about and involved with now. This approach helps you to both enjoy greater real estate sales and whatever you’re passionate about at the same time.

How can being passionate about something unrelated to real estate help you to increase your real estate sales? Let’s say you really love horses. You like to ride horses, you go to horse related events, and you know or have the opportunity to meet other people who are also passionate about horses. This insider knowledge with that particular group and the mere association you have with your fellow horse lovers gives you an opportunity superior to other agents. Who do you understand better than the competition?

The reward in terms of real estate  comes from being able to position yourself with the group. Based on your understanding of the group that you share a passion with, how can you position yourself to better serve them? In the horse example you might say that you help horse lovers to find properties that provide a good home for both the horses and their owners.

Your uniqueness puts you one up over the competition. Because the other members of the group already know you, you share a common passion, and they know you clearly understand them and their needs better than an outsider these people will look to you first. When you work with people from the group that you share a passionate with they will tell the other members in the group what a great job you did, as long as that’s true, helping them to find the perfect property. So you have testimonials and referrals happening within the group, and pretty soon you’re known as the go to real estate agent for horse lovers. Building on the groups that you’re already passionate about will help you to almost effortlessly grow your real estate sales while having a lot of fun along the way.

Tags: Increase Sales Today, Insurance Sales Success, Insurance Sales Training, Investment Sales Success, Real Estate Sales Success, Sales and Marketing Plan, Sales Training Program

Baby boomers, baby boomers, baby boomers; we all hear this term over and over again. So who are the baby boomers? Baby boomers are people in the United States who were born between 1946 and 1964. Approximately 78.2 million people fall into this category.

As a group, baby boomers comprise the largest population cohort in the history of the United States. The size of the group gives it vast influence over American politics, popular cultural, and of course, real estate. To evaluate the influence of the baby boomers on the future of real estate, the National Association of Realtors (NAR) conducted a study in 2006. The findings of the research were published in report entitled Baby Boomers and Real Estate: Today and Tomorrow. Below are some highlights from the NAR study.

AGE DISTRBUTION

According to the NAR report, baby boomers now range in age from 42 to 60 years old. The typical baby boomer is 50 years old, and the oldest of the baby boomers turned 60 in 2006. About 46% of baby boomers are in their 40s, and about 25% are at least 55 years old.

HOUSEHOLD INCOME

As a group, baby boomers are in their peak earning years. In 2005, baby boomers had a household income of $64,700, and about 25% them had a household income of at least $100,000 per year.

HOME OWNERSHIP

About 78% of baby boomers own a home, which is higher than the national ownership rate of 69%. About 96% of baby boomers believe that home ownership is a good financial investment.

FUTURE REAL ESTATE PURCHASES

About 10%, or 7.8 million of all baby boomers, said they were likely to purchase additional real estate in the next 12 months. Of these potential buyers, two-thirds were planning on buying a primary residence, 26% want to buy land, 19% want rental property, 15% want a vacation home or seasonal home, and 14% want a commercial property.

WHAT FEATURES ATTRACT BOOMERS

When baby boomers were asked about what features are most important to them, 38% wanted a lower cost of living, 38% wanted to be near family, 38% wanted easy access to quality health care, 37% wanted a better climate, and 36% wanted to be near a body of water.

PREFERRED COMMUNITY AMENITIES

When baby boomers were asked about the type of community amenities that interest them most, about 18% wanted to be near cultural offerings, 9% wanted to be closer to their family, 4% wanted to be on a golf course, and 3% wanted easy access to educational facilities.

WHERE DO BOOMERS WANT TO RETIRE

When baby boomers were asked about where they want to retire, 33% of them want to retire in a rural area, 30% in a small town, 25% in a suburban area, and only 12% in an urban community.

BOOMERS AND THEIR REAL ESTATE AGENTS

Baby boomers consistently use the services of a real estate agent. Approximately 60% of homebuyers and 79% of home sellers used a real estate agent in their last transaction.

SUMMARY

The baby boomers have had and will continue to have a significant impact on the real estate market. As the boomers near retirement, they continue to value real estate and will continue to invest in properties and land. Real estate agents would be well served to understand what baby boomers want in terms of their real estate investments, and design strategies that target the needs of this enormous population cohort. For more information, read the NAR report entitled, Baby Boomers and Real Estate: Today and Tomorrow

Tags: Association Of Realtors, Population Cohort, Today And Tomorrow, Vacation Home