Report Why You Should Become an Owner of Commercial Real Estate

Introduction
Thanks for downloading my special report – you’re in for a real treat.
Before I go over the ...

“Why You Should Be An Owner of
A Commercial
Investment Property”
I’d like to back up and cover the basics of why you should be looking at commercial real
estate in the ﬁrst place.
There are a lot of places you can invest these days, and you should know the reasons
WHY before you move forward.
Even if you’re doing a “No Money Down” deal, you’re going to be investing time and energy
into the project, and you will be a whole lot better off if you are made aware of the 7 Most
Common Mistakes Investors Make When They Buy a Commercial Income
Property .....
.... Let’s get started.

“Why You Should Be An Owner of An
Apartment Building Or Commercial
Investment Property”
By Paul Forsberg, Investor/Broker

Let’s be honest with each other for a minute.
If I was a stockbroker I would tell you all of the reasons you need to buy stocks.
If I was a bond broker, I would tell you all of the reasons you need to be in bonds.
If I was in annuities, I would tell you all of the reasons you need to be in annuities.
Get the picture? Everyone loves “their investment” especially if they make money in the
form of fees or commissions by having you buy it.

Page 1
Copyright Paul Forsberg 2013 Reprint permission contact Paul@FLCRES.com
www.FloridaCommercialRealEstateServices.com
2485 Jen Dr. #1 Melbourne, FL 32940 (321) 300-6123

I have been a real estate owner and investor since
1988.
In 1999, I upped my game and began developing,
brokering real estate in one of the most affluent
places in the country. East Hampton, NY. aka: “The
Hampton's.”

There are 3 types of people in real
estate
1) Flippers
2) Traders
3) Investors
Flippers have a job and need to work
every day
Traders jump from one deal to
another - all based on yield
Investors, on the other hand are in it
for the long haul. They take along
term view - they own real estate
because it pays them monthly and
gives them HUGE tax advantages.

I have developed, built, brokered, advised and
worked with some of the most affluent people in the
world. Being an admirer of the affluent, I like to ask
a lot of questions on their successes and do my
best to learn from them. (you
would
be
amazed
at
the

information
people
will
share
with
you
if
you
simply

ask
them
how
they
did
what
they
did.
It
is
also
an

amazing
sales
strategy.
People
always
ask
the
wealthy
FOR
something
-‐
I
learned
early
on
never

ask
FOR
-‐
only
ask
HOW,
and
then
shut
up
and
listen!) I have seen what riches and tax
advantages are produced from the people who own commercial real estate investments.
And let me tell you this: NOTHING, and I mean NOTHING compares.
Personally, I have made and lost millions on Real Estate, and I can tell you from personal
experience, the biggest mistake I made was selling the boring income producing real estate
I owned. (I
went
from
an
Investor
to
a
Flipper
and
Trader
-‐
BIG
Mistake)
The

stuff
that paid me monthly to own it, the stuff that pumped out monthly cash flow and I sold to to
raise more cash so I could buy and sell homes and vacant land for the big hits.
Well, when the real estate market corrected, my plan stopped working and I had no more
income producing real estate.
A HUGE mistake which I am now correcting and investing every single spare minute of my
day, and penny I make into acquiring commercial income properties.

Some of you reading this prefer apartment buildings, others strip centers, self storage
facilities, retail stores, medical buildings, or professional buildings.
Page 2

Commercial Income property share one thing in common:
They Produce Income And The Value Is Based On The Net Income Produced.
Bottom line .... Owning a commercial investment property will grow your wealth
exponentially.
Please follow what I said here because it is super important.
Apartments and commercial investment property are like three or four investments wrapped
up in one – all working together at the same time.

