4 Successful Core Commercial Investment Strategies – Looking to up your game when it comes to commercial investment strategies? Whether you’re just getting started in the commercial real estate investment world or you’re a veteran and are always looking for better strategies, these four core components can boost your rate of return, future potential, and expand your knowledge on commercial investments.
4 Successful Core Commercial Investment Strategies
This may also be termed “distressed” because it talks about developers looking for distressed buildings, apartments, condominiums, homes, and retail and office outlets. This is probably the most risky but it also has the highest rate of return. This could be a foreclosed asset or one that has been declining for some time such as a retail strip mall that is lost tenants or if the area has been downgraded in the last few years. If you’re looking to finance this type of property, it can be a little bit trickier. Some lenders may not even allow any debt on a property in their current state while others may allow for an urban revitalization tax abatement program if applicable for that neighborhood. This allows for certain financing on properties that will improve the overall health of the neighborhood. It’s important to talk to professional real estate agents that understand the situation and qualifying property lenders.
#2. Adding value.
Similar to an opportunistic approach, this is where you guarantee to add value to a property. You’re pretty much taking it from uninhabitable to profitable, which could take creative financing and the right program. This is also where investors need to dig deep to get the best discount.
#3. Core assets.
This approach works best when market downturns slightly because they can give you consistent returns. They offer good equity appreciation and are designed to be a buy and hold onto strategy. This is not really the best way to utilize or leverage the property down the line but if you’re planning on renting it out, making a profit, and then turning around and selling with the market is high, it could be a great strategy.
#4. Core plus.
This is more designed for an out of the downtown area investment. This could mean an urban revitalization, historic district, or up-and-coming neighborhood. You might be able to attract high-quality tenants but depending on how the neighborhood plays out, they may or may not stay based on potential income. This may offer you about 65% of the asset value.
Snohomish County has several different options for real estate investment strategies. The best way to determine what works for you and your budget is to give me a call and let’s discuss some numbers and go over potential situations that can earn you a great return on your investment both immediately and in the future.