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Commercial Real Estate Investing

ENDVEST Sep 24, 2015

Investing in commercial real estate can be a very lucrative investment option. Most people go the residential real estate investment route first because it is easier to understand and navigate and usually requires less capital or cash flow, but do not think you need experience in that area first. Commercial real estate is an entirely different ballgame. Commercial real estate investing can be much more profitable in fact, but there are certain things you must know and fully understand before jumping in to ensure you are successful, because even though real estate is a much more solid and stable investment option than say playing the stock market, there is still inherent risk as with any investment opportunity. And with the advent of such things as commercial real estate crowdfunding, you don’t even need all that much money or capital nowadays.


Some basic things you should do before getting started are to understand that commercial real estate is valued much differently than residential real estate, with commercial real estate property values being determined not just by what the fair market value of the property may be but by many other variables to include how much cash flow that property will be able to generate. Also, focusing on a particular market that you may already be familiar with or gathering knowledge on a specific sector will bring you better success than just throwing money at the first property that seems like a good deal. Do your homework when it comes to understanding such things as profit and loss, cap rates, net operating income, and loan-to-value ratios, which are not all that difficult but definitely pertinent to finding a good investment opportunity and avoiding a potentially catastrophic one. Be sure to fully understand the long-term impacts that may affect that particular investment property such as the local infrastructure in that surrounding area or city. For example, are businesses in that area doing well? Are new businesses coming in or are businesses moving out? Look at things like the tax base of that particular community and determine whether it is increasing, stable, or declining. And finally, do not place all your capital into one deal, be sure to keep some of your investments in other areas – diversify, because as with all investing, nothing is ever a 100 percent sure thing. But in essence, if you do your homework and invest smart, know that commercial real estate investing can be a great way to build strong long-term wealth in a passive and relatively hands-off manner.


If you find that you are very interested in commercial property investments, but are just not sure about how to raise the necessary capital or feel you need more information, visit Endvest.com—an online real estate investment and crowdfunding platform that can give you the knowledge and skills as well as fully vetted and sound investment opportunities you would never find on your own. Endvest.com has opportunities across the globe and can also provide the availability to get in on these deals with little initial capital.