Commercial Property Flipping

Whew, it’s day #5 in the New Year already! Hard to believe.

Letting your subconcious to sit idle is like throwing cash in the toilet. Have you ever noticed how you start attracting opportunities into your life, once you set your subconscious mind in motion and working for you?

I’m on audio CD #6 of my review of Dave Lindahl Commercial Property Investing system …and loving it.

Already started playing with his Commercial property evaluation software, have plugged in a couple of large apartment complexes that were sent to me. One is 260 units in Jackson, MS and another one is 330 units in Orlando, FL (both REOs from banks).

Just got another deal to look at – a 10 story office building in Maryland, also bank owned.

I got to confess, playing “what if” scenarios on these large deals is lots of fun.

For example, on a 300 units apartment property, if you rent up ONLY 5% of the vacant units (say 15 units),  here’s what the numbers look like:

15 units X $600/month X 12 Months = $108,000/year in extra cashflow.

This translates in a property value increase of:

 $108,000 X 10 = $1,080,000

How cool is that… Just by leasing up 15 vacant units you can create a million dollar value increase in your property.

The strangest thing I’m discovering with these commercial REO properties is – most of them have a receiver appointed by the bank in charge of managing the property until it’s sold and converted back into cash for the bank.

Now, the receiver clearly doesn’t have the right mindset for keeping the property well maintained and attending to tenants’ needs. As a result, the typical picture is – tenants have been unhappy, the vacancies have grown steadily and surely.

Yet with the professional property management company in place committed to servicing  tenants, the vacant units could be leased up to the average for the area occupancy level. That level is often quite a bit higher than the actual occupancy under the bank appointed receiver.

Therefore you have a chance to see this kind of MASSIVE value gain as in the example above in a fairly short period of time, even with small improvements in management.

If you don’t know what the heck I’m talking about, check out the recording of the Dave Lindahl commercial property crises investing webinar.

Happy  bargain hunting!

-Alex
P.S. If you’re an accredited investor looking to place your money in a project with a big upside like this, shoot me an email to alex (at) getrichlazy.com. Through a few key  industry  connections I’m getting deals like these referred to me even before they hit the market.

Hancock Tower in Boston, the tallest building in New England, has sold for $1.3 billion at the  height of the real estate market several years ago.

It later ended up in foreclosure and was bought by an investor for $660 millions. That’s about 50% less than the prior sale.

Recently, within a year and a half, the same building  re-sold for $990 millions.

Yes, an astute investor “flipped” this property for a quick $330 million profit in a year and a half time.

Ok, reality check… It’s highly unlikely you’ll play on that scale anytime soon unless you’re already buying and selling huge commercial buildings.

However, with some training on how to:

1. Recognize the right opportunities

2. Tie them up on a contract at wholesale price

3. Attract partners with money to fund the deals  and PAY YOU a high 5 to low 6 figures for finding and  making them available…

… You too could be playing EXACTLY the same flipping game with commercial buildings. The timid beginners could start with small commercial buildings in the range of half a million. Those who have some experience or just can psych themselves to think bigger numbers could be tying up commercial real estate up  to 20 million in prices.

These building are making their ways through the pipelines of commercial property crises as we speak.

With over 700 banks currently in danger of being closed by federal regulators because of “toxic” (read, upside down) commercial property loans on their books,  the massive wholesale buying opportunities in commercial real estate will not likely repeat for the next 20-40 years.

Watch a recording of my webinar on how to profit from today’s opportunities with Dave Lindahl commercial real estate investing. See how the Dave created allow his students to generate the kind of paydays flipping commercial buildings that most people don’t make in a whole year working for somebody else.

A new year is just around the corner. 2011 is going to be quite different for those who get involved in risk-free commercial property flipping using other people’s money.

 Why not you?

Here’s the page with the webinar recording: Dave Lindahl commercial property system

Every year when December rolls around I take some time off to review the current industry trends and try to uncover BIG “up and coming” opportunities for the next year or two.

And many of my Real Estate Magic ezine subscribers take notice and profit from these end of year tips. In 2003, when the market was picking up, I was teaching how to buy pre foreclosures and how to be first in front of the homeowner in default.

