Taking The Leap Into Commercial Real Estate

By Angel Gonzalez and Brittany Gonzalez

This book provides valuable insights into commercial real estate syndication and the benefits it can offer to investors. By pooling their resources together, investors can gain access to larger and more lucrative properties, which can help them achieve their financial goals.

The investment strategies outlined in the book focuses on value-add investments, which involve acquiring properties that can be improved through strategic management and renovations. This approach can generate increased cash flow and appreciation, leading to long-term growth for investors.

The Keystone Advantages strategies offer investors access to recession-resistant real estate, high-quality investment opportunities, and regular passive cash flow. By investing in prevetted private equity transactions, investors can also benefit from strategic placement of their investment capital.

Overall, this book is a valuable resource for anyone interested in commercial real estate syndication and the potential benefits it can offer. Whether you're a seasoned investor or just starting out, understanding the principles of syndication and value-add investments could be key to achieving your financial goals.

• Language: English
• Publisher: Fulton Books, Inc.
• Release date: Mar 28, 2024
• ISBN: 9798889820369

Book preview

Table of Contents

Introduction

Commercial Real Estate Investment

Chapter 1: Decide whether to Invest in Commercial Real Estate

What is real estate?

What is commercial real estate?

How does commercial real estate differ from residential real estate?

Why you should invest in commercial real estate

Risk of investing in commercial real estate

Challenges that real estate investors face

Chapter 2: Investing in a Real Estate Syndication

What is a real estate syndication?

How are real estate syndications formed?

History of real estate syndication

Members of a real estate syndication

Stages of real estate syndication

Legal structure of real estate syndication

Compensation structure of real estate syndication

Importance of structures in real estate syndications

Benefits of joining a real estate syndication

Disadvantages of investing in a real estate syndication

Syndication versus Crowdfunding versus REIT

Syndication versus real estate investment trust (REIT)

Guidelines to Invest in a Syndicate

Chapter 3: Determine Your Investment Goals

Why set financial goals?

What to consider when setting investment goals

How to map out your investment goals

What are real estate syndication investment objectives?

Tips on sticking to investment goals

Chapter conclusion

Chapter 4: Finding the Right Investment

How to find the right real estate syndication

Factors to consider before joining a real estate syndicate

How to find the right commercial real estate investment

Chapter 5: Reserving Your Spot

What is a soft reserve?

Chapter 6: Reviewing Legal Documents

Private Placement Memorandum (PPM)

Importance of private placement memorandum

Operating agreement/limited partnership agreement

Subscription agreement

How to review legal documents

Commit to More Financial Freedom

Chapter 7: How to Make the Most of Any Real Estate Investment

Common investing mistakes

Conclusion

Sources

About the Authors

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Taking The Leap Into Commercial Real Estate

Angel Gonzalez and Brittany Gonzalez

Copyright © 2024 Angel Gonzalez & Brittany Gonzalez

All rights reserved

First Edition

Fulton Books

Meadville, PA

Published by Fulton Books 2024

ISBN 979-8-88982-035-2 (paperback)

ISBN 979-8-88982-036-9 (digital)

Printed in the United States of America

Introduction

The world of commercial real estate investing can be a complex and intimidating one, but it also holds vast opportunities for financial growth and success. Taking The Leap Into Commercial Real Estate is a comprehensive guide that takes readers on a journey through the world of commercial real estate investment with a focus on the syndication process.

Real estate syndication is a relatively new concept in the world of investing. It's a way to pool your money with other investors and make big returns on investments. Real estate syndication allows you to invest in commercial real estates such as industrial properties, warehouses, and factories, as well as land or development sites that you ordinarily would be unable to purchase on your own.

This book provides detailed information into the world of commercial real estate syndication and how to achieve financial freedom through it. It covers the basics of investing to the more complex details of the process. We also provide valuable insights into common challenges and how to overcome them. If you're new to this market or have been following it for a while, we are convinced you'll find something useful here. Our goal is to help you understand what syndication is, how and why it works for commercial real estate, and how you can use it to get access to funding for your next project.

If you've decided that commercial real estate investment is for you, then we hope this book will help you understand what it's like to be an investor in this field. The truth remains that there are many different opportunities to be tapped in the real estate world, and more often than not, investors may need some support from like-minded people. With its comprehensive approach, this book is the perfect starting point for anyone looking to take the leap into commercial real estate through syndication.

Section 1

Commercial Real Estate Investment

In this section, we shall be discussing commercial real estate as a whole and how to invest in commercial real estate using syndication. The following chapters will cover everything you need to know about commercial real estate investment and real estate syndication.

Chapter 1

Decide whether to Invest in Commercial Real Estate

Deciding to invest in real estate is not a decision that should be taken lightly. This is because, without adequate preparation and implementation, this golden opportunity to gain financial independence can quickly turn into a disaster, where instead of making money, an investor incurs irredeemable losses.

Before diving into real estate, you need to have a thorough understanding of what it entails, the possible risks and challenges you might encounter, and the benefits to look forward to. With this information at your fingertips and diligent efforts, you'll stand a greater chance of minimizing crises during your investment journey and achieving your investment goals and objectives.

What is real estate?

Apart from being one of the most commonly used phrases when it comes to investments in the financial market, real estate is also one of the most profitable and safest forms of investments available. The real estate market is so vast that it is a major driver of the overall economic status of a country. This is a demonstrable fact seen during the housing market crash in 2007, which, in turn, prompted the Great Recession that occurred in 2008–2009.

Real estate encompasses lands, natural resources—crops and minerals—found on the land, and any permanent structure erected on it, whether natural or man-made. People often make the mistake of including personal property such as automobiles, boats, jewelries, furnishings, and farm equipment as part of real estate. However, these properties cannot be considered real estate because they are not permanent structures constructed on the land.

There are many aspects of real estate that make it one of the most attractive investment vehicles in the world today. First and foremost, it offers the potential for high returns with limited downside risk. Real estate can also provide a steady stream of income, similar to bonds, while simultaneously appreciating in value. Real estate also provides investors with an opportunity to diversify their portfolio with a real, tangible asset. Finally, real estate can provide investors with tax benefits not available through other forms of investments.

Investors can invest directly by purchasing real property for the purposes of capital appreciation or rental income. Similarly, they can invest in real estate indirectly via a real estate investment trust (REIT). These are companies that own several forms of income-generating real estate. To invest in a REIT, one buys shares in these properties, and these shares are traded publicly on a licensed exchange. The profits generated from these types of investments are gained through dividend payments and appreciation of the shares. Other indirect forms of investing in real estate include real estate mutual funds and real estate exchange-traded funds (ETFs).

While the main purpose of this chapter is to discuss commercial real estate in detail, it would be a mistake not to briefly mention the other types of real estate. They include the following:

Residential real estate

This describes buildings and properties that are solely used for the purpose of providing living areas for people. They include

single-family homes,

detached homes,

condominiums,

apartments,

houseboats, and

multifamily properties with less than five units such as duplexes, triplexes, etc.

Land

This refers to undeveloped or empty lands that are typically purchased to provide a financial cushion against economic crisis or for the purpose of development. Such developments include

residential development,

commercial development,

farming, and

livestock-raising.

What is commercial real estate?

Commercial Real Estate is comprised of all real estate properties held solely for business purposes and to generate income. These properties include office buildings, multifamily properties, warehouses, shopping malls, etc.

Commercial real estate