Real Estate Investing

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Real Estate Investing

As with any smart investment, there is potential to earn above market returns by making real estate investments. But, that doesn’t mean it is an assured gain. Before making any real estate investment decisions, you should weigh out the costs and benefits, know your market and make careful choices every step of the way.

At PropFunds, we understand every aspect of underwriting an investment and how to best maximize each and every property’s value. We personally vet every real estate investment property we raise capital for, and we oversee the operations of every property for as long as the asset is held. With PropFunds, you have over 150 years of combined real estate investing experience by your side.

Safe Real Estate Investments

Our primary obligation is to protect our investors’ capital, and we do not take this responsibility lightly. We understand investors want a safe real estate investment option that will earn them a high rate of return while incurring minimal risk.

PropFunds primarily targets well located and functional properties. We have experience successfully purchasing and operating commercial office projects, hotels, multi-family apartments, industrial, single tenant net leased (NNN Leased properties), luxury homes and the funding of first trust deeds.

How Do I Invest in Net Leased Properties?

“Net Lease” means your lease in structured in such a way that the lessee is responsible for paying all or a portion of common ownership expenses, in addition to rent. An NNN (Net-Net-Net) Lease is a net lease structured as a turnkey real estate investment property. In this “Triple Net” Lease, the tenant is responsible for paying the three most common related expenses: property taxes, insurance and maintenance costs.

NNN properties can be almost anything, from a Walgreen’s Drug Store or a dollar store to a Firestone or even a fast food restaurant. NNN Leases are often preferred by big business who do not want to own the building they use, usually for tax purposes, so instead they rent the real estate property and pay all associated costs. The investors who own these buildings can make a highly passive income.

Triple nets are some of the most popular property types when it comes to commercial real estate investments. While these properties have little to no management responsibilities and typically maintain stable cash flows, they are not without risk. As with any investment, there are many factors to consider in valuing and structuring the deal. When you have questions and need real estate investment advice, you can trust that PropFunds has the answers you need, backed up by the experience you want.

How Do I Invest in Industrial Properties?

Although the industrial real estate market was negatively impacted during the 08-09 recessions , since 2010 the industrial real estate investment outlooks have consistently been improving. Today more and more money is flowing into the industrial sector, and for now investors have the potential to acquire high quality industrial real estate properties at below-replacement costs.

Industrial property investments offer advantages such as stable and predictable cash flow, high income returns, lower operational risks and portfolio diversification opportunities. As manufacturing continues to grow and factories continue to be moved overseas, investing in existing warehouses and industrial properties, from an investor’s supply/demand perspective, is looking more and more attractive.

How Do I Invest in Apartments?

Single-family homes can leave you with negative cash flows and can take a significant amount of time and effort to purchase and manage. Small multi-family real estate properties however, are a favorite of many real estate investors. Small multi-family real estate properties combine the purchasing benefits of a single-family home with the cash flow benefits found in larger investments.

Investing in apartment buildings is not a get-rich-quick type of investment, but with a little real estate investment advice and some good planning, investing in an apartment building is one of the best ways to build long-term wealth, and eventually with the right team create a passive income investment.

Small apartment buildings (made up of between 5 and 50 units) can be more difficult to finance, however they can be even more rewarding in terms of cash flow. Professional REIT’s (Real Estate Investment Trusts) don’t usually consider small real estate investments and novice real estate investors usually consider apartment investments to be too big, so there’s also less competition.

For more experienced investors with the necessary capital to purchase large apartments in upper-middle class neighborhoods can be an expensive proposition, but these real estate investments can also produce solid returns.

How Do I Invest in Mobile Home Parks?

Demand in the U.S. for mobile home parks is higher than ever, as many people have yet to recover after the 08-09 recession.

Warren Buffett targeted the mobile park home real estate market over a decade ago when he purchased the largest manufacturer of mobile homes. Only now are more people catching on and realizing that they’ve been overlooking a quality real estate investment option. There will always be a need for affordable housing, there is limited competition from new mobile home park developments and tenant consistency is actually high, making investing in mobile home parks an exciting opportunity.