In 2004 I was teaching investors how to sell quick turn houses with lease options and owner financing to ride the wave of increasing property values to quickly build massive monthly cash flow. Those who listened, did extremely well for themselves and skyrocketed their profits with houses producing $500-800/mo in NET cash flow after payments and expenses.

In 2005, at the peak of the real estate market, I was the first to talk about the impending tsunami of foreclosures we were soon to see. I also introduced to real estate investors the “loan modification” avenue for tackling pre foreclosures to successfully compete against the rest of the market chasing owner in default.

In 2006-2008 I was telling my subscribers to get loaded on cash from private money lenders and get ready for buying REOs. Those who proactively worked on developing their private money sources made lots of money since.

Well, here we are at the end of 2010. Some investors (you too?) will be smart to listen to my advice again.
Want to know what I think the biggest trend for the next 2 years is going to be and where you can get wealthy in a relatively short period of time? It’s (drum roll)…

Commercial Real Estate Tsunami!

Around 2005-2007, at the height of real estate markets, lots of commercial properties changed hands. Most of the purchases at the time were financed with short term loans that were supposed to be refinanced by the new property owners within 3-7 years. Does this remind you our residential markets 5 years ago? You bet.

Take a look at these numbers. Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms. Nearly half are at present “underwater”. That simply means, the borrower owes more than the underlying property is currently worth. Commercial property values have fallen more than 40 percent since the beginning of 2007.

No Commercial Mortgage Refinancing Sources

Now that the financing markets collapsed, there is NO commercial mortgage money available to replace all the trillions of dollars in loans that have recently come due, or will be coming due in the next year or two.

The information from trusted government sources was released recently indicating that as many as 700 US banks are running a serious risk of being closed by regulators.The reason? Non-performing commercial real estate loans. And a lot MORE of them are in the pipeline.

Second Bailout Is Out of The Question

And since the government has already spent 700 billions on bailing out our residential markets, there will be NO tax payers money available to bail out banks overloaded with both – bad commercial loans and foreclosed commercial properties on their books.

Once FDIC closes the troubled banks and places them into receivership, the old fashion liquidation process will have to be used to convert these loans and commercial REOs back into cash for depositors. Most of these assets will be sold off through the auctions to the highest bidder.

The bad news is these commercial properties are pricey beasts and there is no easy financing for them. They are far beyond financial reach of an average single family home investor. But there is good news too.

Foreign Investors Are Gearing To Buy US Distressed Commercial Properties

First, turns out US commercial real estate markets are perceived to have a great recovery potential over time…. by foreign investors! The US commercial real estate markets are of great interest to foreign investors who are loaded with massive amounts of EUROs and are looking to place them in larger US apartment complexes, retails centers, and other commercial assets.

While they have the money to invest, they don’t always have the eyes locally to scout the bargain properties. And with potential profits in millions and even tens of millions on larger properties, these foreign investors don’t mind compensating knowledgeable real estate investors who can lead them to commercial deals at big discounts. They’ll pay with lump some cash upfront in “acquisition fees”, as well as equity and cash flow participation in the project.

How Small Investor Can Get Paid On Big Deals

On these large commercial deals, the acquisition fees start in at $50,000 or more… paid to you at closing. Add to this built-in cashflow almost from day #1, and equity you’ll realize when the property is sold eventually… and you can see how it is pretty smart to learn all you can about how to find and evaluate these big commercial properties.

Developing at least some expertise in this area quickly is how a small fish could get involved in a game with big stakes without strong financials, cash, credit or monster size liabilities for multi-million dollar real estate loans.

Free Upcoming Commercial Property Training Class

I’ll be interviewing one of country’s leading authorities on this commercial properties strategy. This man happens to control almost a quarter Billion dollars (yes, billion with the “B”) worth of these commercial deals. Today even he is finding it difficult to keep up with the demand for great properties from foreign investors.

He will show you how you can get involved in this market and go from nothing to big chunks of cash and equity by working with big, cash rich investors hungry for commercial deals in the US.

Use this link to register for the webinar  dave lindahl commercial real estate investing.