Making Money in Commercial Real Estate

Have you ever thought about owning commercial income property? One of the most consistent and reliable ways that investors have been making money, for hundreds, maybe a thousand years, has been in the buying and renting and selling of property.

That said, plenty of money has been lost in the same. So what is the difference between the investors that make it, and the ones that don't?

First, savvy investors do not over extend themselves. The smart investor will make sure that they spend what they can afford--even if there is a market downturn, or a natural disaster, or a major expense. Too many people who buy property buy more than they can afford, and then run into problems. In fact that is the simple explanation for our current economic woes!

Next, savvy investors choose the right property or properties. "Location, location, location!" and don't forget it. A high end boutique will not thrive on the back of a country road next to the chicken farm. An ice-cream shop will not survive if it is the only shop on a busy highway. You have to decide what kind of investment property will best suit you and your area, and what area will best suit the kind of investment property you want. Do not skimp on the research here! Take your time, be observant and make smart choices.

Finally management of the property will make or break your investment. Choosing the right property manager who can successfully market your property, and who can screen tenants, handle upkeep, etc. is give you the best chance at a positive ROI. Property managers and property management companies have different areas of expertise and specialty, and you should look for one that has worked with similar types of businesses in your area and has a positive track record.

If you would like more information on property management or investment properties in the Carolinas, please check out our website at www.kuester.com.

Is Now a Good Time to Buy Commercial Property?

Did you know that RIGHT NOW is one of the best times to purchase Commercial Real Estate in decades!

"But the economy..." you say. Well, yes, EXACTLY! Because of the bad economic conditions and the very unfortunate real estate situation, it is a "buyers market" for both residential and commercial property. Now is the time to pick up a great deal if you are willing and able. But this means that you have to have really good credit and probably cash on hand.

There are a many things to consider if a commercial real estate purchase is in your future, including the best type of property, the location and how to finance it. The option for a" Financing Purchase Transaction" should be looked at especially. Financing purchase transactions for owner occupant (meaning for your business) type loan requests may be a possibility for you, and may be a better option than other types of commercial mortgages since they are hard to qualify for currently. You may want to consider this option over other commercial mortgage programs, such a conventional and investor.

Need more convincing? We are currently at historic lows with property values, having dropped 30 -40% in the last 3 years. Historically, after a down cycle, property values came back up rapidly after the banking industry stabilizes and we are almost at that point. Do not miss out on a great opportunity.

Many business owners will be remiss in a few years that they did not take advantage of one this moment in time -- one of the best to purchase commercial real estate since the Great Depression.

If you are interested in purchasing commercial investment property in the Carolinas, check out our website at www.kuester.com.

How to Find A Good Investment Property

There are a lot of properties out there right now, and if you have the opportunity to purchase a great investment, now is a wonderful time to buy.

However, if you really want to get the best deal on investment properties, you have to increase your odds of finding the best one--one that will be a money maker! Do you really want that GREAT investment property? Then you are going to have to be vigilant—check your resources and keep your eyes and ears open! Looking through the MLS listings is not enough any more. Here are ten ways you can increase your chances of getting the best deals:

1. Tell people what you are looking for. Let the right people know what you are looking for and let them help you find the properties. There are a lot of owners out there who want to sell, but haven't yet listed their property -- and they may mention it to friends or families. You could catch one of these great deals ahead of time!

2. Go online. Go to a search engine and enter the type of real estate you are looking for, in the appropriate city. Sometimes you can get a good opportunity here -- and other times not, but this is a great place for a first step.

3. FSBO sometimes pays off. Drive around looking for "For Sale By Owner" signs. Owners often don't want to pay to keep the ad in the paper every week, so you won't see all properties there. A FSBO sign might mean a great price for you, and a seller who will be eager to sell.

4. Look for abandoned properties. An abandoned property means that the owner doesn't want to deal with the property, or can't for whatever reason, and may sell cheap.

5. Look at "For Rent" ads. Save newspapers or look at old craigslist ads that are a few weeks old. If the rental unit was not rented, the landlord might be ready to sell.

6. Bankers are great friends! Bankers are in the know and you might get a lead on a foreclosed-on investment property, and get it cheaper if you buy it before it's listed with a real estate agent.

7. Pay for leads. There are people that always seem to hear about the good deals - so offer them a finding fee!

8. Take advantage of eviction notices. Many local papers publish eviction notices,and sometime this information isinformation at the courthouse. A landlord who just went through evicting tenants may be ready to sell.

9. Advertise. Place your own "Looking for investment properties to buy," ad on Craigslist, or on a sign, or the newspaper.

10. Call Kuester! (888.600.5044). We will work with you to find the perfect property for you!

What Do You Need to Know When Investing in Commercial Property?

The commercial investment property sector in the Carolinas is looking strong in the coming year and we predict it will make a near-to-full recovery throughout the year. Expect positive growth in rent and capital values, which will support your investment, and allow you to recoup some costs from the last few dismal years.

