Keystone ASHI Meeting for Reading Home Inspectors- March 7, 2011   The next Keystone ASHI meeting for Reading Home Inspectors will be held March 7, 2011.  The meeting is not limited to Home Inspectors in Reading and all are welcomed!  There will be a guest speaker, Darren Hack from DH Electrical, doing an electrical presentation for this month's meeting.      If you have never attended a meeting and would like more information, you can get in touch with the current Vice-President of Keystone ASHI who helps setup the meetings, David Artigliere from ARTI Home Inspections LLC by calling 610-779-1163.       The schedule for the meeting is as follows: 5-5:30 Social time 5:30 – 6:30 Roundtable discussion (Inspection related topics) 6 PM Dinner is served and you get your choice of Beef or Ch... 03/06/2011

In an earlier post I mentioned several types of businesses that make good sale/lease-back transactions.  Since then I've been asked why a business would want to take part in this type of transaction.  In a sale/lease-back a owner occupant of a building sells the property and then signs a lease with the new owner to stay in the space.  Often a business will do this as a way to unlock the equity that they have in their property.  For example, there are several small businesses in Reading, PA that own their own property.  These businesses range from retail store owners to small businesses that own the office buildings where they are located. From time to time many small businesses run into cash flow problems.  It is common to have a profitable business that for one reason or another does n... 02/12/2011

Reading Homes for Sale | Reading Homes are a Great Value in Berks County Real Estate Are you looking for information on Reading Homes? Fill out my form to receive our Free Reading Homes Report Fill out my Wufoo form! Reading Homes for Sale | The Information You Should Know Reading is really a attractive area and is also swiftly becoming a real estate hot spot as more families and individuals buy Reading Homes due to their high level of affordability. Reading homes for sale continue to be outstanding deals for virtually any real-estate investor or first time buyer. With a human population of estimated at 81,207 it provides comfort which is associated with a bigger populace without being overbearing, and is home to exceptional educational institutions, widening industry and also amazing c... 02/08/2011

It's been a little while since I added to my series on evaluating commercial real estate investments.  If you recall, we were analyzing a small retail property in downtown Reading, PA.  We looked at several aspects of the property's performance, from NOI through IRR, but one thing that we did not look at was the quality of the tenant.  There are several things to consider when looking at a potential tenant, but today I am just going to cover two important ratios that you should look at when evaluating the balance sheet of a potential tenant. The first ratio I always like to look at is the Current Ratio.  This is a measure of how well a company is positioned to handle its short term cash needs.  The Current Ratio is calculated by dividing the company's current assets by its current liabi... 02/07/2011

Like most commercial real estate, value is created in retail properties through effective leasing.  One important aspect to consider when leasing your retail real estate is your tenant mix.  In other words, you need to consider how your tenants businesses relate to one another.  Here are five questions to ask your self when evaluating a new tenant for your retail property in Reading, PA: Does the new tenant compete with your existing tenants?  For most types of retail properties, it is not a good idea to lease vacant spaces to tenants that directly compete with your existing tenants.  This is pretty obvious, but it is not always the rule.  There are some businesses that benefit by locating close to their competitors.  These are usually companies that sell big ticket items that people wa... 02/04/2011

If you are a serious commercial real estate investor sooner of later you are going to find yourself owning a property that is difficult to lease. Tenant's preferences change and what may have been attractive space a few years ago can quickly become obsolete. This problem is multiplied when the property is particularly large. Leasing to Micro-Tenants is one strategy that I've seen used to fill large hard to lease spaces. This strategy has been used in retail, office, industrial, and even multifamily and hotel properties. Retail: Often when big box retailers move out of a space it can be extremely difficult to rent. These properties can be rented to Micro-Tenants in a few different ways. One way is to turn them into indoor flea markets and rent tables or booths. Sometimes this is even don... 02/01/2011

I had an interesting meeting this weekend with a commercial real estate investor in Reading, PA.  This investor has several projects in different stages of development throughout the city.  He asked me to sit down and discuss his overall portfolio and help him figure out if and how I can help him.  Although this was only the second time I've met with this individual, he was very open about his situation and was willing to discuss several different options for each of his properties.  After our meeting I walked away thinking that we had covered a lot of ground, and I wondered what it was that made it such a productive meeting.  It took me a little while, but I realized that the answer was trust.  This investor was willing to trust me, a relative stranger, with a lot of information about ... 01/31/2011

