If you have been skirting around the idea of investing in commercial real estate, you may be wondering how you can know when it's the right time to invest in these properties. The right time for you will be synchronistic; your borrowing and repayment capacity will meet market opportunities to buy low in an area that offers high potential growth. There is certainly some luck involved in this, however, for the most part good preparation meets opportunity to result in long term profitability.

Investing in commercial real estate can be very profitable if you carefully evaluate the market and are cognizant of both the risks and the benefits. Commercial real estate can offer the canny investor the benefits of cash flow, depreciation, appreciation and capital growth. It can provide tax benefits, help you diversify your portfolio and increase your personal wealth.

Profiting from commercial real estate is basically a matter of buying low and selling high. Properties that are under-priced or under-performing in areas with a solid and sustained rate of growth are considered to offer the best profit potential. All these factors are essential aspects to successful commercial real estate investing. However, taking the time to gain needed expertise and experience cannot be underestimated.

Before committing to purchase a commercial real estate property, it is important to understand what you want to achieve from the investment. For example, are you planning to hold onto the property for a long term to benefit from capital gain and are therefore less concerned with annual rental returns, or do you need the cash flow generated by higher returns? In fact, to be successful at investing in commercial real estate you need to acquire the right mindset before you even begin to look at properties. You can rarely make money quickly in commercial real estate, rather the most successful investors are willing to hold onto their properties for the long term. The very nature of commercial real estate investment requires you to take an unemotional approach involving thoughtful analysis, research and extensive due diligence. You need to become a long range thinker, planner and implementer.

It is always a good idea to get expert advice, but remember real estate agents and property management companies are selling their services and will not necessarily tell you the whole truth. Caveat Emptor (Buyer Beware) holds very true for commercial real estate investing. You need to do your research in order to avoid serious pitfalls.

Before purchasing a commercial property, check into the demographic information relating to the area within an easy distance (for example, a five mile radius). Knowing the average age, average household composition, average household income, and ethnicities can be very revealing. If the commercial property you are considering is retail, you will also need to consider the quantity of passing traffic and ease of parking.

An obvious consideration when evaluating commercial real estate as an investment is the vacancy rate as well as the absorption rate over the previous few years. You also need to consider the length of current leases still to run. This is important for two reasons. First, the current rents may be lower than the market value. Alternatively, they may be providing a good return and the longer the lease the better the value of the property because you will not have to fill vacancies.

The aim when purchasing commercial real estate is to get the best return on investment at the lowest possible risk. For example, there is far less risk in purchasing an office building with ten well paying tenants in it who still have a substantial period of their lease to run than it would be to buy one with leases about to expire or only one or two tenants.

Commercial properties are commonly much more expensive than other forms of real estate and significantly more complicated in terms of market considerations. You will need to sort through a lot of information designed to put the property in the best possible light so you will need to have excellent analytical skills to sort through relevant data from the false impressions. Commercial investment needs to be taken slowly. Take whatever time you need to evaluate the suitability of a property for your investment purposes.

Commercial real estate is red hot. Hotel lending trending upwards. Patrick Hatten %26 Andre Bailey of Matrix Capital Bank have launched a website to traffic nation-wide borrowers specifically looking for hotel loans. This site can be found at www.hotelsloans.com. The site displays their wide selection of SBA and conventional commercial lending products for hotels. Phoenix, AZ August 28, 2005 - Commercial real estate is red hot, and the trend for hotel lending is headed upwards. Patrick Hatten %26 Andre Bailey of Matrix Capital Bank has launched a website to traffic nation-wide borrowers specifically looking for hotel loans. This site can be found at www.hotelsloans.com. The site displays their wide selection of SBA and conventional commercial lending products for hotels.

Have you gone to a shopping complex? There, you will see different novelty shops, grocery stores, and other small businesses. If you will decide on whether you want to enter such business, it is important that you will understand the basics of commercial real estate investment and how you can gain profit from real estated investing.

