CRE: Commercial Real Estate 101

One of the "things" about selling Commercial Real Estate (CRE) is that I get to talk to a lot of different people from different walks of life from around the world.

Some of these people come with a lot of baggage; they are wounded internally and sometimes it takes me months before I realize the extent of their troubled life. Others present themselves as if they are an open book. And they talk and talk and usually have very little to say.

But, the client that I like is the one who is more of an explorer. They are on an adventure rather than they just wandered into CRE investing. They know that CRE will payoff in time and they want to start slow and small -- price wise -- which is good most of the time.

They tend to ask for your help as you go along and they fear that they might embarrass themselves for NOT knowing simple information? It's at those moments you need to remind them: There is never a stupid question! Especially when it comes to CRE investing.

So, in order to resolve the anxiety any novice CRE investor may have, I would like to invite you to read the following information that is absolutely necessary for calculating the annual income from a marketed CRE Net Leased Investment Property that you may be considering acquiring for the annual income.

A lot of you are truly lay people. And, whether you are a famous celebrity or you are just exploring this as a novice investor, this might sound foreign to you.  Just rest assured that just because CRE is a new area for you, it still is something you can get involved in -- even if to spruce up your usually normal day.

So, let's begin:

Now net income is also known as passive income. It's the type of income you earn monthly or quarterly as a dividend or investment. The good thing about this is: You pay a smaller amount in Income Tax on this  money. ***Please check with you Tax Professional to verify this!!***

As you will figure out, the main goal of CRE is to allow you as an Investor, to earn a usually stable predetermine (estimated) annual net income (the rent you receive) from a Net Leased Property that is being marketed either by a Sales Price or a Cap Rate.

Usually, the marketing entity for the property will only disclose what the Listing or Asking Price is; and they will state that, that List or Asking Price is at a certain Percentage of Return on the Investment (ROI); or, as it is better known as: Capitalization Rate (Cap Rate).

Now, from just these two disclosures, you will be able to get an idea of just what the (estimated) annual income should be and whether or not the acquisition of this net leased property will "fit" your investment income needs -- or not.

The formula goes like this:

Sales Price times Cap Rate equals Annual Income.  (SP x CR = AI)

For example: $315,000 x 9.5% = $30,000.00+/-. I don't know about you, but I could use an extra $30,000 per year.  This could help pay for a parent's care or supplement a child's college fund.

And once you have the estimated Annual Investment Income from the Asking or Sales Price plus the additional disclosed Cap Rate, you can figure out your Purchase/Sales Price by dividing the Annual Income by a Cap Rate you desire to acquire the property at; OR by a Sales Price you deem as a fair market value.

You take the Annual Income you figured by the formula, and divide by the Sales Price you feel is a fair price or by the Cap Rate that you want as an ROI.

Either way, you can figure out from just two disclosed items the third item in such as you can for the Physics Traveling Formula: Rate times Time equals Distance (RxT=D).

So, this is just a basic formula.  The Actual Annual Income should be disclosed in the current owners Financial Statements kept for this particular investment property.  AND, during due diligence it is absolutely necessary to review those statements carefully when considering the acquisition of a Net Leased Property.  And, most Sellers will NOT disclose actual financials unless there is an accepted offer and escrow has been opened.

So, hopefully, this will help most of you who are not that experienced in acquiring income producing properties.  And, hopefully, you will be at ease when considering the next step in actually making a purchase move in that direction.

Now, take a look at the property information buttons in the right column.  Click on one and try the formula out to see if you can calculate an offer price or acquire the property at a higher Cap Rate!

Contacting David Howes is easy -- either by email: david AT davidhowes DOT net OR call me at: 70 25 01 93 88 AND you can Follow David on Twitter: @DavidAHowes

Las Vegas Resort Hotel Casinos For Sale II

A couple of years ago, I blogged that there were a few Resort Hotel Casino Properties For Sale. Now, I want to update you on this: There are Three For Sale and they are true Resort Hotel Casino Properties.

