| Commercial real estate ventures are often | | | | your accountant. Those that deal with high |
| very expensive and require multiple sources | | | | net worth individuals may be working with |
| of funding. Typically, about 70% of the | | | | clients that are in need of a tax write-off - |
| project can be financed with long-term loans, | | | | something that real estate investment can |
| but the remaining 20% (accounting for 10% of | | | | offer. Other financial professions may also |
| your own equity) must be financed with | | | | be able to offer referrals. |
| outside equity. The investors providing this | | | | |
| equity can be difficult and expensive to find | | | | Another source of equity is the seller. Those |
| at times. | | | | that are selling existing buildings may be |
| | | | interested in becoming minority owners while |
| Commercial real estate ventures offer three | | | | those selling land may be able to offer |
| things to equity investors. First, investors | | | | similar terms. Another thing to consider for |
| are entitled to receive a portion of the net | | | | land owners is a land lease over 100 or more |
| operating income from the project through a | | | | years. This option saves you immediate money |
| dividend. Secondly, investors are entitled to | | | | up-front and can lessen the amount of money |
| their share of the profit when the commercial | | | | that you need to borrow and raise. |
| real estate is sold. And finally, investors | | | | |
| are entitled to a portion of the tax | | | | The last resort is a broker, who can cold |
| write-offs associated with the real estate | | | | call their clients until they create a |
| project - namely, the interest payments. | | | | suitable list. Unfortunately, they charge a |
| | | | hefty fee, so this should be used as a last |
| Now, all of these may seem like great | | | | resort. In the end, it can be extremely hard |
| reasons, but it can still be hard to find | | | | to find suitable investors, but there are |
| investors willing to jump on board. One of | | | | several sources to check before laying out |
| the best ways to find investors is to talk to | | | | the cash for an expensive broker! |