Commercial real estate investors heavily rely on the work of construction companies. Sadly, corruption within the construction industry is costing investors millions of dollars each year. Learn how you can mitigate against such issues during your next real estate transaction, and discover how the aid of a competent real estate attorney can save you both time and money.

Construction Corruption is Rampant in CRE Development 

One would like to believe that the stories of corruption are one-offs, rarities that can be easily avoided. Unfortunately, nothing could be further from the truth. Corruption in form of bribery, larceny, extortion, grafting, and bid-rigging are rampant in the construction industry, and CRE developers are some of the most heavily impacted victims. If hit severely or frequently enough, corruption could have a permeant and catastrophic effect on a developer's bottom line.

With autonomous cars becoming more commonplace, experts are now saying that it is no longer a matter of "if" the commercial real estate market will be impacted, but "when." Smart investors know that means they need to start planning now - before the future arrives. Learn more about how you can stay ahead of the trend of driverless cars, and discover how the assistance of a seasoned commercial real estate lawyer can help you mitigate against the potential issues that may arise along the way.

Autonomous Cars and CRE Development 

To be successful as a CRE developer, one needs to stay ahead of the trends, but autonomous cars are not just a trend; they are becoming a way of life. The government believes they have the ability to reduce the number of traffic fatalities that America experiences each year, so they are pushing to have more cars developed and tested. People and businesses are responding, en mass. In fact, rideshare companies are already using autonomous cars to increase their profit margin. Countless others are hoping to follow suit.

During the U.S. economy crash of 2018, financially savvy investors jumped into the real estate market. Many started out in residential properties, which were being repossessed at an unprecedented rate. Most of the properties were distressed, but substantial profits were still made. Now, with climbing rates and other indicators of market shifts, residential investors are being encouraged to expand their portfolios. One sector worth considering is the commercial real estate (CRE) market. Learn why, and discover how an experienced real estate attorney can minimize you minimize the potential risks in the following sections.

Why Commercial Real Estate?

With the possibility of turbulent markets ahead, investors are encouraged to add more stable equity to their portfolios. Commercial real estate typically offers a better risk-return profile than other real estate sectors. For example, the absolute return on CRE backed by private debt (secured debt with a collateral contingency) ranges between 6 and 12 percent. Additionally, this sector does not experience the same daily swings as other markets. Use of collateral in a commercial real estate transaction can also minimize the risk of a default, and it ensures there is an asset safety net, should default, or a decline in the market occur.

To be successful as a real estate investor, you need a vision. More importantly, you need to be willing to change your vision, according to the market trends. For example, you may have started out as an investor who buys and flips houses, but the trends show that such investors are making smaller returns. As such, you may need to expand your portfolio into another market (i.e. commercial real estate or residential rental properties).

Where you invest is also important. After all, it does little good for one to invest in areas that are distressed or declining. To help you find direction, the Forbes Real Estate Council recently revealed which market areas are expected to boom in 2018. Furthermore, you shall learn how the aid of a seasoned real estate attorney can help guide your investment choices for the future.

Major Metro Areas in the United States

After the recession, banks tightened their lending requirements for all borrowers. Individuals in the commercial real estate market took the hardest hit. Several institutions stopped offering lending options to CRE investors altogether, and all remaining lenders were bound by federal regulations. Of particular concern was the requirement that all CRE transactions valued at $250,000 or higher had to be valued by an independent third-party. Thankfully, the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) has recently relaxed this requirement. Learn why this matters and how it could give you the freedom you need to expand your investment portfolio in the following sections.

Relaxed Lending and Your Investment Portfolio

Lending requirements are designed to protect lenders, not investors. Likewise, when lending requirements are relaxed, it is the investors who stand to profit. Under the current changes, investors can expect to experience fewer delays when seeking funding for smaller investment properties (those valued at under $500,000), and they will no longer be required to pay for the third-party valuation that was previously imposed on such transactions. The benefit of this is obvious: lenders can save money on smaller investments, and they can obtain funding a little sooner, which can aid them in growing their portfolio at a faster rate.