Diversifying Your Investments Through Commercial Real Estate

Types of real estate investment companies

Money is one of those things in life that one can never have enough of. Sure, we all have basic needs that can be fulfilled on a budget, but nearly each of us can attest to a time when our basic needs weren’t enough to make us happy. While some think that they can simply make it big by playing the lottery, some instead focus on more achievable goals through hard work. An assessment by Fortune magazine found that a study of millionaires revealed that 97% of all their wealth was either created or held in properties. Around 3% of all Americans consider themselves real estate investors that plan on buying property within the next year; a lot of these individuals have been in the investment field for some time now — here is how they achieved success and determine where to grow from flipping houses.

The Success of Residential Real Estate Investors

When the real estate market began to experience trouble around 2006, many Americans saw a decrease in the value of their home. This lead to a startling number of foreclosures, repossessions, and abandoned homes on the market which was dubbed as the bursting of the house market bubble. Seeing an opportunity for themselves, investors decided to buy many of these properties up, invest money into renovating them, and reselling the house for a profit. Colloquially known as “house flipping” this investment strategy has picked up a lot of steam over the past few years as more investors buy and flip residential real estate. In fact, may economists attribute the re-valuing of the house market in some part to these house flippers who increased buyer confidence and price stabilization, turning residential house investment into a $100 billion business. As will be shown, it takes much more than money and time to turn a profit from house flipping however.

Making Smart Investments

In order to emerge onto the residential real estate market successfully, investors ought to familiarize themselves with short term loans. The typical 15 to 30 year loan offered by banks and mortgage lenders are inadequate for residential house flippers who are seeking a supply of capital to quickly renovate a house and sell it for a profit. These loans are typically for a year to five years and have higher interest rates — the benefit of these however is the fact that most buyers are protected from investments falling through, as around 50% of the loan is covered by the property’s equity. Once the home is acquired, investors ought to make sound renovation projects intended to increase a home’s curb appeal at market, overall value, and desirability in consideration of the target demographic. By partnering with a trusted realtor, many investors can see what home buyers are looking for given the location of the home — this means that money can be invested in safer places that are guaranteed to promise a higher return on investment. While flipping houses may be fine for some people, the true real estate investors instead choose to swim with the big fishes by learning about the different types of real estate investments available to them.

Why Partner With a Real Estate Investment Company

With more individuals then ever trying to stake their claim in residential real estate, many investors decide to move past residential sectors and instead into commercial sectors. One out of every three real estate investors make over $75,000 per year through their investments — folks like these decided to invest with a real estate investment company. By pooling money with other investors, those who partner with a real estate investment company are able to take part of large commercial real estate transactions — and thus profits. Hotels, offices, and other businesses constantly buy up properties owned by real estate investment firms; the investors thereby receive a piece of the profits while doing little to no work at all. With a combined total of over $9.2 billion in real estate renovations by investors, partnering with a real estate investment company is the best way to take your investment portfolio to more diverse and profitable heights.