Understanding Commercial Real Estate.

Real Estate is defined as a certain property that can possibly generate revenue for its owner. It generally includes office buildings, shopping malls, service stations, restaurants, apartment units, and raw land.

You must understand that only properties, which have a potential to produce income for its owner, is categorized as commercial real estate.

Therefore, it will not include real estate of habitable characteristics such as houses and apartment buildings.

So how is it leased to the potential clients? Usually, the owner of the property leases it through a licensed broker. Then the broker will make the necessary arrangements with regards in advertising that property.

In addition, the broker can make some agreement with the owner or seller of the property about its improvements such as renovating or clearing the perimeter of the ground where it is erected.

How to Get Started in Commercial Real Estate Business

If you want to start with this type of investment and yet, you do not have a concrete property to sell, maybe the first thing to do is to have some guidelines that you can start with. Here are the things that you should consider in building your commercial property:

* Determine what are the hot business are around. Decide if you will cater to the needs of individual or partnership that wants to rent spaces for their food or novelty shops.

* Choose the best location of your property. Go for the finest piece of land that you can utilize efficiently. You can consider erecting commercial property nearby high traffic areas can be easily accessed for full-service restaurants, hotels, and other shopping centers.

* In aid of choosing your property's location, you consult the planners of the local government where it will be built. They have a zoning system, which separates industrial, residential, and commercial properties. It will help you to obtain the necessary clearance and permits from them.

* You can opt to hire some financial advisors. They can help you to plan for the revenue aspects of your investment. Always keep in mind that the right investment is the best chance to earn more profits.

* In case that the property is funded under a mortgage, it will be wise on your part to repay it religiously. Do not let it be your liability; remember that your goal is to earn money, not to lose money.

* If the property is now ready for leased, always have the necessary arrangements with your real estate agents with regards in advertising your property.

* Check the rates, terms and conditions, and other related aspects concerning the lease of your commercial property. You must also serve the interest of your potential clients that will avail it.

Earning money through commercial real estate property requires enough planning. This is an investment; either you lose or gain money.

WEIGH YOUR RISKS CAREFULLY

When you decide to embark on a commercial real estate investment program, how do you get your start? We know that there is no such thing as 100%25 financing for commercial property, so where do you get your initial capital for that first purchase? One method which I have discussed before is to use Other People's Money as your initial "stake." Perhaps having partners is not the path you wish to follow in your investment program. That makes the other option using your own funds. Before you dip into your resources, however, consider some of the risks you face.

First, you are embarking on an investment program about which you have little practical experience. You may have read every book on commercial real estate investing ever printed and gone to every seminar ever produced in a hotel for a year, but you have no experience in the business. Do you really know what can go wrong? Do you realize what additional reserves you might need in case things don't go as planned?

Second, consider the source of your equity. For most people who have done some real estate investing, they have probably focused on residential investment properties. Residential properties usually enjoy a large number of comparables to easily estimate value, financing programs for residential properties allow potential buyers to facilitate sales with little equity investment, and residential properties are usually less expensive, and therefore more accessible, to most people. If you are such an investor, then you probably have a pretty good pool of equity to tap. But how do you access it? Sell them outright and pay your capital gains? Sell them in a 1031 Exchange? Refinance them? Each option has its advantages and disadvantages.

Third, if you are like most people, your biggest chunk of equity is sitting in your home. There may be a great temptation to go get yourself an equity line, suck out the equity, and go buy a commercial property somewhere. Before you do, make sure to consider how the increased debt service of the equity line will affect your finances. Can you truly afford the payments if something doesn't work out with your commercial investment? Yes, your commercial property will be producing income. However, the majority of that income will be used to pay its operating expenses and paying off the loan you arranged to acquire it. That doesn't leave a lot left over for you in the initial years of the investment to pay down the equity line, which will most likely have a rate somewhere above the Prime rate (8.25%25 today).

