YOU BUY COMMERCIAL REAL ESTATE FOR CASH FLOW…

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PART III…

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I will keep reminding you of the basic principle of why you buy commercial real estate over and over again because I will touch on a lot of different topics, but the basic principle of purchasing commercial real estate for cash flow, appreciation, income tax benefits, and other benefits has to remain in the forefront of your thinking. You will purchase certain types of commercial real estate for a combination of these benefits.

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The NNN Lease, or Triple Net Lease, is the safest form of real estate investing with the lowest risk but with an extremely modest return.? Moving up the ladder, you encounter Self-Storage Facilities.? Self-storage facilities are a relatively new phenomenon, and they haven’t been around as long as apartment buildings, shopping centers, NNN leases, or just about any other form of commercial real estate.? The cash flow that self-storage facilities generate for the owner/investor is amazing.? There are very few businesses that generate the amount of cash flow of self-storage facilities.? Remember that I was a practicing Certified Public Accountant for over 50 years, and I prepared so many financial statements and income tax returns, and I have only seen a handful of businesses that generate that kind of cash flow.?

Self-storage facilities are also much less expensive and take less time to build than apartment buildings. There are also some very creative ways to build a self-storage facility that will really maximize your Bonus Depreciation, saving you a lot—I mean a lot—in income taxes!!!

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Self-storage facilities are also very easy to run.? You do not have to be in the same geographic location as the facility; everything can be automated.? Every time someone opens the main gate, your phone gives you a ping, and the same for every time they leave and every time they pay the rent or a door is open to a garage.? You could be in Los Angeles and own a self-storage facility in South Carolina, and everything is done on the computer for you, including generating monthly profit and loss statements and annual reports so you can prepare income tax returns at the end of the year.

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You might want a part-time manager on site to sell packing and shipping supplies, handle repairs and maintenance, and clean the property regularly.

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Self-storage facilities raise a few major income tax questions, and we will touch on at least some of them tomorrow.

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Suffice it to say that the care facilities that we will be discussing later in this program have a cash flow that is second to none.

Have a wonderful weekend, and we will continue our journey of investing in real estate next week!!!