So, IF you have the prerequisite amount of money or financial capacity -- which means you are capable of paying $250 Million or more for a Resort Casino Hotel property -- send me an email with the proof of capacity. I will then reply with a Non-Circumvent, Confidentiality and Commission Agreement for your company's Authorized Officer's signature.

Once this Agreement is executed, I will then supply you the detailed information on the Resort Hotel Casino Property that "fits" your financial capacity and investment criteria.

The form can be down loaded from the column in the right under Las Vegas Casino Information.

Contacting David Howes is easy -- You can reach me at: davidATdavidhowesDOTnet OR call me at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

8% or Higher Cap Rates In Las Vegas? Sorry, Cap Rates are actually Going Down!

Last June 2014, I wrote this blog because I was being called by "out of state" investors wanting to acquire Las Vegas CRE at an 8% Cap Rate or better -- as one investor told me.

Well, it's been a year now and the Cap rates have actually 'Gone Down!'

This means, that the prices of CRE in Las Vegas are getting higher -- and other investors are buying these properties.

So, once again, I feel I have to re-address the issue:

For several years months now, I have been working with a couple of Buyers who are still searching the Las Vegas Valley for an 8% Cap Rate.

Unfortunately, for them, they are ALL gone.

The 8% Cap Rates went away about two a years ago when Owners began to realize they were getting multiple offers for their property and/or they no longer "needed" to sell.

But, Not all properties are in such a rosie position.  Several Owners that I know are still struggling to make their loan payments and are still upside down at the end of the month.

But, when you come to Las Vegas expecting a steal, and you find out that a 7.5% Cap Rate is the best you are going to do, then, you shouldn't be wasting my RE Broker's time.

Walgreen's across the US are going for +/-5.5% Cap Rate.  Here in Las Vegas you might be the high bidder at a 6.75% Cap Rate.  But, IF you think an 8% Cap Rate should do, you will be out of luck.  There are no Walgreen's in Las Vegas selling for an 8% Cap Rate.  AND, you are foolish to be thinking that for any property in Las Vegas right now.

IF you are truly interested in acquiring a Las Vegas NNN investment, then contact me and we'll start the search.  But, 7 or 7.5% is going to be the the best sales price.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

"There's nothing around it! The tenant is going to fail!"

Sigh!
Two weeks ago, I had a California Buyer who made an offer for a property with a fast food restaurant that was located just off I-215 on Jones Blvd.
It sits in an area between where there are a lot of office warehouse buildings and well built up neighborhood of SFRs.
And, there is a lot of vacant land in this area and most of it is owned by McCarran International Airport.
Now, Jones to and from the I-215 is a very, very busy street as it is the easiest way for workers who live in the neighborhood to the south to travel to work either on the 'Strip,' or to a business that is located near the 'Strip.'
The Buyer and Seller agree on a sales price. We open escrow. Then, -- not more than one hour AFTER opening escrow -- the Buyer calls me to demand I cancel escrow!  What?! Huh?! Ok.
It took me a week, but I finally found out that "a friend" of the Buyer had told him he had "looked" at an aerial map of the area and he determined that there was "nothing around the property but vacant land" so that meant to the friend "that the fast food restaurant was going to fail."
Apparently, this "friend" knows nothing to very little about Las Vegas.  BUT, his influence was great over the Buyer.
Since canceling Escrow, the property -- which had a lot of interest in it has SOLD to a Real Estate Broker, who flipped the property to another California investor.  The Broker acquired the property for $5.3 Million.  And, an hour after he closed escrow buying the property, he closes his second escrow to the investors for $5.8 Million.  Today, as I write this, is a Thursday two weeks before Christmas and I am still baffled that someone with little or no knowledge of a city or town in another state could have so much influence over a Buyer.
Even after I went over all of the "friends" objections with the Buyer, he wasn't going to go against his "friend."
Yes! This is absolutely absurd!
You see, the reason the fast food restaurant was placed there in the first place was because there is a severe lack of fast food in this area.  There are numerous businesses in this area that their employees had to -- and still do -- go OUT of the area to eat lunch, etc.  In other words, there is plenty of "Rooftops" and "Traffic" to support this fast food restaurant.
And, with McCarran International Airport owning most of the land, and with the recent economic meltdown developers have been hesitant to lease the land and build more buildings.  (This will iron out eventually.)
But a national fast food chain will be able to survive here because it is the only fast food in the area.
So, "friends" please keep your big, uneducated opinions to yourself.  Otherwise, you will cost your Buyer friend an opportunity to make money from a well placed National Credit Tenant NNN investment.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

