Commercial Real Estate Investments with Steedtalker
Building personal wealth? You’d be remiss not to consider commercial real estate as part of your financial strategy.
Here at the Steedtalker, we deal with a range of commercial real estate investments.
But before we talk more about the types of investments we handle and the benefits of these financial strategies, let’s first define the term “commercial real estate.”
These are buildings that house businesses or storage facilities—basically, anything that’s not residential real estate.
That definition is pretty watertight, with the exception of apartments: while “commercial” denotes a property that is not used for human habitation, the business of leasing apartments is commerce. Thus as investment properties apartments can be considered a “commercial real estate investment.”
The best thing about these types of properties is that thanks to an investment known as real estate syndication, you don’t have to own one to make money off it.
How? Keep reading.
Real Estate Syndication
Let’s define our next key term: “real estate syndication.”
The easiest way to explain this is to connect it to something more familiar: a stock.
The value of a stock rises and falls with the performance of the company. They sell more widgets, your fractional ownership goes up; sales go in the other direction, and then so does the value of your ownership.
Real estate syndication is similar in almost all respects.
How does real estate investing do this?
The investments are placed in real estate. Real estate and investment properties that appear in syndications reliably increase and appreciate in value yearly. This is generally referred to as natural appreciation, which historically averages 4% per year over a ten-year period.
Let’s talk about another major difference: capital requirements. Stocks can be priced at any level, but to join a real estate syndication group, investors must typically have around $50,000 or more in disposible cash. This is a lot of extra cash, but if you’ve got the funds, there are not many other investment types that are as attractive as real estate investment.
Passive Real Estate Investments through Real Estate Syndication
In Real Estate syndication, the basic principle is that – instead of a single commercial enterprise, investors buy into a fund that may hold a number of commercial properties actively managed by Steedtalker or another lead investor known in industry-speak as a “General Partner.”
The investor in real estate syndication retains the title “Limited Partner” meaning the decisions—which properties to acquire, which to sell, negotiations over price or commercial space or vacant land, and business strategy—are all handled by general partners (or active investors). As far as passive income strategies go, this one is probably the most relaxed compared to almost any other real estate investment.
And the best part is you can choose the degree of involvement you prefer. From being a completely passive investor, you can choose to be an active investor or vice versa.
Key Benefits of Passive Investing in Real Estate Syndications
Compared to other investment vehicles, there are few that can match real estate syndications’ high returns.
Thus far, we’ve used the common stock as an analogy for understanding how real estate syndication works, but pointing out their returns can help investors understand how powerful commercial real estate investments are. The average stock delivers around 10% annually. Real estate syndications typically deliver around 14 to 17% annually.
Real estate syndications also carry these benefits:
- Limited partners (or passive investors) are offered the same tax benefits that come with the ownership of all classes of commercial real estate investing
- An expert-led investment strategy that maximizes returns and ensures that investors never lose money and that they accrue value in their passive investments. Passive investors receive the expertise while avoiding any tenant and management hassles.
- Rather than working with one real estate deal at a time, with real estate syndications, the investor is investing in many doors at once. In a way, real estate syndications are built to scale.
Let’s Get Started Building Your Personal Wealth Strategy
Interested, but not sure where to start?
With so many investment options, confusion as to where to invest leads to inaction. Schedule a FREE – NO OBLIGATION – NO STRINGS ATTACHED call with one of our expert real estate agents. Or email me with your questions and thoughts at allen@SteedTalker.com. As an experienced real estate investor, I’ll help you sort it all out, and you’ll soon be on your way to living more prosperously.
Types of Investments at Steedtalker
The typical real estate syndication will hold a number of different properties. Here are a few of the commercial property types that are common to this kind of investment.
Multi-family properties
This is a category that includes residential real estate properties like duplexes that house as few as two families to 500-unit apartment complexes.
Again, as we explained above, “commercial property” includes these types of properties because they ultimately exist as part of a commercial agreement.
Sometimes, these residential properties will work through a property manager, and sometimes they will include single rental properties which yield rental income. Whether they’re apartment buildings, or short term or long term rental properties, what they all share in common is that they’re each a key part of any real estate investing strategy.
Office & Retail
Buildings that house corporate staff or retail operations are, intuitively, part of this category.
Office buildings are identified as belonging to either Class A, Class B or Class C depending on the building’s structural integrity and worthiness.
Commercial properties that exist for retail purposes are classed in a variety of designations, including strip malls, as well as “power centers” which is a term used to label large buildings that can be subdivided into multiple big box stores.
Indubitably, a real estate syndication will include retail space and office assets as investment opportunities in its property portfolio and long term strategy.
Mobile Home Parks
The stereotype is that mobile homes are undesirable and that they’re dying out.
But in fact, the popularity of mobile home parks (MHPs) has risen in recent years.
Since then, they’ve gained a reputation as an undervalued asset class for real estate investors looking to diversify their holdings in real estate investing.
Self-Storage
For real estate investors wishing to diversify their portfolio into several asset classes, self-storage facilities are a rewarding investment. Over the last twenty-five years, the self-storage market has risen at an exponential rate as demand for the flexibility provided by this product has surged.
Let’s Get Started
Ready to start investing and building your personal wealth through real estate investment trusts? Or maybe you just want to hear more about how a real estate investment opportunity can change your life?
Let’s get acquainted. Steedtalker is always open to having a no-pressure, free call. To find out more, get started here.