YOU BUY COMMERCIAL REAL ESTATE FOR APPRECIATION…

YOU BUY COMMERCIAL REAL ESTATE FOR APPRECIATION…

PART I…

I have actually been working very hard on this article for days and taking different approaches as to how to start my discussion of buying real estate for the appreciation that you get from owning different types of commercial real estate. First, let’s define “COMMERCIAL REAL ESTATE”. For this purpose and that’s any building, edifice, that is not a single-family home and that generates income or uses income tax dollars to support that building that supports the NEIGHBORHOOD. When I talk about supporting the neighborhood I am talking about the fire station or the police station or schools that support the community and are an integral part of any community or neighborhood.

Now, although a fire station or a police station does not “sell anything” they are the consumers of the neighborhood. The firemen are there for a very specific purpose, to protect the residents of the community from dangerous situations. But they are also consumers of goods and services in the community. The firemen purchase groceries and goods and services in the neighborhood to cook their food and stay at the fire station for as long as their shifts last so that the neighborhood is always protected. The policemen and women do not necessarily cook for themselves out of the police stations or precincts but they purchase the goods and services that they need to sustain themselves while they are on duty.

And then police and firemen need trucks and different vehicles to do their jobs and those vehicles have to be maintained and have to use gasoline or natural gas to get from one emergency to another. And then the people who provide all of these goods and services need a place to live and shop and need doctors and hospitals and those people need a place to live be it an apartment building or single-family homes.

What I have actually done is built the community or neighborhood from the inside out and my initial approach was to build my model from the outside by looking at a field and imagining building apartment buildings and then single-family homes and then stores and then the services and the hospital and the police and firemen and women. So, I guess that you can start building that community from the outside in or from the inside out and it doesn’t really matter because some communities grow out and some grow in and that would depend if the outlying city created the community or if the community created the town and the city.

But either way, you are going to have growth and that growth will result in buildings that will appreciate in value and build wealth for the individuals that own the property. I am not sure how you would classify the public buildings, the ones that I’ve already described, or the schools and the libraries, but as the community grows and becomes a living entity you need all of these things. And, being an ALL AMERICAN MALE you have to have the sports stadiums and sports teams that bring along with them loyalty and the sale of products and services to support your favorite University teams, NOTRE DAME for example, or the professional teams like the Kansas City Chiefs.

I am really interested to see how this model grows because I can talk about cash flow and income tax benefits all day long for seven days a week because of my accounting and building background but, how do you build a neighborhood or a town or a city. Did the University of North Dakota create the goods and services needed by the students of Boise, ID or did the city need a university with a blue football field???

We are all going to see how we build these neighborhoods and we are going to learn together I will want your input because I do not have a degree in city planning, my cousin did but he’s gone now, and I guess the question, the age-old question of which came first, the chicken or the egg, has come back to haunt us!!!

My name is Paul Levine, and I am a Commercial Realtor, a Residential Realtor of luxury homes in Southern California, a Real Estate Advisor, an Investment Advisor, and an Income Tax Consultant!!! I hope that you enjoyed this article.