17 Ways To Turn A Profit In Commercial Real Estate

 

 

Many real estate investors want to be involved in commercial real estate deals because of the potential for profit. Though there are dozens of ways to turn a profit, these 17 ideas are some of the best:

  1. Buy-N-Holds: buying properties and holding them as rentals or for property appreciation rather than selling
  2. Partnerships: when two or more parties purchase a property together
  3. Flips: finding properties at significant discounts and then selling to investors, contractors, or end buyers
  4. Resource extraction: resources such as oil or crops can provide revenue in addition to potential appreciation of the property
  5. Wholesaling: similar to flips but assigns the contract to an investor or end buyer rather than directly buying and selling the property
  6. Turn-Keys: similar to fix and flips requiring a full renovating of the property before selling (primarily to investors)
  7. Leases: many businesses or other tenants get tax benefits from leasing building space rather than owning it
  8. Foreclosure properties: purchase properties at a discount before they are seized by local or state government agencies from owners that default (non-payment)
  9. Short sales: banks have a lot of hassle and costs associated with the foreclosure process, especially with commercial real estate, and are often willing to offer steep discounts on these properties to sell them quickly
  10. Lease options: essentially leases with an additional option to buy the property at a specified price at a designated time in the future
  11. Construction: building various structures to be sold to businesses, investors, or even contractors in some cases
  12. Fix and Flips: similar to flips, but involves renovating before selling to investors, contractors, or end buyers
  13. Buyer financing: alternative to conventional loans. Involves providing funding to real estate buyers so that they can fund their deals that will be repaid with interest according to financing terms
  14. Consultations: providing consultations in exchange for a percentage of the profit or recurring monthly income from the property
  15. Seller financing: alternative to conventional loans. Involves providing funds to real estate sellers so that they can fund their deals. Requires repayment plus interest just like buyer financing
  16. Purchase REOs: properties owned by an institution (typically a bank) that can be bought at steep discounts and sold to end buyers. Institutions are usually motivated to sell and price properties accordingly because they aren’t generating any revenue on these
  17. Rentals: owning rental properties such as apartments or office spaces that will be rented to tenants to generate long-term cash flows

Ways to turn profit with commercial real estate are wide and diverse allowing investors to customize their investing strategy. Massive profits come to those who build a solid strategy that uses several, if not all, of these strategies.

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