I recently wrote a post where I mentioned investing in real estate using a self directed IRA, and since then I have received a ton of questions about how this works.  While I am very capable of helping you find, purchase, and manage commercial real estate investments for your IRA, I'm not an IRA custodian and I cannot set up a self directed IRA for you.  I would like to share some resources that I have used to learn more about investing in commercial real estate with an IRA. Websites: http://www.trustetc.com/new/real-estate-ira/ http://www.theentrustgroup.com/investment_options/real_estate/ http://www.penscotrust.com/investing/realEstate.aspx Books: IRA Wealth: Revolutionary IRA Strategies for Real Estate Investment How to Invest in Real Estate With Your IRA and 401K & Pay Little or No ... 01/27/2011

No really, real estate is actually worthless.  I'm sure that this might sound strange coming from someone who sells commercial real estate for a living.  Does this mean that I've been tricking investors for years now? Nope.  It just means that today I'm going to use that minor in philosophy that I earned in college.  This is going to sound a lot like the old "if a tree falls in the woods and no one is around to hear it..." paradox.  For example, what would you pay for a 1,000,000 SF class A office tower on Mars?  My guess is not much, at least not unless there were a ready supply of Martians to rent it from you.  So real estate does not have any intrinsic value.  This is probably true of almost everything.  If there is no demand for something, that thing has no value. Okay, what's the p... 01/27/2011

I'm often asked the question whether or not commercial real estate should be listed on the local multiple listing service (MLS).  Apparently there are some commercial real estate agents out there who tell their clients that they don't need to put their commercial property on the MLS, and there are even some agents who claim that putting commercial real estate on the MLS will somehow hurt the seller.  My guess is that this advice comes from commercial agents who don't like to pay the yearly fees to participate in the MLS. It is true that the MLS is not as effective in selling commercial real estate as many other methods.  It may not be as useful as it is in residential sales, but I do believe that it should be included in every commercial real estate agent's marketing plan.  Why?  Well, ... 01/26/2011

I realized that my blog post yesterday was titled NNN or Gross... What's The Best Type of Commercial Lease, but it never really said which type of lease was the best.  I explained the difference between the two types of leases and left it at that.  Well, as someone who hates false advertising, I offer my humble apologies.  Unfortunately, the answer is that it depends.  I know, you're wondering why you had to wait an extra day just to hear that 'it depends', but that's just how things work sometimes. For the most part, landlords benefit from NNN leases and tenants benefit from Gross leases.  This is because in general expenses tend to rise.  When a landlord signs a NNN lease, and the property's operating expenses increase, the landlord is safe, and the tenant bears these costs.  When the... 01/25/2011

NNN (Read as Triple Net) leasing is one concept in commercial real estate that is often misunderstood.  I was in a meeting on Friday with a number of commercial real estate professionals and the topic of NNN versus Gross leasing came up.  Many of the participants in the meeting have been in the business for years, anywhere from 5 to 30.  What was surprising was that a large percent of them were not completely clear about the difference between Gross and NNN leases.  One of my colleagues put me on the spot and asked that I explain this concept so that everyone would understand what we were really talking about.  I thought that there might be other commercial real estate investors in Reading, PA that could use a refresher on this concept. NNN and Gross are terms used to describe the way t... 01/24/2011

Pricing is often a touchy subject for sellers of commercial real estate.  Often a seller will want to price their property based on what they owe, what they paid, or what they'd like to get.  Unfortunately, these three numbers don't usually have much to do with what the market will bear.  Pricing a property in line with the market is the best way to attract several potential buyers.  More buyers means more chances to get the best possible price for a property.  So how do we figure out what the market price should be? There are 3 typical ways to value a property (please keep in mind I am not an appraiser).  These are the cost, the sales comparison, and the income capitalization approaches to value.  I'll describe each briefly: Cost: This approach to valuing a property is based on estimat... 01/22/2011

