Commercial Real Estate
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Commercial property

Understanding the Basics of Commercial Property Investment in Orange County, CA

commercial property investment

With about 29% of Americans citing it as their favorite long-term investment, the real estate market continues to thrive across the US. While a lot of purchases are residential, others take the leap and reap the benefits of commercial property investment.

If you’re looking to become an investor in the commercial real estate market, it’s important that you understand the basics, benefits, and investment processes. Read on to learn how you can start investing in commercial real estate in Orange County, CA.

Why Invest in Commercial Real Estate?

Commercial real estate is a tangible investment. It physically exists and can appreciate or depreciate in value over time. Rather than having a value that companies assign to it as stocks do, tangible assets have intrinsic value in their own right.

Tangible assets like real estate are good because they have real-world applications. This increases the value because you and renters can consistently use it.

Portfolio Diversification

Diversifying your portfolio is important because all investments come with risks. If you make a stock market investment that doesn’t pay off, you could be out a lot of money.

But diversifying with real estate investments makes it more likely that one of your investments will pay off. That way, if one fails, you’ll still have income and returns to fall back on. You won’t lose all your money.

Commercial real estate investing is one way to add a new type of asset to your portfolio. It can coexist with stocks, bonds, and other tangible assets like precious metals. You can mitigate risk and reduce the probability of a stressful financial loss.

Passive Income

Investing in commercial real estate is a great way to generate income. You can rent it out to businesses that will pay you a monthly sum for its use. All you need to do is maintain the building with the terms that you outline in their leases.

It’s easier to get more passive income from commercial real estate than residential alternatives. For one thing, commercial properties are larger. If you buy an office building, you may be able to collect rent from several businesses that operate in different parts of the property.

You also will be able to have longer leases with commercial renters than residential ones. While most individual home renters will want 1-year leases at most, commercial leases usually last between 5-10 years. You won’t need to worry about vacant properties, turnover costs, and unpredictable cash flow.

High Investment Returns

It’s also easy to get a high ROI on a commercial investment. This is because they tend to appreciate in value more over time.

There are a lot of great renovations that you can make to commercial buildings, and you’ll have a lot of time to do this. Since leases are longer, you’ll be able to work while people are still using the building in most cases. You won’t need to schedule upgrades around when people are living in the building since they’re not residential.

This is convenient and also helps you justify raising business’s rents when their leases expire. You can also sell it for more money down the line when it’s time to let go of the investment.

Types of Commercial Property to Consider

There are several different types of commercial property available to you. Retail storefronts are great for those who want a venue that hosts a business. This is ideal for well-positioned properties that get a lot of foot traffic.

You also may rent out an office building. Many investors like this because they’ll have the option to collect rent from multiple businesses in one building.

Unlike a retail store where only one person would pay you rent, you’ll get a ton of passive income from multiple people. Note, though, that you will likely need to perform more maintenance on these spaces.

Industrial facilities and warehouse centers are also commercial property options for new investors. You can rent these out to multiple businesses with similar manufacturing and distribution needs.

Because these facilities tend to be large, they’ll require a lot of maintenance and routine inspections. However, since you’ll be collecting so much rent, it’s often worthwhile.

If you’re looking to become a big-time real estate investor, you might consider purchasing multiple types of property. It’s a great way to expand your portfolio. As a beginner, though, research the pros and cons of each to decide what your first investment should be.

How Can You Make the Right Commercial Property Investment?

Before you get started, look at what commercial properties are available to Orange County investors. Carefully research the demographics in the area of prospective purchases and how much competition you’ll have for rent and leasing.

Properties in high-traffic areas tend to cost more upfront, but you can charge higher rent to businesses that want visibility. Consider this as you compare rates and decide on a location that’s right for your objectives.

Get the Right Funding

There are a lot of loans available specifically for those investing in commercial real estate. Commercial bank loans are the most common, and you can get a nearly unlimited amount of financing assuming that the property meets the bank’s basic requirements.

They’ll look at your personal lending habits and credit score, but they’ll also afford you more based on whether the property has a high projected cash flow and ROI.

Become an Investor Today

Now that you know the basics of commercial property investment, it’s time to become an investor ASAP. Our experts are committed to helping people like you find high-value properties in Orange County, CA.

We’re excited to discuss your specific wants and needs, so contact us to learn more about the properties we have available for sale.

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Commercial property

A Guide to Finding the Right Commercial Property in Orange County, CA

commercial properties

The commercial real estate industry employs about 3.9 million people as of 2023. Because of this growing figure, investing in a new property is a lucrative way to grow your portfolio.

Here, we’re going to talk about how you can find and invest in the right commercial properties in Orange County, CA. Read on for some tips, tricks, and advice to ensure that you diversify your assets the right way.

Determine Your Objectives

There are three core reasons that people invest in commercial real estate. These are safety, capital gains, and income.