Questions surround the future of the Fontainebleau

Questions surround the future of the Fontainebleau

A week or so ago, Paul Joncich, an anchor on Channel 8's NewsNow called to ask if I'd be willing to be interviewed about the (mostly) built Fontainebleau Resort here in Las Vegas, NV.

At first I was hesitant because I truly don't like the way I look or sound on camera.  But, after the wife told me to take my own advice of: "What other people think, is none of my business," I decided to go for it.
Anyway, click the link above for the news story.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88AND Follow David on Twitter: @DavidAHowes

Downtown Las Vegas Church to acquire Neighboring Property!

After almost a year of going to and fro, a Downtown Church has agreed to acquire it's neighboring property for $1.9 Million.

This church which sits on the NEC of Ogden and 9th will be increasing it's land footprint from .09 acres to .32 acres.  The neighboring property to the south has a +/-3,600 SF store front office building; and, the adjacent parcel to the west has two store front office buildings of about 1,100 SF.

Since most of the sales activity in this area has been completed by the Downtown Redevelopment Project, the church's impact would be minimal.  However, with the acquisition of these properties, the church will be able to service more of the homeless and indigent populous that are an earmark of this east Las Vegas area.  And, this increase in lot and building size will help the church provided better and more food services for the growing food recipients.

Hopefully, we will be able to close the sale by mid summer.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

The Seller's Downfall from Selling without a Real Estate Broker!

Just recently, a property owner emailed me to say he had SOLD! his commercial Property and he was proving to me he didn't need a Real Estate Broker.

I had in the past tried to get him to list his property with me. But, he knew better than me about what his property entailed. So, I said okay. But I really wanted to see what would happen.

This is always a bad move on an Owner's part. If you are NOT experienced in Real Estate, you will get taken advantaged of.

Even my own younger brother bragged to me a few years ago about: "How easy it was for him to get his real estate license." I then asked my brother, "So, how much money have you made selling real estate since getting your license?"

His answer: "None." And, it is None because he works as a Pharmacist. Unfortunately, he is just like the rest of Sellers: He truly thinks it would be easy to be his own real estate broker.

So, the owner from the above property who said he didn't need me, was bragging in his email about selling on his own property, said: he Sold for: "$800,000."

I asked: "Why did you sell it for so much less than what this very same buyer had already paid for similar properties in his area?"

He replied: "The Buyer had told him they were never going to pay what I had wanted them to pay" which was $200,000 more than what they paid for his property.

I said: "Of course, they are telling you that now. You accepted less! Of course, they are going to say, they wouldn't pay more than what I had gotten these very same Buyers to pay for other properties that were all around him. But, "You decided you didn't need me!"

He reiterated: "I wasn't needed." and "I was making it a bigger deal than it was." Well, it was a $200,000 bigger deal than he realized.

Anyway, I didn't want to pour lemon juice on his wound. IF he truly thinks he did a better job than me, fine. I will move forward knowing he screwed up big time. AND, he eventually will realize this, too.

