Commercial Real Estate Is Too Expensive

This is probably the biggest misconception of commercial real estate investing. When investors hear the world commercial, they think Donald Trump and skyscrapers. However, commercial means much more than that.

Many commercial properties have non-recourse loans attached to them that are assumable by a new investor. These non-recourse loans sometimes require a minimal down payment and the tenant(s) pay off the mortgage, giving you a positive cash flow.

Currently, there is a national chain bookstore in the Atlanta area which is being sold for $2.5mm. However, you can assume the loan with a down payment of only $250,000. Sound too good to be true? Better yet, the loan is paid off by 2023 and you now own a national chain bookstore for a $250,000 down payment.

By the way, the property cash flows at $17,000 per year. If you took that same $250,000 and tried to buy some foreclosures houses, that still wouldn’t give you nearly the equity nor the monthly cash flow.

To make this strategy even better. Let's say that you have an IRA worth about $300,000. You could pull it out of the market, make it a self-directed IRA, and then invest it into the national bookstore chain.

So you can turn your $300,000 IRA into a $2.5mm building for you to retire on.

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