REAL ESTATE
WHY SHOULD I INVEST IN
COMMERCIAL REAL ESTATE? By Hooman Hamzehloui
Trump to see the value in this acquisition.
professional. Before you choose your broker,
Our client started with a fresh coat of
ask them to show you their recent resume
paint and the center started to come to life.
of investment sales. Ask them to show you
Prospective tenants began to fill the vacancies
the letters of recommendations from their
and the net operating incoming slowly
past clients. Don’t just take their word for
started to climb. The Mcdonalds ground
it, look up the transactions online and verify
lease will soon be closing for over $1,500,000
if the numbers that they’re bragging about
dollars and our client is will be playing on
match up to the numbers recorded in the
the house’s money. Within a year, they will
public record. The numbers don’t lie, but
they had to do was pick the fruit off the floor.
have received all their money back, and they
swampland sales people do.
Commercial real estate investors don’t make
over $200,000 dollars a year until they decide
The economic crash of 2008 sent commercial real estate prices into a free fall. According to the Massachusetts Institute of Technology Center for Real Estate, property values plummeted by 10.6% in the fourth quarter of 2008. As we all know, it only got worse from there. This created a spectacular buying opportunity for savvy investors. They didn’t have to reach for low hanging fruit. All
emotional buying decisions. Investors are primarily focused on getting the highest return on their investment while minimizing their risks. Usually the deals with the highest risk offer the highest rewards. A perfect example of this is a shopping center we sold to a client in January for $1,525,000. The property consisted of 149,000 square feet, sitting on 15 acres of land at a very busy intersection. Now this center was only 50% occupied and it needed some renovations, but it was still bringing in a net operating income of $166,000 a year. The main tenants of this center were Cash America Pawn and Mcdonalds. One doesn’t need to be Donald
will have a shopping center that will bring in to sell. As their occupancy reaches closer to 100%, that net operating income will only continue to rise. With annual escalators in the leases, that number will eventually reach north of $350,000 to $400,000 a year. Can you say “Show me the money?” This was such an incredible deal because it required a little work and some strategic planning. There are plenty of
buying
opportunities out there that will produce similar results. Keep in mind that in the game of high risk, high rewards real estate investing, it is imperative that you use the help of a seasoned commercial real estate
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Hooman Hamzehloui 407-985-4621 Hooman@MastersRealty.com