Many real estate investors are turning to commercial property for investment opportunities instead of single family homes and condos.

There are two categories of commercial investment property:

Category #1: Residential commercial property or apartment buildings.

Category #2: Business commercial property which includes office buildings, retail shopping centers or strip malls, warehouses, office condos and other business property.

Investing in commercial real estate has two powerful advantages over single family homes and condos

Risk Reduction
The first and foremost advantage is financial risk reduction. For example, if you invest in a duplex, you reduce your risk by half vs. a single family home. If you invest in a four-plex, you reduce your risk even more and so on. This is because the more units you have under one roof the easier it is to absorb tenant turnover.

It’s rare to have all the apartment units empty at the same time, unless something out of the ordinary has happened. Multifamily properties with one or two vacancies, generally, is not going to affect the investment’s value and you are not likely to need to place any of your income into this property, as there will always be enough tenant-generated income. The same situation is true for commercial business property like an office building or multi-unit industrial property.

Commercial property investing is considered a wise investment because as long as there are tenants, there should be enough income to pay the loan, property taxes, property management and a repairs reserve and still have monthly cash flow. Don’t buy the property otherwise.

Built-in Appreciation
Another advantage of investing in commercial real estate is forced appreciation. This is a very powerful concept. There are two key ways to gain forced appreciation.

One way is to buy a fixer-upper apartment building below market value. Look for apartment buildings with some fixable structural or cosmetic problems and fix them. These properties may be ones that other real estate investors are passing up rather than fix the existing problems. If it just needs simple updates to make it more profitable, it may be an excellent purchase.

Any commercial real estate property once repaired, modernized or even just painted, will instantly be worth more. There is an initial cost with any improvements you make, but it can be regained quickly by either renting at a higher price or reselling the property.

The second way to gain forced appreciation is through rental increases, whether it’s based on property improvements or annual rent increases, the value of the property is tied to the increase in rents and expense control.

You need NO MONEY, NO CREDIT, NO LICENSES and NO EXPERIENCE to Buy Commercial Investment Real Estate

You don’t need good credit or money to buy commercial real estate and reap the kind of monthly cash flow that can let you quit your J-O-B.

There are alternative strategies you can use to own commercial investment property that do not require good credit, down payment money or a job. These strategies are explained in great detail in two exceptional real estate investing guides recommended in the Real Estate Investing Section of the main website SmallCommercialMortgageOnline.com

One guide focuses on apartment building investing. The other guide focuses on business commercial property.

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