When investing in a mobile home park, there is one form of ownership that involves the investor owning the lots, streets and surround amenities; literally investing in “the park.” The second type of ownership consists of the owner investing in the land as well as the actual homes.

How Do I Invest in Luxury Homes?

When dealing with luxury home investments, location is probably your number one most important factor. Once you decide where to start and really understand your market, you can better understand the community and what features luxury home buyers are actually going to want there.

2013 marked the highest point in six years for $1 million plus home sales, and homes over $2 million are selling at a record pace. The 08-09 recession may have caused some major setbacks, but it’s clear that luxury home investing is paying off big as the economy improves and both local and international buyers feel more and more confident.

How Do I Invest in Hotels?

Although hotels and the rest of the travel industry took a financial hit after 9/11, these sectors have been set up for and are now in the process of a spectacular comeback. While the current growth may not be possible forever, the long-term outlook for hotel investment opportunities remains high.

Investing in hotels allows investors to get into the commercial sector at an affordable and accessible level, and, as with any new investment choice, it can provide diversification to a property portfolio. When purchasing hotel real estate, investors typically can maintain the same security of ownership of property as they would a traditional investment property.

Hotel rooms are usually fully managed and maintained by professionals and experienced hotel operators. If you can find a promising niche and match it with the appropriate property (hotels in Las Vegas and hotels in Iowa have different clients and therefore different property needs) and the right management, you’ll be well on your way to earning a passive income from your real estate investment.

How Do I Invest in Offices?

Businesses consist of people, and people need a place to work. Investing in office buildings has its risks like any other investment, but it also has the potential to be a very profitable and eventually with the right team, a successful passive income investment.

The biggest risk you face when investing in office spaces is times when the rental rates fall. During really hard times your office building could be empty, and long term negative cash flows can be difficult to overcome. However, when the economy is doing well, and if you’ve done your research and planning, investing in offices can be an exciting, promising and profitable prospect.

Income Generating Investments

Why are you investing?

We invest to make extra money, we invest to retire, and sometimes we hope to be able to retire thanks to our investments.

There are countless investment options, including popular choices like dividend-paying stocks, high-yield bonds, bank-loan funds and bond funds. While traditional investments are a good start to any portfolio, it’s best to be diverse, and investing in real estate opens new doors and provides many unique advantages:

Real Estate Investments are Inflation Resistant

While goods and services continually go up in price, your monthly mortgage payment does not. Your monthly mortgage payment is fixed, so real estate investments really do come with inflation resistance. Invest in the right market and you can increase your income over time as you raise the rent for your renters.

Tax Benefits are Available with Real Estate Investing

Another great reason to invest in real estate includes the tax benefits that are not available with most other investments. One of the most valuable tax deductions allows for the depreciation of the property. Until your property is completely depreciated, a portion of your income generated each year will not be taxed.

Significant Cash Flow & Passive Income Investments

Some properties require way more time and management than other real estate investment properties. Low quality properties in bad areas can leave you with negative cash flows for years that can be difficult to overcome. It’s essential your know your market and the going rental rates, and that you understand your real estate investment expenses. A correctly purchased property, however, can earn you significant cash flow year after year; cash that is not all taxable (due to depreciation) and cash that will be generated reliably with slow and consistent increases.

In general, moderately priced real estate investments where you can charge decent rents compared to the purchase price have the best positive cash flows. Although no investment should be 100% passive, with the right team, rental properties can result in the ongoing, additional (mostly) passive income you need to help fund your retirement or take your dream vacation.

PropFunds and Real Estate Investing Advice

If you’re in need of investing advice on how to turn invest in real estate investment to create passive income investment, or over any other real estate investment topics, contact PropFunds today. We’ve got the answers you need, backed up by the experience you want.

We understand you’ve worked hard to earn the capital you have, and we believe taking on undue risk to squeeze an extra 1-2% more out of your investment is an unwise plan of action. Our primary obligation is capital preservation and we only profit when our investments perform well. If you’re uncertain about any aspect of real estate investing or need help making a deal, talk to PropFunds today to learn what you need to know in order to make your real estate investments as safe and profitable as possible.