Today’s question is “How do I get started investing in commercial real estate?”
It’s amazing how much new construction is out there, both residential and commercial. You might not know it, but the ability to invest in commercial real estate has been around for years. If you have ever heard of a REIT, it’s short for real estate investment trust, and it allows you to invest in commercial property as a fragmental owner.
The downside with REITs is that the minimum amount you need to invest can be extremely high and it’s obviously not a strategy for everybody. If you take a look at an area like Air Park East, you’re talking about a billion dollars to build something along those lines today. You don’t want 400,000 people in on a commercial investment because then it becomes a logistical nightmare.
There are some other ways to invest that don’t require a minimum investment. Venture capital is an option, but it’s also riskier. It doesn’t give you as much diversification as an IRA, for example.
“Private equity has also entered the real estate world.”
Private equity has also entered the real estate world. Companies like Opendoor and Offerpad are stepping into the real estate world and buying up both residential and commercial properties.
Make sure you talk to a financial advisor because there can be certain tax implications with investing in these types of funds. A lot of it has to do with your age, but each situation is different.
It’s really about your personal risk tolerance, because there are plenty of options for investing in real estate in today’s market. If you’d like to talk about what kind of investment might be right for you or have any other questions about real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