The point is to consider your investment goals, your tolerance for risk, and your ability to live without the funds you are using for your commercial investment. Over time, your commercial portfolio should provide you with significant current income, a hedge against inflation, and net appreciation. You need to pay careful attention to how you structure your commercial real estate financing to minimize unforeseen risks and increase your chances of success. In your quest to achieve your commercial investment goals you need to carefully asses the impact of the financing decisions you make.

India, because of its advanced approach towards development is proving out to be one of the most sought after destinations for real estate investments, property investment India. An overall growth of 200%25 has been observed in last decade in terms of rate and demand of commercial properties in India. It is true that not in all cities and states we see the same hype but then in around 30%25 of cities in India the commercial properties are in a boom these days.

Developed cities like Mumbai, Delhi, Bangalore offers a lot of facilities and still a lot to explore that eventually attracts the investors towards properties in these cities. The best part about these cities is that you get a full fledged infrastructure with minimum to invest your time into. These cities provide the best of the commercial sites with a number of opportunities to grab in terms of better business selection. Though the commercial sites in these cities are the expensive of all but the way one can gain maximum out of his/her money are innumerable in these cities.

Talking about developing cities like Ahmedabad, Jaipur, Calicut and Chennai, one can expect a better deal in terms of pricing with a number of options to choose from. These cities are not very well equipped with the modern infrastructure but less pricing and better comfort compromises everything. In these cities there are a number of options available in terms of site selection, location and arrangement of infrastructure which again is quite attractive to those who believe in doing an "extra" effort in order to get excellent results.

Apart from that there are a number of cities like Bhopal, Baroda, shimla etc which are not very famous for their industrial prospective and hence their commercial property price is comparatively lowest. If you believe in investment with options and a lot to explore you can opt for these cities.

Though proper information about geography wise property rate is not very easily available however one can easily refer to different real estate communities offering information about the commercial properties in India. There have been some of the open forums which are dealing with providing the know how about the commercial properties in India. It would really be advisable to go through a number of real estate portals and communities before finalizing a deal.

Cornerstone Commercial Mortgage Arranges $26,000,000 in Land Development Financing for 150 residential lots at Lake Las Vegas, Las Vegas, Nevada Lake Las Vegas. Las Vegas, NV September 30, 2005. Cornerstone Commercial Mortgage arranged a land development loan for CW Capital Fund One, LLC to purchase 150 unimproved residential lots. The loan allowed the buyer to acquire and improve the lots for resale. This transaction was part of a 543 lot acquisition involving four lenders, one borrower and one National Home Builder who optioned to purchase the lots once they were finished. The Home Builder entered into a contract to complete all the site improvements and optioned to takedown all the finished lots over the next three years. Cornerstone Commercial Mortgage acts as mortgage consultants specializing in arranging commercial real estate financing for clients throughout Nevada and California. Cornerstone Commercial Mortgage manages every detail of the loan process from start to finish and assists clients in all aspect of financing from consulting on the feasibility of a real estate development project to obtaining the right construction or permanent loan. Cornerstone Commercial Mortgage%26#8217;s Mission is to provide our clients the best loan at the most competitive terms in the shortest time possible while keeping their best interest in mind. For more information on this transaction contact John Lloyd at 702-385-2658, 5765 S. Rainbow Blvd., Suite 102, Las Vegas, NV 89118 or see our web site at www.cmlv.net.

The prestigious Real Estate Executive Magazine features the story of Carl and Karen Moose and their company Investment Realty Services in the November, 2007 edition.  

"Carl and Karen Moose are two very busy and successful commercial real estate professionals with an active young family — "three under three," as they say — and an impressive list of colleagues, clients and investors who have nothing but praise for the deals they put together. Investment Realty Services, Inc., expertly manages their investors’ real estate assets by providing brokerage, investment services and property management services. IRSI acts primarily as buyers’ agents for investors and represents those who are looking for a long-term strategic partner to support their interests. Their clients also include passive financial investors such as doctors, lawyers and business owners.

