How to Make Money in Commercial Real Estate: For the Small Investor » (REV)

NICHOLAS MASTERS, MBA, CPA, is a licensed real estate broker and has been a real estate investor for more than thirty years. He is also a former assistant professor of accounting.

Now in an updated second edition, How to Make Money in Commercial Real Estate helps small investors just like you get started building a profitable real estate portfolio. Focused on the high profit potential in commercial real estate—but packed with unbeatable advice for residential investing as well—the book's step-by-step approach simplifies the real estate game for beginners and explains complicated subjects in terms anyone can understand.

Written by former accounting professor and successful real estate investor Nicholas Masters, this practical guide won't show you how to get rich overnight, but it will show you how to build a profitable, successful portfolio over time. Real estate is the key to long-term wealth building, and this reliable guide gives you all the tools you need to succeed.

Point by point, Masters explains the various types of real estate, including family homes, residential complexes, shopping centers, office buildings, and undeveloped land. He explores the relative advantages and disadvantages of each type of real estate, including tax benefits and other factors that need to be considered. He shows you how to get started even without a big down payment and walks you through every step of investing in and owning property, including basic management.

If you think investing in real estate is beyond your means or skills, think again! How to Make Money in Commercial Real Estate, Second Edition shows you how to find the right properties, take advantage of auctions and foreclosures, properly value homes and buildings, negotiate the best deal possible, get great mortgage terms, and manage property profitably. With new case studies and up-to-date information, this is the ultimate resource for new investors and those who want to make the move from residential to commercial properties.

If you've ever dreamed of attaining financial security, real estate is the best way to establish a steady, reliable source of income for years to come. You don't have to be Donald Trump to succeed. All you need is the right guidance and information you can trust. Full of reliable, time-tested advice, How to Make Money in Commercial Real Estate, Second Edition takes the mystery out of buying real estate and helps you make your dream a reality.

Preface.

Acknowledgments.

PART I: PREPARING TO INVEST IN REAL ESTATE.

Chapter 1: Introduction.

How This Book Is Organized.

Before You Begin.

Career Preparation.

Insurance.

Pension Planning.

Home Ownership.

Savings.

Conclusion.

Chapter 2: Comparing Real Estate to Other Investments.

Cash.

Savings Accounts.

Debt Instruments.

Bonds and Notes.

Stocks.

Collectibles.

Precious Metals.

Mining Stocks.

Real Estate.

Leverage.

The Miracle of Compound Interest.

Real Estate Investment Trusts.

Conclusion.

Chapter 3: Evaluating Types of Real Estate.

Personal Homes and Other Small Residences.

Starter Homes.

Small Apartment Complexes.

Other Residential Properties.

Garden Apartment Complexes.

High-Rise Buildings.

Land.

Types of Land.

Net Leases.

Rate of Return.

Build-to-Suit.

Shopping Centers.

Anchored Shopping Centers.

Strip Centers.

Condominium Stores.

Office Buildings.

Warehouses and Public Storage Facilities.

Conclusion.

Chapter 4: Understanding Economic Cycles and Their Effect on Real Estate.

Economic Cycles and Real Estate.

Speculation.

Who Is a Speculator?

Economic Cycles and Lenders.

Types of Lenders.

How Lenders Profit.

Conclusion.

Chapter 5: Calculating the Long-Term Potential Profits from Real Estate.

Real Estate Profit Sources.

Positive Cash Flow.

Appreciation.

Leverage.

Conclusion.

PART II: INVESTING IN REAL ESTATE.

Chapter 6: Getting Started as a Small Investor in Commercial Real Estate.

Safety in Numbers.

Forming an Investment Club.

General Guidelines for Starting an Investment Club.

Forms of Ownership.

Individual or Joint Ownership.

Joint Ventures.

Partnerships.

Corporations.

Limited Liability Companies.

Conclusion.

Chapter 7: Finding and Evaluating Properties for Investment.

Finding Properties.

Real Estate Brokers.

Periodical Advertisements.

Word of Mouth.

Foreclosures.

Government Surplus.

Auctions.

Private Sales.

Sale Leasebacks.

Real Estate Source Roundup.

Evaluating Properties.

Self-Evaluate or Hire an Appraiser: That Is the Question.

New or Used: That Is Another Question.

Evaluation Approaches.

Conclusion.

Chapter 8: Negotiating, Financing, and Closing Real Estate Transactions.

Negotiating.

Using Brokers or Other Intermediaries.

Negotiating Leases.

Contracts of Sale.

Summary of the Negotiation Process.

Financing Commercial Real Estate.

Determining Interest Rates.

How Mortgages Work.

Types of Mortgages.

Sources of Mortgages.

The Closing.

Documentation.

At the Closing.

Conclusion.

Chapter 9: Managing Your Real Estate Investment.

Professional Management Companies.

Finding a Management Company.

Management Fees and Operations.

Monthly Reports.

Rent Collections and Billing.

Leasing.

Insurance.

Repairs, Replacements, and Capital Improvements.

Marketing Space.

Preparing for a New Tenant.

Leases.

Lease Designations.

Addendum Clauses.

Lease Summary.

On Your Own: Your Future in Real Estate.

Appendix A: Additional Deals.

Appendix B: Understanding Taxes and Real Estate.

Appendix C: Common Real Estate-Related Forms and Documents.

GLOSSARY.

INDEX.