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:
- Buy-N-Holds: buying properties and holding them as rentals or for property appreciation rather than selling
- Partnerships: when two or more parties purchase a property together
- Flips: finding properties at significant discounts and then selling to investors, contractors, or end buyers
- Resource extraction: resources such as oil or crops can provide revenue in addition to potential appreciation of the property
- Wholesaling: similar to flips but assigns the contract to an investor or end buyer rather than directly buying and selling the property
- Turn-Keys: similar to fix and flips requiring a full renovating of the property before selling (primarily to investors)
- Leases: many businesses or other tenants get tax benefits from leasing building space rather than owning it
- Foreclosure properties: purchase properties at a discount before they are seized by local or state government agencies from owners that default (non-payment)
- 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
- Lease options: essentially leases with an additional option to buy the property at a specified price at a designated time in the future
- Construction: building various structures to be sold to businesses, investors, or even contractors in some cases
- Fix and Flips: similar to flips, but involves renovating before selling to investors, contractors, or end buyers
- 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
- Consultations: providing consultations in exchange for a percentage of the profit or recurring monthly income from the property
- 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
- 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
- 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.