Karen is president of Investment Realty Services, and Carl works as managing director, officially speaking. As they explain, this means that Carl focuses his efforts on finding great commercial properties, analyzing them and putting deals together for his company and investors, while Karen puts her energy into managing the properties they own, raising capital, and forging and maintaining strong relationships with colleagues, clients and investors…"   Here's a link to the complete article: Investment Realty Services: Diverse Beginnings

A commercial real estate broker provides a service between buyers, sellers, and rental agreements of real estate. Brokers are responsible for managing a team of real estate agents, to assist people in buying, selling, leasing, or renting commercial properties.

Properties handled by commercial brokerages often include office buildings, hotels, apartments, retail, hospitality, shopping centers, and industrial properties. For clients who are building on raw land, brokers can help assist the client in managing the construction process, including inspections, identifying zoning restrictions and building codes, and guidance to ensure that necessary steps are taken to make sure that the building is completed on time, and within budget.

When working for a seller or landlord of a commercial property, the broker has a signed agreement with the client and sets out to achieve the best possible price with the best terms for their client. While a broker is working for the seller or landlord they may also assist buyers in finding a commercial property to suit their needs, and budget. But in these cases there is never a pre-written agreement, on the buyer's behalf.

In most states, to become a real estate broker, a license is required. This allows the broker to receive money in return for services rendered. It is illegal for a broker to conduct business without a license, unless they are a practicing attorney who is not required to sit for a broker's license in order to receive a commission.

It is important that those interested in becoming a broker make sure that they look into their respective states guidelines on becoming a commercial real estate broker, as requirements, and regulations can differ significantly between states.

In many states, licenses are issued for a certain time frame. After that, the broker is required to complete further education to renew their licenses. These further education requirements are especially important to make sure the broker is kept up to date with real estate law updates, and changes in the industry.

How To Become A Real Estate Broker
Brokers usually start out as real estate agents. This is where they gain their industry experience, and then decide to become a licensed commercial real estate broker. In order to get a broker's license, the real-estate agent must pass a brokers state exam, as well as complete some course work, or training. Usually, after receiving accreditation, the broker will either continue to work for another broker, as an associate broker, or start a business of their own where they will manage a team of real estate agents.

Brokers, who have their own brokerage business with real estate agents to manage, must have a very good working knowledge of legal procedures, and requirements. It is their job to educate, and advise both their real estate agents, as well as clients who come to them for advice on commercial selling, rental, or building.

What Services A Commercial Broker Provides
A broker will offer services such as an estimated value of a property, marketing of that property, and assistance to a buyer, or seller with the purchase, lease or sale of a property. Brokers may be called upon to provide for sale by owner (FSBO) document preparation, and paperwork, but in commercial properties this is much less of an occurrence than with privately owned residential properties.

A broker will also offer guides to property owners on how to sell, or rent their property, and assist with property management process. A broker will often fill out the paper work needed to sell or rent a property, although they are not given the authority to sign papers on behalf of their clients.

Commissions
Commercial Brokers receive a commission from the sale of a property. This is usually an agreed percentage of the sale price or part of the monthly rental income from the landlord. Brokers in the commercial industry must be very competitive, and have a good knowledge of their local area to make a sound income. But with these skills, there are definite monetary rewards offered to brokers. According to statistics the majority of commercial real estate brokers are on an annual income above $42,000 per annum, while some are earning a six figure income.

If you are just starting out as a real estate agent, it can be difficult to get started selling commercial real estate. However, commercial real estate is the big money maker in the real estate business. Since commercial real estate has become quite popular since it is such a money maker, it can be difficult and expensive to get started in this type of real estate. There are, however, a variety of ways that you can get started and start getting more commercial real estate deals if you are willing to do a little work.