I spend a lot of time talking about investing in commercial real estate in Reading, PA.  I've mentioned all the great deals and explained why I think that this is such a great opportunity to buy.  I realized today that some sellers might read this and assume that I think they need to 'give away' their properties.  Nothing could be farther from the truth.  I do believe that the Reading, PA commercial real estate market is undervalued.  This is why the deals are great for investors, but I do not advocate selling properties for less than their current market values.  I also don't believe that great deals are necessarily about great prices.  There are several ways to get a great deal. Let me be clear, this is a very competitive market from the seller's perspective.  With so many well priced... 01/20/2011

I've been told time and again that the biggest challenge faced by commercial real estate investors is finding enough high quality investments to keep them gainfully employed.  A good friend of mine used to refer to finding new deals as "Feeding the Beast".  Without a steady deal-flow investors are faced with two choices.  They can either let their investment business starve, or they can choke their business by buying a less then stellar deal.  Neither of these are good options, so if you are planning on being a successful real estate investor you need to figure out how to keep the deals coming.  Here are a few ideas that I've used, or seen others use successfully. Classified Ads:  One friend mine in the business keeps an ad in his local paper every week year round.  He has two variation... 01/19/2011

Most of the commercial real estate investors that I know started off in the real estate business as residential investors.  As you can imagine, most people don't start off by buying a mall or a hotel.  So why is it that many successful investors make the switch from residential investing to commercial?  Obviously it's possible to do very well investing in houses and small multifamily properties.  I know several investors that are very well off that continue to purchase and rent these types of investments.  They are comfortable investing in a product type that they understand, and they are content with the returns that they achieve with these investments.  I know several commercial investors that were at that stage at one point in their life, and suddenly realized the one advantage that ... 01/18/2011

I met with an investor in downtown Reading, PA this weekend that was selling a mixed-use property.  The property was well located and in great condition.  What was most interesting though was that the property had several streams of income.  This was a very sophisticated investor who was able to create income well beyond what would have been expected for the property's size.  This got me thinking about some of the creative ways I've seen investors increase their NOI, and I've listed some of these below: Parking: Investors with excess parking will often rent the additional spaces to neighboring property owners. Renting Roof Space: It's very common for investors to rent roof space for cell phone towers or solar panels.  There is also a trend towards renting roof space for greenhouses as w... 01/17/2011

What is the bare minimum that your agent or broker should be doing to sell your investment real estate?  I was showing small investment properties all day today in Reading, PA.  I was with an investor that I have worked with quite a bit, and we started discussing the range of information that we were provided by the different agents.  For some of the properties we were given income and expenses and end dates for existing leases, at others we were given just the rental rates, and at some we weren't given any figures at all.  Keep in mind that when buying investment properties, most investors are primarily concerned with the numbers.  Not providing all of the numbers is like trying to sell a house, but only showing half of the rooms.  How is my investor supposed to make an educated purcha... 01/15/2011

Really? Nobody invests in industrial property?  That's what I heard.  I was speaking with another investor today.  He is someone I consider quite knowledgeable about commercial real estate in general, but as we were discussing a potential investment he made the comment that, "Nobody invests in industrial property".  He went on to say that only owner users invest in industrial properties.  Well clearly my friend has been misinformed, but I'm guessing that if this experienced investor believed this, that many other people believe this too.  Of course many industrial properties are bought by owner-users, but several are also owned by investors.  I happen to have one client who owns over 40 industrial properties. I think the confusion may start with a misunderstanding of what actually quali... 01/13/2011

I read a blog post on activerain.com today that really bothered me.  I'm not going to link to the post, because it is one of several that I have seen.  The author was an agent that was bashing the use of creative financing.  He stated that these techniques don't work and that the people using them are tire-kickers and dreamers.  What was more surprising was that there were pages of comments from other agents and brokers that agreed and said that they don' twork with 'those types' of clients.  I will admit that there are a lot of people out there that have read a real estate book they bought off of a late night infomercial, that have no idea what they are doing, and may never buy a property.  However, there are also several successful real estate investors that buy properties with none o... 01/12/2011