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The Ideal Commercial Wealth-Building Strategies You Need to Know

The Ideal Commercial Wealth-Building Strategies You Need to Know

Commercial real estate is indeed nothing less than an institutionalized asset class. The current real estate market scenario differs a lot from before. Over time, strategies of commercial real estate have evolved and increased simultaneously. There are now several ways of investing in commercial real estate in actuality. Also, the various ways to invest are influenced by asset type, property location, strategy, and many other things. Today, people take the help of commercial investment advisors for wealth building strategies in Texas.

In this post, you will come to know about the ideal commercial investment strategies that can help you get a good return on investment.

The Commercial BRRRR

The commercial BRRRR strategy is popular when it comes to evaluating investments. BRRRR stands for Buy, Rehab, Rent, Refinance, and Repeat. It is a significantly scalable strategy and could be utilized on single-tenant office properties to garden-style apartments with several units.

Buying an undervalued property

This strategy is finding a property that is not valued or appreciated enough. It can be in distressed-seller circumstances but probably requires a noteworthy value addition. It would be best if you were interested in this investment at much lesser replacement costs in such scenarios.

Renovating the building

The next step of the BRRRR strategy is restoring the property. However, the intent of the building’s restoration is not based on comparable trading multiples. The renovation target should be based on increasing the recognized value to tenants. The general renovations for commercial buildings include:

  • Updated Flooring
  • New Signage & Directories
  • Interior and Exterior Paint
  • New Lighting

Even though you want to renovate above and beyond these points, they will make any building look brand new.

Renting the property to the tenants

After you have finished upgrading the building’s look and feel, it is high to get it leased. However, suppose you have a background in commercial leasing. In that case, it is right to go for lease brokerage or acquire a property management company’s help. The faster you can lease out space, the quicker you can move on to the next step.

Refinance the investment

Now the best part is when you have restored the building and leased it up, it is time to take all your cash out of the investment. Yes, you read it right. When you have done the previous steps correctly, you must refinance it on a cap rate and take the primary investment out of the deal. However, you will still be the property owner and receiving that money.

Repeat the process

Now that you have got your capital back, built up your balance sheet, it is time to repeat the process. Make sure to create that portfolio of commercial real estate.
Overall, it would be wise to get the help of an investment advisor to take the right steps in getting the returns out of your commercial real estate investment.


Disclaimer

This Property Summary has been prepared solely for, and is being delivered on a confidential basis to, persons considering a possible business relationship with the Company (defined in the offering package). This Presentation is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instrument of the Company. No offer of securities shall be made except by means of a private placement memorandum meeting the requirements of the Securities Act of 1933, as amended, and applicable regulations of jurisdiction in which such an offer may be made. Any reproduction of this Property Summary, in whole or in part, or the disclosure of its contents, without the prior written consent of the Company, is prohibited. WealthBCI makes no representations, express or implied, regarding the accuracy or completeness of this information, and the reader accepts all risks in relying on the above information for any purpose whatsoever. Certain information presented or relied upon in this presentation has been obtained from third party sources believed to be reliable, however, we do not guarantee the accuracy, completeness or fairness of the information presented. These materials are not intended to provide, and should not be relied upon for investment, accounting, legal or tax advice. Actual transactions described herein are for illustrative purposes only, are presented as of underwriting and are not indicative of actual performance, and were selected based on objective, non-performance factors such as asset-type, geography or transaction date, among others. Before making an investment decision with respect to any investment, investors are advised to carefully read the related final documentation and offering memorandum documents. No offer of securities shall be made except by means of a private placement memorandum meeting the requirements of the Securities Act of 1933, as amended, and applicable regulations of jurisdiction in which such an offer may be made. Any reproduction of this Property Summary, in whole or in part, or the disclosure of its contents, without the prior written consent of the Company, is prohibited.