FROM RAGS TO RICHES

Novice investors start out by purchasing a single family home, or maybe a duplex. This is a safe yet conservative investment and the investor will enjoy gains mostly due to appreciation, not by revenue streams.  The Internal Rate of Return (IRR) is very low.  If there a mortgage on the property, after taxes and insurance there may be $100 or $200 per month left over.

When the investor becomes more savvy, they purchase a smaller multi-family property, such as a quadruplex. The IRR is greater than a single family house, yet the investor has to deal with home renters, everyday people who may or may not pay the rent.

Finally the developing investor graduates to commercial real estate, purchasing a small strip center, or a multi-tenanted commercial building. This allows for greater cash flow, and faster appreciation if location and building factors are favorable. This investor leases to professionals and business owners, whom are more credit worthiness and will meet their lease obligations.

Commercial real estate market declined due to cautious investors and Covid 19.

Check out my blog on where to invest: https://tambaycommercial.com/commercial-real-estate-tanked-time-to-go-bargain-shopping