This is great news for many commercial property investors and owners like yourself. For those looking at making a start in commercial property, or who are interested in buying an additional investment property, there are some things you need to remember about making an investment in this economy. The industry is vulnerable to a number of fluctuations and does not always follow the trends of the rest of the market--so it is important to understand how!

Design: Codes and Trends- Commercial office space and industrial property responds more strongly to changes in building design trends. Compliance and standards can also add to the costs of maintenance of commercial property which can affect your profit margin. Make an effort to keep

Location, Location, Location- if the prime industrial district shifts, or the other commercial properties around yours close, this could drastically change the capital value of your prospect and your potential rental return of your investment.

Buy With the Intent to Sell- commercial property can be harder to sell in tough markets than other investments. In a tight market, where it is a buyer's market, remember that whatever you buy, will at some point need to be sold. So a good deal needs to be a money-maker - each and every time.

Risk- As with any investment, there is risk involved in commercial real estate. Investing means you are taking on all of the risk associated with the ownership of the property, and will be responsible for any maintenance costs and upgrades that need to be made. You need to be willing and able to accept the risks -- take full responsibility and ownership and

The most important thing to remember, is that if you are interested in making a sound commercial property investment. Make smart choices and have a diverse portfolio! Real estate helps to offset shorter term investments and a good balance of residential and commercial are the often the most practical.

If you would like more information on commercial property investment in the Carolinas, give Kuester a call at 888.600.5044.

Is It Still a Good Time to Invest? YES

If you are like many Americans, you have been watching the markets with concern, but if you are among the lucky few who have been riding this storm, who have been hanging on, and maybe have a little bit of investment capital left, now might be a great opportunity to jump into the investment real estate business.

Kuester has many available properties in the Carolinas for you to choose from. Now is a great time to buy - it is a strong buyers market with many commercial properties currently selling below their appraised value.

If you are a serious investor willing to do what it takes to find the right property, and work with the right people, please give Kuester Property Management a call at 888.600.5044

Multi-Family Rental Units

Before you consider purchasing a multi-family rental unit, it is important to consider the cash flow potential of the building. There are many complex models with which to make the calculation, but the best one is a straight forward look at the historical data on the building and comparing similar properties.

A great place to start is to pick up a free copy of a "Renter Guide" or other apartment search magazine. Check out the available rentals for comparable sized units (sq footage), and number of bedrooms within the same vicinity as yours. If there are apartments located within the same neighborhood as your units, find out how much they are renting for. Your prospective renters will be comparing prices, so you should know your competition. Consider options, updates and other features. What makes your unit better? What are some selling points that your units offer?

Once you have researched the comparables, you should request the Schedule E from the current owner. This document is the income or income loss statement for the unit and shows the rental income and expenses and the net income or loss generated for the year. Remember that a net loss is not necessarily a bad thing, as most owners will try to report a loss for tax purposes. You will need to look beyond the bottom line to examine the rents charged. What are the rental prices of the units (are they at or below market value?) What is being charged for utilities? (And what is the actual cost of utilities?) Are there units that spend a long time vacant? How long does a unit sit vacant on average? If a unit sits empty it could mean that it is not a good investment—or it could mean that the landlord did not market the unit properly. Ask the seller—there may be a good reason. You should also check to see what major expenses that the units had – such as electric work or a new roof. This could be the reason for a loss being shown, but are really positives for you. This says that the owner maintained the property, and those are things you won’t need to take care of in the first year of owning a new investment property.

Your next step is to do some simple math. You can expect that for every dollar you make in rent – you really make $0.95. This will roughly take into account the amount of vacancy time you might have. Take that amount and subtract your monthly expenses such as utilities, insurance, lawn care, etc. and your monthly mortgage payment. Then deduct 10% for incidentals for repairs. If the number ends up a positive… then multi unit investment property may be for you!

Finally you should ask the current owner what the length of each current tenants lease is. If the property is currently renting for under market value, you will need to know when you will have the opportunity to raise the rent to the market price.

What you should know - Investing in property

To many, being an investment property owner is the best way to financial freedom. Owning real estate can certainly create and build wealth. However, owning investment property is not something that comes without work. Finding the best property, negotiating the contract, and then finding tenants and managing the property are all obvious tasks, but the most important things... are Time and Money. Managing these are the hardest jobs in investment property!

Before you get started – there are a two things you should know:

Time is of the Essence:
Do you plan to own the property for a long time, or turn it around quickly? These are important questions when trying to figure out what upgrades and improvements should be done. Also, you can expect that if you do own the property for 5-10 years, or longer, that there will be a new roof that needs to be put on, or a furnace that needs to be replaced. Your investment will need continual investing to keep it in top condition—but if you are only planning on hanging on to it for a year or two, you won’t want to sink money into unneeded expenses that you won’t be able to recoup.

Time is also important as you time the purchase and sale of the property, and balancing that against your needs, situation and the property you are looking for. Timing your sale or purchase is tricky, and that is where having a commercial real estate company on your site can make or break the investment. You don’t want to pay too much when you buy, nor do you want to wait too long when you are ready to sell. Timing can be your best friend or your worst enemy.