Real Quick, lets take a look at and compare a real estate investment with a stock.
Let’s say I buy 100 shares of ABC Corporation at $1.00 per share.
So, I have $100 invested into ABC Corporation. $1.00 X 100 shares owned = $100.
Five years later, if the market was good, let’s say that my $1.00 per share is now worth
$1.50 per share. My $100 investment is now worth $150.00. I have made a 50% return on
my money over the 5 years or a 10% annual return.
Not too bad.
Now, if I sell I will obviously proﬁt and have to pay capital gains taxes to Uncle Sam, not to
mention some state taxes as well (depending where you live).
So, all that really happened here is that my investment appreciated and I paid capital gains
taxes when it sold. This is purely an appreciation and capital gains type of investment. My
overall return in this example, will be less than 10% after taxes. Now, this may still appeal to
you, but… can I ask you why? All you need is a slight change in public opinion or negative
media exposure and your stock price could plummet. Add in the political climate of today
and your could end up losing your investment all together. (It happened to me - I had a
stock worth $12 that went to $16, and almost overnight dropped to 16 cents!)
The problem is most investments are just like this in one way or another. There is just one
engine working for you here. Capital appreciation. And, unfortunately, some of that proﬁt will
have to be paid in taxes. Or worse ..... That is the way it is.

Now, let’s look at this stock like you would say a small strip center in the middle of town.
We will call our commercial property XYZ Company.
OK.
Now, let’s say I put the same amount of money in the XYZ Company - $100 – but this time I
am also going to get a loan from my bank for another $100 too. So, let’s say I put $100 of
my money into the commercial property AND borrow another $100 from my bank. Now, I
have $200 to work with but remember, $100 is my money and the other $100 is the banks
money.
So, I have now purchased 200 “shares” of XYZ Company ($200 X $1.00 per share) but I still
have only $100 of my own money in it and the other hundred was borrowed. I now control
Page 3

double the shares, 200, with the same amount of money out of my pocket, $100.
Remember the other $100 is the banks money, not mine.
So now I own twice the “stock” for the same investment out of pocket.
Now, let’s say while I own this “stock” it appreciates at the same rate as before, 10% per
annum for five years. In five years XYZ Company is worth $150.00 per share.
But over the five years let’s say that XYZ Company ALSO decided out of the kindness of the
company to also pay back the $100 I borrowed too. So, not only is my stock appreciating,
the company (not me!) is also paying off my additional $100 of debt I used to buy more
stock. So, my borrowed money was not paid back by me but by XYZ Company.
On top of that, when I file my tax return Uncle Sam is going to give me some nice large tax
breaks for owning XYZ Company. These tax breaks will reduce the income generated by
XYZ Company. Even though I am profiting every year from XYZ Company, I can use legal
tax saving strategies to in some years show a loss from XYZ Company. I can do this even
though it made money year after year.
Lastly, when it comes time to sell, Uncle Sam decides to give me break. He tells me that
when I sell XYZ Company stock I do not have to pay any capital gains taxes as long as I
buy stock in another company. I can sell, keep my profit and legally defer any capital
gains taxes.
Also, remember, I own double the shares and the Company paid back the money I
borrowed to purchase those shares.
Now, which investment would you take if you had to choose?? ABC Corporation or XYZ
Company?
I hope it’s obvious.
That is how commercial investment real estate properties work in my world. I hope my stock
analogy brings this home for you. I just want you to get the concept of how this can
exponentially grow your wealth vs. the traditional way.
And... Like I mentioned before ...... the single thing al the super wealthy people I met in in
the “Hampton's” shared the same investment philosophies and in some cases, share in
ownership of others.

Page 4

Factor these costs in to your operating statements to give you a TRUE idea of how the
property will cash ﬂow. The lenders and appraisers will do this – why shouldn’t you?
OK…So now you have a better idea of how you can literally save a ton of money when you
Buy an Apartment Building or Property.
It can be tough out there, especially when buying – and I don’t want to see you get taken for
a ride. This report is a great start on your road to true wealth and independence.

All the BestPaul Forsberg
Commercial Real Estate Specialist

Page 5

Report Why You Should Become an Owner of Commercial Real Estate

Recommended

Recommended

More Related Content

Recently uploaded

Recently uploaded (20)

Featured

Featured (20)

Report Why You Should Become an Owner of Commercial Real Estate