FAQ's

There’s quite a few questions that I get as a broker but here are the top 5 that might be able to answer a few of your own questions. 

1.How do I get started in investing in Real Estate?

There are a couple of different ways to get started. First options is to buy a 4-plex, live in one side, get an FHA mortgage, live for free and rent out the other space to make income. Second option is to flip houses or apartments, purchasing a lower cost home and revamping and then turn around and resell for more. You can save the money to use as a downpayment on a larger investment later on.

2. What is the rent if the rent is 10/sq ft?

Rent on commercial properties are calculated on a per-year basis. So if the spot was 1000 sq ft and rents for $10/sq ft. 10x1000 = 10,000. So, $10,000/12 months = $833.33/month for rent.

3.Can I buy a property without a commercial realtor?

You can bit you will miss quite a number of listings. Commercial properties are not located in one spot like residential properties. In commercial real estate, we share listings with each other to get the word out. Sometimes this is the only way to sell a property because some sellers do not want the properties on the open market. There is also not a centrally located place to put commercial properties like residential. We search the Internet and talk to people to find properties. 

4. What is a 1031 Tax Exchange?

A 1031 Tax Exchange is a way to sell your investment property and invest in another property while delaying taxes. The point is to keep delaying until you retire and get into a better tax bracket or your heir inherited the property. The way it works is that you close on your original property, you have to name some properties to purchase within 45 days, and close within 180 days. You have to then use a 3rd party to hold t he proceeds until you close on your second property. This is a great avenue to increase wealth.

5. What is a Cap Rate?

Cap rate is how investors determine the price for a property. The short answer is that you determine a cap rate by dividing the NOI (net operating income) divided by the price and get a cap rate. NOI is income minus expenses (except mortgage and interest). Different classes of commercial properties have different cap rates. Currently industrial and multifamily have the lowest cap rate and then retail and then at the top is office. The higher the cap rate the more risk there is with the property.

Have any other questions? Contact me! I'd love to answer any questions you have.