Commercial Real Estate: What Kind of Investor Are You?

So you’ve decided that your calling in life lies in investing in commercial real estate properties—and make money out of it. Great; we’re happy for you. But to be a successful commercial property investor, you need to find what kind of investor you are.

Commercial real estate investors come in different shapes and sizes; however, they can all be divided into three basic categories:

       i. Wealth preservation investors

     ii. Income investors

   iii. Value-added investors

Wealth preservation investors have one goal and that is to maintain their wealth. These investors have a lot of money, and they’re not afraid to spend it. That said, they don’t want to lose their money either, and therefore, prefer safe and secure investments.

For wealth preservation investors, income from properties is not that important; they just want to make sure that the property they invest in, retains its value, and can be passed down to their future generations.

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Then we have income investors.

Income investors typically come from busy lifestyles. They usually already have a primary income stream and turn to commercial real estate investments to add a secondary cash flow to their income portfolio.

Income investors generally invest in a property, and then hire a management company to manage their property for them. Like wealth preservation investors, they are risk averse in nature because they don’t want to lose their hard-earned money.

For them, income from properties matters as their livelihood depends on it.

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Last but not least, we have value-added investors.

Value-added investors typically prefer short to medium term investments. They want to make quick money and then exit. These investors usually have some prior real estate investment experience, mostly in the residential property market. Adaptive reuse projects are their forte.

Because value-added investors want quick returns on their investment, they often have to take risks that wealth preservation and income investors may not be open to entertaining.

So what type of commercial real estate investor are you?

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This article was posted by GCP Fund.

About GCP Fund

GCP Fund is a leading national hard money/bridge loan lender headquartered in New York. The company provides a complete range of hard money loan products to clients across the country, including but not limited to: New York, Utah, Colorado, Texas, Nevada and California. For more details, please call 1-800-514-7350 or email at contact@gcpfund.com

 

Categories: Real Estate

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