Ezra Beyman

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Growing Revenue in Commercial Real Estate

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Real estate is a chance to make a lot of money. The residential real estate industry certainly has plenty of attention from both families and investors alike.

Commercial real estate is different. Leading investors sink money into this, be it private individuals or groups of people that pool together resources to finance large projects. The profit potential is always there, whether it’s buying and flipping or buying and holding. Commercial properties can grow in value over time but also produce rental streams of income. There are many ways to go about growing revenue in commercial real estate.

The commercial real estate sector accounts for over a trillion dollars in value across the American economy. It’s a place where you have to spend money to make money, and what kind of money you make in commercial properties will be based on how much money you can spend.

Even the smallest commercial properties and projects can cost hundreds of thousands of dollars to build or buy. You either need to be a borderline millionaire or borrow that much to become a solo investor. The risk is all yours, but then again, so are all the profits.

What’s more common is to join an investment group. Here, multiple people with financial resources pull their collective assets together to finance projects, properties, structures, and buildings that they couldn’t do independently. Usually, one person, often the one with the biggest checkbook, is designated as the leader who makes major decisions. A majority vote might also make many choices. Risk is shared, and so are the profits. If you only contribute 10 percent of the financing, you’ll only get 10 percent of the money made later. You’ll also likely have to give up certain rights and control over many matters, but you’ll get a seat at the table for a lower cost than going solo.

If you don’t want to get personally involved in a commercial property or don’t have enough money to do it, consider joining a REIT. Real estate investment trusts are like mutual funds in how they have many members all investing into one pot and all receiving dividends from the profits. The difference is that instead of being invested in stocks and bonds, REITs invest in properties and real estate.

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