The story goes that an ambitious young man was praying to God daily for months; intensely imploring the higher power to help him win the lottery. After many months of praying, the man received a message from the Lord, “Sir, if you want to win the lottery, you have to buy a ticket.” Investors serious about building wealth and developing a comprehensive strategy to maximize the appreciation and income potential of their Investment Portfolio will be well served to investigate the opportunities available in today’s commercial real estate market. There exists an almost unprecedented opportunity to position your portfolio for exponential capital growth.
Consider the fact that today you can purchase stabilized investments with cap rate returns starting from 7% (and up in most investment categories) and capitalize on the 5.5%-6.75% lending options to finance the investments.
Today’s lending environment offers a comfortable spread for both new purchasing and creating prudent leverage. Multi-Family investments may offer an even better return with interest rates for Apartments/Multi-Family quoted as low as 4.5%.
Remember that the options available in purchasing income property run the gambit from Multi-Family Residential Investments to Industrial Facilities to Shopping Centers, Mini-Storage or Mobile Home Parks. Whether your comfort level is centered on Multi-Family apartments, NNN Leased Opportunities, or more aggressive Value-Added Investments; both the inventory levels and income accelerating opportunities are substantial.
There are other important advantages to consider when investing in Commercial Real Estate; leverage and positioning yourself to take advantage of the “wealth building” capability of the 1031 Exchange Option (eliminate the tax bite of Capital Gains to keep all your hard-earned equity intact). In addition, you receive of the tax benefits of both depreciation and interest tax write-off.
1% to 4% annual returns available in the stock and bond market pale when compared to the multi-dimensional estate building capability of real estate: income, appreciation, leverage, and generous tax advantages.
As one savvy investor once said, “One good investment is worth a lifetime of toil.”