Safety is basically when people invest in something to diversify their portfolio. If you’ve already invested in the stock market, you’ve risked money on those stocks. The company you invested in could fail, which would lose you a lot of money.

But diversifying means that you’ll have other investments that could still pay off. Real estate is a tangible asset, meaning that it holds intrinsic value (though this value can fluctuate with its condition, location, and market value). It’s a more secure investment than volatile alternatives.

Capital gains come from the sale of an asset. People buying property may be doing so to flip it, meaning that they’ll fix it up and sell it again for more money.

If this is your goal, you’ll need to do a lot of upfront research about maintenance costs and how much you can sell it for later. You’ll need to compare the costs and potential gains.

Many people also get capital gains several years down the line after generating income, so this is a long-term goal for some people who primarily are investing for passive income.

Generating income is one of the biggest objectives for commercial property investors. This usually comes in the form of renting it out to businesses and organizations. You’ll want to figure out how much you can charge in rent based on market trends, location, building condition, and building layout.

Look at All Available Options

Look into multiple types of property, including:

  • Office spaces
  • Warehouses
  • Retail venues
  • Industrial locations

Determine which will best help you meet your objectives.

Once you know what type of property you want, you can begin to look at available properties in Orange County, CA. Don’t get set on a single property. Exploring multiple options with an open mind means that you can compare and contrast various investments to find the most lucrative one.

As you examine and bookmark potential investments, you’ll need to consider what makes a property valuable.

Decide on a Location

Profitable investments need to be accessible and well-developed.

Orange County is fairly large and has multiple areas. Some places have better infrastructure than others, meaning that it will be easier to find tenants willing to pay rent. You’ll also be able to sell it later for more money.

It also will be easier to conduct repairs on the property if you’re in a well-constructed area. While it may cost more upfront to purchase a commercial property in Irvine or Newport Beach, it will ultimately pay off since people want to work and commute there.

Value the Condition

You can probably find dilapidated, run-down commercial investments for a really low price. Unfortunately, you’d also need to pay for extensive repairs to get them back in good condition. This is almost never worth it, especially because it would take so much time and labor.

Make sure that you go to the property in person and assess its condition. If the structural foundation of a building doesn’t look sturdy or it has excessive water damage, you might want to look elsewhere. People won’t want to pay to rent out a poorly-maintained space, so you could be looking at months or years of maintenance before bringing in any kind of ROI.

Examine the Space

Once you find a property that looks promising, thoroughly examine its layout. The arrangement of a commercial property will impact how effective it is for businesses to operate there. If people won’t like the layout, it’s not a good investment choice regardless of the building condition.

At this point, you’ll also need to talk with professionals about coding and projects. Make sure that the building layout is free of hazards and up to legal regulations. See what you’d need to do to fix it if not and make sure that you can get permission from the necessary authorities.

This will give you the full picture of your investment and let you know what you might need to do to get a high return.

Understand Risks

All investments come with risk.

High-risk investments tend to pay off more, but they also can fail. That’s why diversifying your portfolio is so important. If one investment doesn’t pay off, another will keep you afloat.

It’s important to consider how risky investing in a specific property is before you put any money into it. This means looking into the area’s commercial property market, the history of the specific building, and market trends within the industry.

Be Mindful of Your Budget

While it’s better to pay a higher upfront cost to save money later, you also don’t want to overspend. Make sure that you stick to the budget that you originally set. Incorporate any immediate maintenance that you deem necessary into the upfront budget, too.

If you’re not careful of how much you spend, you might end up with insufficient funds for maintenance and upkeep. This is a surefire way to make your investment fail, so avoid it by calculating all costs accurately. If you’re unsure of anything, you can also talk with a financial advisor.

Invest in Commercial Properties Today

Buying property is a good way to obtain passive income, access a tangible asset, and ultimately turn a profit. Now that you know how to find commercial properties in Orange County, CA, it’s time to get started.

Our experts are excited to help you find retail venues, office spaces, warehouses, and more in the area. If you’re looking to buy or sell commercial real estate, contact us online or call (877) 775-9625 for more information.

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Commercial Real Estate

Benefits of Investing in Commercial Real Estate in Orange County, CA

investing in commercial real estate

Investing in commercial real estate has a 9.5% ROI, so it’s a good move for anyone looking to diversify their portfolio. Whether you need a space to conduct business or want to lease it out to commercial tenants, you’re making a great choice.

Here, we’re going to talk about some top benefits of real estate investing in Orange County. Read on to learn how you can make the most of your next financial move.

Diverse Opportunities

“Commercial real estate” isn’t just a single type of property. It includes:

  • Retail store venues where businesses can set up shop
  • Office spaces for SMBs to conduct business
  • Industrial facilities for manufacturing plants
  • Warehousing venues for distribution

You’re not locked into a single type of property when you consider a commercial real estate investment. You can lease out multiple types of spaces and broaden your reach over time.