Money. Money. Money.
Having money on hand and a great credit situation is imperative for investment property owners. Besides having the cash to buy the property, having the monies available to make repairs and manage emergencies is important.

Work with you financial advisor to determine the property amount of cash vs. loans that you will need to get the right mix for your expenses as well as what you will need to make your payments and still have what you need “just in case.”

You also should make sure you can save enough for retirement and other long-term goals before making the investment. Property ownership is not a sure bet, so it is important to not put all your eggs in one basket!

Property Manager
Kuester Property Management
Charlotte, North Carolina

Commercial Property as a Retirement Investment

What is your long term plan for income after retirement? Many people, especially those who have been in business the majority of their adult lives, have chosen commercial property as a way to provide themselves with long-term monthly income through their retirement.


A good choice in commercial real estate can not only earn you the money to live off of, but be a significant asset in your estate, even after your death.


Investing in commercial real estate, as much as it has great potential, is not a decision that should be entered into lightly. As with any investment, there is risk involved, but there are several things that you can do to reduce that risk:



1) Do Your Research: Take your time and research the property before making a purchase decision. What is the land zoned for? Has there ever been any problems on the property, are their current tenants? Are the buildings (if any) sound and ready to be leased, or will work need to be done first?



2) Make sure you have enough money: The purchase price may be in your budget, but is the cost of needed repairs, fees, taxes, maintenance, management, etc.



3) Consult your attorney: As with any real estate transaction, having an attorney to advise you and go through the contract is a must to be able to project yourself.

Investing in commercial property can be a very wise decision--one that could see you comfortably through your retirement. However, it is a choice that should come only after long and careful consideration!

If you would like to know more about investing in commercial real estate in the Charlotte area, just give us a call at 888.600.5044!

Kuester Property Management

Should You Invest in Real Estate?

Real estate investing can be risky... and very rewarding! The first thing you should know about property investment is to be careful with "too good to be true" and "sure bets." As with any opportunity, there are people who look to take advantage of others and it is important to not get caught up in schemes that can bankrupt your before you ever get started.

If you are seriously considering investing in real estate property, here are a few things you should know to get you started.

•You should have plenty of investment capital, not only to make the purchase, but to make the necessary upgrades and pay the taxes. If an opportunity comes to you and you are being sold a "no-money-down" option, this is probably too good to be true. Also, if you are asked to take a huge loan that will put you in a debt you can't get out of, this is probably too good to be true! Always go into an investment with cash on hand and plenty to live off of as well!

•You should have a good knowledge of the real estate market and the area in which you are looking to buy property. Is this an area that is growing? Are there businesses to support your tenants or future buyers? What are other properties in the neighborhood selling/renting for?

•You should have good management, people and negotiating skills--or you should have a property management company work for you that does. Collecting rent, managing repairs and finding tenants can be a difficult job.

•You should have the ability to do repair work, access to people who can do it for you, or a good property management company who can arrange and coordinate the work that will need to be done.

•You should have a relationship with a property inspector who can evaluate properties before you buy them and validate the claims by the sellers of repair work that they have done.

Finding a good property in which to invest and making that into a rental property, or turning it around for sale can be a job in and of itself. That is why many people are turning to property management companies to turn their investments, into profitable businesses.

If you are interested in learning how a professional property management company in the Carolinas can assist you with your investment property, please contact Kuester Property Management.

Reasons for Hiring a Poperty Manager

Many people have chosen to make property an investment, and the smart and lucky ones have made a significant amount of money with this investment. Using a professional property management company can assist you in turning your investment into a profitable one.

A Property Management Company can maintain your property, find and screen tenants to lease your real estate to, collects the rent and handle maintenance and other tenant issues. Here are just a few reasons you should consider a Property Management Company:

1. Experience and Expertise:

Your goal with your investment property is to have the property make money for you. You do this by keeping the expenses low, and maximizing the income potential. An experienced property management company knows what can be done and has the ability to do it in an efficient way. They are also aware of the best practices, rules and laws in property management in your area and can give you the advantage of their knowledge so that you don't make errors in judgement that end up costing you your profits!

2. Property Maintenance.

Keeping your property maintained and attractive is important to retain its value and attract tenants. Maintaining a property can be hard work and require anything from minor grounds-work to major repairs. Your property management company not only has the relationships with the best contractors, they will be able to manage the day to day and the non-routine maintenance such that your investment is kept in tip-top shape at the best possible cost.

3. Getting the Price Right.

Getting the price right, and marketing it correctly can make or break your investment. If you go too high, you wont get tenants; not marketing it correctly, means you wont get tenants. AND... without tenants, you are losing money each month! By working with a qualified and professional property management company, you can assure yourself that the prices set are competitive in your market, for the type of property you have and that you have directed your marketing efforts at the proper demographic.

Owning investment property can be a lucrative income stream, but it takes good decision making and professional know-how to make this work. Feel free to contact Kuester Property Management to learn how we can assist you manage and market your investment.