Monday, October 20, 2014

Financing Your Next Commercial Property Investment

ReDev properties finance
There have been no better time than now to capitalize on the opportunities in Canada’s commercial real estate market. Values and demand are both trending up and interest rates remain low.
Here are some ideas to look at when analyzing gow to fund new investments in the current market.
Cash Purchases
Many Canadians are currently flush with cash or have cashed out other types of investments to help restructure and optimize their portfolios. Cash can be a great asset to have when capitalizing on attractive investment opportunities, as it enables investors to negotiate from a position of strength and achieve above average returns – all while retaining the benefits of a solid equity position.
It’s always wise to keep some cash on hand to retain liquidity and ensure diversification across your portfolio.
Commercial Mortgage Loans in Canada
Commercial mortgage capital appears to be freely available from global markets, especially for solid properties in Canada’s growing provinces and top cities.
Interest rates are low and capital markets are becoming increasingly aggressive. Terms may vary, but qualified investors with performing income producing properties shouldn’t have issues finding attractive long term mortgage financing.
Crowdfunding is increasingly becoming a preferred form of leverage and fundraising for commercial property in North America. Beyond access to low cost capital, crowdfunding offers many perks for investors. This includes visibility, as more individuals are invested in the success of the project.
The one catch here is that organizers must be prepared to compete in this blossoming space and understand the strategy and tactics required to stand out and attract contributors. This can demand significant marketing expertise and can often require a sizable upfront capital requirement.
Crowdfunding is simply a glitzy, technologically-fueled version of how sophisticated real estate investors have partnered together for decades.
Before rushing into launching a crowdfunding campaign, taking out a mortgage with a personal guarantee or funneling all of your available cash into a single commercial property, consider the advantages of partnering with others in a proven on your next commercial real estate investment in Canada.


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