Commercial Real Estate Creates Cash Flow
Real cash flow and exponential returns are created in real estate investment properties through two basic strategies; (a.) opportunistic buying, and/or (b.) investing in commercial real estate assets. Historically residential real estate investments offer an average of 4.5% cap rates while commercial real estate investments offer 8%, 10% and even 12% cap rates.
So, what does that mean? A cap rate can be seen as a return on the value of an investment. In the simplest terms, an investment worth $500,000 with a 10% cap rate means that the investment yields $50,000 in annual cash flow! When one calculates the cash on cash return of an investment worth $500,000 where the investor has only invested $150,000 of their own cash and has a loan for the balance and the IRR for the investment sky rockets.
For those serious single family residential real estate investors looking to move their investment portfolio into the next level, making the transition into small commercial real estate investment properties is the logical choice. Small commercial real estate investments are easy to get into and can be obtained by leveraging the current residential investment portfolio.
Find out more by contacting an EnTrust Realty professional today. EZRE was designed to help investors make the transition from residential to commercial. EZRE by EnTrust Realty, we make real estate investing easy! Contact us today!