Online Free Ads
One great way that you can get started in selling commercial real estate as an agent is to use inexpensive methods of advertisement. One great way to get the word out there about the property you are trying to sell is to use free online ads. There are a variety of different websites that are available for you to post classified ads on that list a property, or even multiple properties for sale, and the great thing is, you will not have to pay a penny. Not only is this a cheap way of exposure, but it is also a quick way to get your property noticed. Many times, your ad will be seen quicker when you put it on the web and by many more people. Local newspapers take more time and money to get you the exposure and only reach a local group of people, while advertising with free online ads can get your world wide exposure and help you sell the commercial property.

Free Real Estate Publications
Another way that newer real estate agents can get their commercial properties noticed is to advertise them in free local real estate publications. Whether it is a publication specifically for real estate or a publication that only includes real estate, this is a great way to advertise your property for free. This is an excellent way to gain local exposure, not only for the commercial property you are trying to sell, but also for you as an agent. Make sure that you continue to run ads for your property in these types of publications. Even though at first you may not see results, remember that many times it takes awhile for commercial real estate to sell, but perseverance can lead to a large pay off when you finally sell the property.

Quality Signs
If you are trying to sell a commercial property, especially one that is near a well traveled road, you may want to invest in a quality sign to advertise the commercial property. A small unprofessional sign may not attract any attention at all, but a larger sign that is well crafted and attractive can get the attention of many people who are driving by. You never know who may drive by the property and see your sign. While it will take a bit of money to get a great sign, it will be worth the money that you spend to get your property noticed. One never knows when a local business will need a new site, or someone with money to invest will be looking for an opportunity, and your sign will make sure that they will see your property when they drive by, which may lead to a sale.

Establish Business Connections
As a new real estate agent, one of the best things that you can do is to start establishing business connections with a variety of different people. Speak with other real estate agents that are successful in selling commercial real estate and learn from their mistakes and their successes. Also try to get involved with local business people and know the market that you are trying to sell in. Often, if you can get the word out that you have a great piece of commercial property, it may spread to the right business people that will want to check it out. A great deal of being successful in the commercial real estate market has to do with the connections that you have, so work on making various business connections.

Find Your Own Leads
Even if you are working in a broker's office, you should not expect the leads to be coming your way within the office. More than likely any leads within the office will be given to someone with more experience in commercial real estate until you have proven yourself to excel in this field. You will have to take the initiative to get the job done, and it is possible with a great deal of hard work. Check out the Chamber of Commerce in your area and find out who the business people are. You may also want to attend local zoning meetings where you will meet prospective investors who are looking for great properties. Even hitting up your local golf courses can help you make friends with local business people who may be prospective clients.

While it may be difficult to get started as an agent in commercial real estate, it is definitely possible if you are willing to work hard. Using the internet to advertise as well as free local publications can get the word out quickly and inexpensively so you will save money and get a broader base of exposure for what you are selling. Signs will also provide great exposure and show that you are serious about the commercial real estate business. Also important is making the right contacts and finding your own leads so you can excel in this business and prove to be a great commercial real estate agent. There is a great deal of money to be made in the commercial real estate industry, and hard work, dedication, and patience on your part can help you become successful.

Tony Seruga, Yolanda Seruga and Yolanda Bishop of http://www.maverickrei.com specialize in commercial and investment real estate. As of May, 2006, they and their partners are managing over $600 million dollars worth of new projects.

Every day I am approached by people in residential real estate, by people in different professions such as medicine and law, and others who are not too informed on commercial real estate and what it is really about. When they discover my profession, they always ask me, "Why?" Of course they acknowledge the most obvious reason, the amount of money that can be made. However, I am quick to inform them that there are so many other wonderful reasons why ANYONE should be involved in commercial real estate.

Here I have compiled the top five reasons why I am involved in commercial real estate, and why you should too.
The first is really my favorite, the concept of synergy. Synergy is the idea that you put in the same amount of effort, but yield a larger result. 1 %2B 1 = 3. This is definitely present in commercial real estate. Many of the deals you might be involved in require the same exact process and amount of work, regardless of how large the property is, how much the property is worth, what its best use is, and how much of a return you can make from it.

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