So, want to sell your CRE property yourself? Go ahead. It's just that I make an honest living with a Real Estate Brokers license and I would never try to do your job just to cut you out of a financial gain for helping me. And, I do it with your best intentions in mind.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

In Order to Purchase Las Vegas Property, You Need to Know This One Secret!

Not everyone is privileged to be able to acquire an income property in Las Vegas. And, most investors will never know the true secret to acquiring a Las Vegas Investment property because they get caught up in the Large Real Estate Firm scenario.

And, unfortunately, they continue to fall victim to this every time because they don't realize that the Large Real Estate Firm is only interested in their own bottom-line.

I know this because I have worked for large real estate firms.

IF you truly want to acquire a Las Vegas Income Property, you need to contact me.  My goal is and will always be for the benefit of my client. (You!)

I have had "others" come to town, then get a hold of me and ask: "Can you show me properties that you don't have listed?"

My answer is an affirmative Yes!

If you come to Las Vegas and hire me to help you with a property purchase, and you see a property you want to acquire.  AND, it is NOT LISTED, I will do everything I can to contact the owner and see IF they will sell.  It's truly NOT that difficult.  It might take some time since most owners who get unsolicited calls, don't return those calls.  But, I will keep trying until I get an answer for you.

So,...

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

Warren Buffett's Long Term Advice about Investing in Real Estate

This is written by a person who follows his own advice about real estate investing. He ignores Political winds and focuses on the long term return on investment. Advice that has made him one of the riches men in the world.

http://finance.fortune.cnn.com/2014/02/24/warren-buffett-berkshire-letter/

(Copy and paste in your browser to read.)

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88
Follow David Howes on Twitter: @DavidAHowes

Solid NNN Investments in Las Vegas at 7% Cap Rate!

Since late last year, I have been dealing with several out of state investors searching for popular CRE Investments that they only want to buy at an 8% Cap Rate or higher.

What these investors are neglecting is that the owners here know they have CRE investments worth at least a 7% Cap Rate.

AND, they will NOT sell for higher than that.

So, investors, please take it as the TRUTH that a 7% Cap Rate is a very good investment in Las Vegas whether you believe it or not. Sure. There have been some property acquisitions here at a price that translates to a higher Cap Rate. BUT, most of those have been for properties that went into foreclosure: AND, the banks were tired of maintaining them through the years.

AND, when you have a property with one of the largest gaming companies as a tenant that is guaranteeing the lease through the initial term, you should be jumping on this band wagon and start collecting the annual rents.

One particular property that has had investors turn their nose up at does exactly this. AND, not many Credit Tenants would be willing to do that, either.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88

Chinese Millionaires Fleeing China

On CNBC's web site, there is a report of Chinese Millionaires fleeing China because the economy is so bad there.

I have placed a link below so that you can read the report first hand.

http://www.cnbc.com/id/101388620

My suggestion to these fleeing millionaires is to please consider Las Vegas, NV as a place to invest in.  With Las Vegas recovering from the 2008 economic collapse and values beginning to increase, now is the time to take advantage of Las Vegas properties.

So, IF you have any questions about investing in Las Vegas real estate, send me an email and I will reply as quickly as possible.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88

Downtown Las Vegas is Transforming! Get Involved Now or Miss out!

This past weekend was the "Life Is Beautiful" event that had Downtown Las Vegas full of young dreamers and believers!

Here is the Las Vegas Suns' Katz Report describing the event, the change and its destined forward direction of this area.

http://www.lasvegassun.com/blogs/kats-report/2013/oct/27/life-beautiful-throws-open-door-new-downtown-las-v/

And, here is a Las Vegas Review Journal article about the Then and Now of Downtown Las Vegas!

http://www.reviewjournal.com/news/downtown

Please enjoy!  Then, get together with your investor friends and call me about acquiring property in this area to redevelop along side Tony!

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR call 70 25 01 93 88

Club Owners, Chefs and Restaurateurs Looking at Opening a Restaurant in Downtown Las Vegas?! I have Four Properties!

