How to Invest in Commercial Real Estate Without Going Broke

Daniel Penzing
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The Unique Benefits of Commercial Real Estate Investing

Commercial real estate investing has similar benefits and pitfalls as residential real estate investing. It has similar ups and downs based on the make up of the market, style of the investor, locational advantages and pitfalls, and it can bring the same rewards as investing in the residential side of the market. But there is one key fundamental difference that sets the two markets apart: Commercial property has always been a more stable investment than the market for residential properties, and there is no substantial evidence that this will change or that it is in any danger of changing.

Too Expensive and Time Consuming for the Average Investor

Commercial real estate is commonly known to be one of the most expensive investment options available. Not only is the cost of purchasing commercial real estate usually a huge investment, but the time it will take in order to find, integrate, and manage a property investment is a real drag as well.

While the financial reward and return is the abundance of passive income, many people claim that the short life span of a commercial real estate project is not worth the financial and practical risks.

Considering the long list of troubles and complications that arise out of commercial real estate properties, it’s surprising to see how many individuals in the general public are willing to take these risks.

However, there is a brighter side to commercial property. In fact, there are many individuals who seem to have a knack for finding incredible commercial real estate deals that can provide returns above and beyond that of any other investment.

How is it possible that so many people can find these real estate deals?

It’s a legitimate question that deserves a quality answer. Although, the answer is not so technical, but it will surely help you better understand the process that many investors use.

Real Estate Crowdfunding Platforms

An Introduction

Real estate crowdfunding started to take off in 2009 in the United States. Real estate investors now have a wide variety of choices when it comes to crowdfunding platforms, which allow them to invest in good deals and grow their portfolios in a safe and easy way.

Millions of dollars are invested through real estate crowdfunding each year in the world. As a matter of fact, real estate is considered one of the most successful and most sustainable crowdfunding options. Common factors driving this success are the big number of investors taking part in real estate crowdfunding, as well as the ability of these investors to diversify their portfolios easily through crowdfunding platforms.

Over the past years, legislation has played a significant role in making real estate crowdfunding possible and attractive to investors. One of the most significant examples is Title II of JOBS Act, which allows real estate investing in the private market through crowdfunding platforms.

Another noteworthy piece of legislation is the Massachusetts Crowdfunding law, which was passed in 2014 and paved the way for Massachusetts to become the first state in the US where real estate investing through crowdfunding is possible.

In this post, we will introduce you to the main crowdfunding platforms that allow you to invest in real estate.

Real Estate Investment Trusts

(REITs)

Maybe you’ve heard the acronym ?REIT? before, but you weren’t sure what it meant. That’s probably because REIT stands for ?Real Estate Investment Trust,? but you still might not be that sure what that means. It’s understandable ? a lot of investment terms are difficult to understand. If you’ve ever heard a financial commentator talking about REITs, then it is understandable that you might not feel informed enough to make a sound decision about what to do with your money. REITs are actually a good investment when used correctly. They have the potential to give you great returns, but there is a lot of information that you need to learn before you can make a well informed choice.

What are REITs?

Conclusion

So that’s it, after all the information you read today, you have all you need to know to be able to make the right decision and start living the life you always dreamed of. You don’t need a lot to get started, start small and grow later. Commercial real estate can be rewarding but also it can be risky which is why proper planning is required.

If you have any more questions, please, don’t hesitate to reach out to me and I will help you as soon as possible.