I speak with hundreds of commercial real estate investors nationwide on a monthly basis. The same issues come up in most conversations, should someone invest solely by themselves on one single property or should they join professional seasoned veterans and become part of LLC, partnership or other forms of commercial real estate entity in a partial ownership position?
From novice investors to season veterans, some being lucky and others successful due to their experience and genuine knowledge, the question always remains – which is the better option?
Maybe the answer lies in diversification, where you end up owning a particular single asset by yourself and also take some of your monies whether in the IRA or extra savings earning low rates and put that into various commercial real estate asset groups with seasoned professionals as your partners.
After all, not being on any loans yourself, having no responsibility for tenants, management or leasing and being in with pros can’t be too bad of an option especially if you chose wisely. Most of these opportunities all seem to have similar strategies and outcomes.
You, the investor, receive a preferred return between 5 and 8 percent and at the end, when sold, receive close to 80% of the profits while the founding partners receive only 20%. Of course, depreciation shelters quite a bit of the income and usually, with no guarantee the outcome is positive in your favor. By joining various groups, you can place as little as $100,000 into the diverse Asset groups thus not putting all your eggs in one basket.
We at Westwood try to offer various options both triple net in all asset groups with the safety of quality tenants and longer-term leases, producing a nice return with possible increases in the future and long-term low-interest finance.
Or we provide options for partnerships with experienced pros you can join and have no responsibility for nice cash on cash returns and no loan responsibility.
We have many 1031 exchange deals and strategies along with IRA options. We are not paid by the commercial real estate investor but by sellers and educate, guide and submit various choices for your consideration.
We have hundreds of owner relationships allowing our clients to view off-market deals not seen on public websites. This helps eliminate competitors from beating you out of some of the best transactions in the commercial real estate market.
Since most commercial real estate investors vary from age factors to risk-reward tolerance levels, there is no one solution for everyone. Our job is to present all options and allow every investor from whatever background to select what is right for them.