Point Acquisitions Blog
If you’re a commercial real estate investor looking to defer capital gains taxes, then you’ve probably heard about the benefits of a 1031 Exchange. However, to take advantage of this tax-deferral strategy, it’s essential to understand the 1031 exchange identification rules that come with it. In this blog, we’ll explore the key rules to identify replacement properties for a 1031 Exchange. From the number of potential properties you can identify to the reasonable market value restrictions, we’ll cover everything you need to know to ensure your 1031 Exchange goes smoothly and helps you achieve commercial real estate success. So, let’s…
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What is Disposition in Real Estate Disposition in real estate refers to selling, transferring, or disposing of an asset, typically a property. In other words, it’s the process of getting rid of a property and can include: Disposition is a crucial step in the real estate investment process because it determines the outcome of the investment. Importance of Disposition in Real Estate The importance of disposition in real estate cannot be overstated. It is the real estate investment stage where profits are realized or lost. Successful disposition of a property can lead to significant financial gain for the investor, while…
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If you’ve ever dreamed of investing in real estate but don’t have the deep pockets to finance a property, real estate syndication is the opportunity you’re looking for. By pooling funds with other investors, you can access larger, more lucrative real estate deals that would otherwise be out of reach. Essentially, a sponsor or syndicator finds the investment opportunity, manages the property, and ensures that it generates income and appreciation. Meanwhile, you and your fellow investors provide the necessary capital and receive a share of the potential profits. It sounds like a win-win! Real estate syndication investment can be a…
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If you want to purchase commercial real estate, seller financing might be just what you need. But what is seller financing? And how can it help you in your search for the perfect property? Let’s examine what seller financing is and how it works. What Does Seller financing Mean? Seller financing is when the seller of a property provides some or all of the funding to purchase that asset. The lender, in this case, is the seller, who uses their equity in the property as collateral for a loan they make to the buyer. This type of finance can be…
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As a commercial real estate seller or investor, you know that generating high returns is essential to your success. Understanding the Internal Rate of Return (IRR) concept is necessary. IRR is an important metric that helps you check the profitability of your commercial real estate investments. However, with different approaches to calculating IRR, it can be challenging to know which method is best suited for your investment strategy. In this post, we’ll explain the differences between levered vs. unlevered IRR and provide examples of how both methods can generate higher returns in commercial real estate investing. We’ll also discuss the…
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If you’re looking to invest in commercial real estate, securing financing is one of the most important steps you’ll need to take. Commercial real estate loans can be complex, and the requirements can vary depending on several factors, including the type of property you’re looking to purchase, credit history, income the property generates, and the lender you’re working with. There is in fact a laundry list of items, but understanding the ins and outs of commercial real estate loan requirements is critical to ensuring the ability to capitalize your investment successfully. This full guide will provide you with everything you…
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When appraising a property, many different methods can be used to come up with an accurate estimate of the value. The income approach appraisal is a commonly used method, and it considers the potential income that can be generated from the property. In this post, we’ll take a look at the income approach and why it’s so important. What Is the Income Approach? The income approach is one of the most commonly used methods for evaluating real estate investments. It involves analyzing potential cash flows to determine an asset’s or property’s present value. This approach requires a thorough understanding and…
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If you’ve ever looked into purchasing land or real estate. You’ve likely come across two complicated terms: ground lease vs fee simple. While both agreements involve the transfer of real estate from one party to another, there are key differences that you should be aware of before embarking on either. What is a Ground Lease? A ground lease is an agreement between a tenant and a landlord that grants exclusive possession of the property for an extended period. The tenant has exclusive rights to use and occupy the property for a specific purpose, such as operating a business or building…
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Estimating the value of a commercial real estate can be quite intricate compared to residential property as professionals use various methods for valuation. An exact value is essential to find deals other investors have bypassed and steer clear of investing in overpriced assets. In this competitive market knowing how to value commercial property is beneficial. Nailing down an accurate commercial real estate appraisal could give you the competitive edge needed to acquire a great deal. Why CRE Valuation is Important Real estate investments often hinge on the CRE investor’s calculated purchase price. Accurately pinpointing a commercial property’s fair market value…
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With careful planning and expert guidance, savvy investors can use a 1031 Exchange to defer their capital gains taxes despite purchasing new construction. While IRS guidelines forbid using funds from an exchange for building projects, this creative maneuver allows investors significant flexibility in directing assets towards various investments, even up to double the value of the original property with the 1031 exchange 200% rule! Let’s take a closer look at 1031 exchange for new construction and why they could benefit your investments. Can 1031 Exchange Funds Be Used For New Construction? Yes, 1031 Exchange Funds can be used for new…
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