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.
...