Earlier this month I received a call from an associate real estate agent who has a client looking for sites in downtown Las Vegas to open their restaurant concept. She has a client who owns and operates restaurants who wants to be in a specific area of Downtown.

I sent her ALL the sites I have listed.  Fortunately, I have two properties in this area she is looking at Listed For Sale.

This got me wondering about ALL the things happening in Downtown where Tony Hsieh's Zappos Company is currently moving into the old Las Vegas City Hall building. He is attracting a lot of attention. And, it makes me wonder IF these business people who are following this are truly interested in moving into the downtown east area OR are they thinking of being in a casino along the Fremont Street Experience.  My immediate concern is: will they have enough foot traffic to succeed at the Downtown east locations?

From my perspective, more roof tops or housing is needed.

Tony's crew, lately, has been acquiring property at what I believe is below the normal or median price for this area.  I have advised my sellers to NOT ask too much IF they truly want to sell; rather ask for just more than the norm and under NO circumstance will I allow them to sell to the flippers.

Hopefully, with this inquiry to you today, we may see more activity in the coming months.

AND - just so you know - the area of the Downtown Redevelopment Project is east of Las Vegas Blvd; US 95 south to Charleston; and Las Vegas Blvd to Maryland Pkwy.  Of course, Tony's crew has bought property outside of this area, so anything could happen.

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR call 70 25 01 93 88

Only One +/-8% Cap Rate Left for Las Vegas CRE Investment Property!

About a two weeks ago, I notified you blog readers that there were Two 8% Cap Rate properties available here in Las Vegas. These have credit tenant's on long term leases.

Unfortunately, there is only One left! And, that one (should) will be gone (hopefully) by Friday.

Most of you will NOT be able to acquire this because of the $3 Million price range.  But, those of you who have verifiable funds, should contact me today.

Because, those of you who will qualify, it pays an annual rent of +/-$250,000.00 -- which is more than enough money to help you maintain your life style which you have become accustomed too.

And, the first investor (out of this group of readers with verifiable funds) will have the opportunity to acquire this property today.

This is NOT a teaser. The property is leased long term by a regional restaurant company; and it is in a higher than normal income neighborhood.  And because of the strict zoning requirements, they are NOT going to give this location up!

So, IF interested, email me ASAP!

Las Vegas real estate is recovering quickly and acquiring a CRE property at an 8% Cap Rate is disappearing.

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR call 70 25 01 93 88!

Las Vegas Commercial Real Estate Market is Barking Loudly!

I spent a pleasant five days in San Francisco with my in-laws on Angel Island.  (Magnificent Place!)

And, I came to realize that the homes in Tiburon are way too old for the price that is being paid for them. (Yes. Some have a view of San Francisco across the bay.)

And since they are old and need so much money to repair and update them to today's electric standards, instead of buying that home with your money, buy a CRE property here in Las Vegas first -- so that will help you pay for the updates your desired home will need once you do buy.

I can find you a very, good CRE property in Las Vegas, that would aid in your attempt to live lavishly just north of San Francisco in a house built about 100 years ago.

Now, the house we stayed in was nice -- but really, really old -- as my daughter put it.

And, I know of one person who owns CRE property in Las Vegas that lives right in Tiburon, CA.

Now for the pitch: IF these Property owners are making money owning Las Vegas property, AND, they also make money just doing what they do, they are more than able to afford to spend as much money as they want fixing up their 100 year "old" home.

So, think about it. Las Vegas is like a barking dog: It's bark is worse than its bite!  So, step up, contact me and left me know how I can help you (at least try to) live lavishly in an old home north of San Francisco. OR, wherever you may be living.

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR 702-501-9388!

Las Vegas Resorts, Casinos, & Hotels For Sale!!

A lot of people search for Las Vegas Resorts, Hotels, and Casinos that are For Sale.

Most are "tire kickers."  But, unfortunately, some of these people searching may NOT possess the appropriate qualifications to own and operate such a prestigious property.

If you are one of the few, that have the money, time and experience to own and operate a Las Vegas Resort Gaming Property, you will want to click on the Las Vegas Casino Information button -- just to the right -- in the right hand column.

Now, there, you will find a: 'Non Circumvent, Confidentiality and Commission Agreement.'  This needs to be downloaded, filled out by your company's signatory, scanned back into your computer, and then emailed back to me.  You might as well provide to me -- upfront -- your proof of funds, too!

Once I have verified you are a qualified risk to own a Las Vegas, NV Resort property, I will either ask for additional information about you to clarify anything that may cause a "red flag;" or if I am able to verify your resort casino status quickly, I will forward the appropriate information on the property fits your qualifications and acquisition criteria.  You will, also, have to pass muster with the  Nevada Gaming Control Board as part of your financial ability to acquire a certain priced property.

Currently, there are several unrestricted gaming properties available for +/-$25 Million and up!  I know of one unrestricted gaming (Off Strip) property for sale that the owner told me he wants $5 Million to sell; and, then there is the big leap.  One resort property available with a +/-60,000 SF casino can be acquired for +/-$250 Million!  And, then the others...  Well, since 99% of you will NOT qualify for this particular property, i will just keep that under my hat until the person who can afford this resort property comes forward.

AND, lastly, there are still several well priced "tavern" sports bar properties available that are also NNN Investment properties!  These will return +/-7% on your money.

Again, I appreciate your patience in this and I hope to be able to help bring you other Resort Properties in the near future.

For more Information about Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet; OR 702-501-9388! Thanks!

Las Vegas Resort Hotel Casino Buyers!

To make it easier for qualified persons or companies to obtain detailed information on which Las Vegas Resort Hotel Casinos that are For Sale, I have added an information button to the right column labeled Las Vegas Casino Information.

Click on it, print the form, have your authorized company signatory fill it out and sign, then scan and email it back to me.  Once I have verified that you are financially capable and Nevada Gaming Control Board pre-qualified, I will forward the information on the property that best fits your acquisition criteria.

For more Information about Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR call me directly at: 70 25 01 93 88!

Famous Real Estate Investing Quotes!

"This is a re-print from a posting on the ActiveRain Web Site."

Throughout history, from ancient Hebrew Proverbs to the modern day Donald Trump, we have advice from men and women who have become successful by investing in real estate.  As you read the following quotes, you may note, as I did, there is a genuine love and respect for real estate coming from these famous people.  Enjoy!

"Don't wait to buy real estate. Buy real estate and wait." - Robert G. Allen

"Why put your money in the stock market when over 95% of the wealth in this country was, and still is, being made with real estate?" - Unknown

"Don't wait to buy land, they aren't making any more of it." - Will Rogers

"It's tangible, it's solid, it's beautiful. It's artistic, from my standpoint, and I just love real estate." - Donald Trump

"The land is good. Be not hesitant to go, and to enter to possess the land."  - Judges 18:9, Old Testament

"The major fortunes in America have been made in land." - John D. Rockefeller

"I made a tremendous amount of money on real estate. I'll take real estate rather than go to Wall Street and get 2.8 percent." - Ivana Trump

"Landlords grow rich in their sleep." - John Stuart Mill

"Ninety percent of all millionaires become so through owning real estate." - Andrew Carnegie

"I bought properties inexpensively and made a lot of money. I began to think it was easy." - Donald Trump

"He is not a full man who does not own a piece of land." - Hebrew Proverb

"God, please just give us one more real estate boom." - Steve Hewson

"Remember, anyone can do it--not everyone will. The only question is: Will you?" - Gary Keller in The Millionaire Real Estate Investor

"Those who are waiting for the bottom in Las Vegas Real Estate will miss it." - David  Howes

For more Information about Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR 70-25-01-93-88!