Portfolio Diversification

Investors need to diversify their assets to mitigate the risk of financial loss. If you put all your eggs in one basket and only invest in stocks, for example, you’re going to lose all your money when the stock market dips. However, if you have more assets like bonds and real estate, you’ll have income from multiple sources and won’t lose all your money because of a single financial event.

Real estate is a safe investment because it’s tangible. You can access the property, involve yourself in maintenance, and even use it for business if the need arises. People are also constantly looking for places to rent out for business, industrial, and distribution purposes.

This means that your commercial property will still generate income for you regardless of your other investments. You’ll still be getting passive income even if you make poor stock market investments or try your hand at buying new virtual assets.

Passive Income Potential

Passive income” is money that comes from a source besides an employer. Renting out a space and collecting money from tenants is one of the most common passive income sources.

You don’t need to do anything but prepare the paperwork, sign a lease, and maintain the property when necessary. In exchange for this low-effort job, you can collect thousands of dollars each month in rent.

Commercial properties are a great way to get a lot of passive income since you can lease out to multiple tenants. You can give multiple companies office space on different floors of your building to collect from each business individually. You can rent out warehouse space or storage facilities to many different commercial companies.

Plenty of Financing Options

Commercial Orange County investing has more passive earning potential than residential alternatives. You’ll be glad to know that there are also more financing options available for those looking for commercial investments.

Banks and credit unions have loan programs made specifically for commercial investments. Third-party lenders are also often willing to give out commercial loans because they’ll be paid back with interest.

In a lot of cases, these loans have lower interest rates than residential property loans or personal loans. They also usually have better payback terms than those that residential mortgage brokers might offer. You’ll have a wider variety of funding to choose from.

Tax Deductions

Those who invest in commercial properties also can get a lot of tax benefits. Some benefits include:

  • Depreciation deductions for income taxes
  • Deductions for property repairs, management and operating expenses, and maintenance fees
  • Tax deductions for interest expenses
  • Reduced tax burdens for your beneficiaries/heirs
  • Deductions for Qualified Business Income (QBI)

These tax breaks make real estate a profitable investment. You don’t need to worry about high taxation on your commercial property. You will also be able to funnel more money back into the property and increase its overall value for future rentals and leasing opportunities.

Value Appreciation

Commercial properties will also naturally accrue more value over time. This is true even when you don’t consider the changes, renovations, and improvements you’ll make.

The real estate market is a steadily growing one, especially in some areas of California. The population has increased a lot over the past decade. There are more jobs than ever before.

This means that Orange County investors stand to get a lot of money as a result of this natural growth. The demand for commercial rentals will go up while the supply remains stagnant. You’ll be able to collect more rent and sell it for more money in the future when you choose to move on.

A Long-Term Investment

Residential properties are often fairly short-term investments. You only have a few tenants and they won’t require too much maintenance. This is, of course, assuming that you keep the property in top shape to begin with, but it will be less effort than a commercial building.

Commercial investments require more care and maintenance, but this is actually a good thing. You will have the chance to make improvements and turn your profitable property into something extremely lucrative.

Over time, you’ll be able to perform major renovations that greatly increase the property’s value. You can charge more rent and get greater benefits. Commercial real estate is an investment that never stops giving.

Start Investing in Commercial Real Estate Today

Now that you know the top benefits of investing in commercial real estate, it’s time to get started. Our experts are dedicated to helping people in Orange County find commercial properties to buy or lease.

We will help you access retail, industrial, office, and warehouse facilities so that your business can be as profitable as possible. Call (877) 775-9625 to begin searching for property to invest in.

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Commercial Real Estate

Commercial Real Estate Market in Orange County, CA: What You Should Know

commercial real estate market

The average American landlord makes about $73,406 annually. In Orange County CA, this number is even higher at around $75,141. If you’re looking to make an investment with a high return, you can’t go wrong with real estate.

The Orange County commercial real estate market is one of the best in the nation for property owners to collect rent in. Read on for an overview of this market and some trends to keep an eye out for.

Averages and Statistics

The first thing that you may wonder is whether purchasing Orange County real estate is worth the return. The answer to this question is a resounding ‘yes.’

Los Angeles is about one hour north of Orange County, but its market is similar for several reasons. Both are high-end communities in Southern California. Both have excellent real estate markets, wealthier homeowners, and good weather and living conditions.

In Los Angeles, the average commercial property sells for $484 per square foot. Most business landlords ask for about $46 per square foot of commercial space monthly.

This amounts to $552 per square foot every 12 months. After leasing a building out for 1 year, the average LA property owner turns a 14% profit. In 

That’s not bad, especially considering that you’ll be leasing it out over several years! Plus, when tenants remain in the building longer, you’ll have the opportunity to increase their rent and make more money.

Would Residential Renting Be Better?

Short answer: no.

Residential property costs less to purchase up front, but the average California landlord only gets $3-4 per square foot of rental space. Property values will obviously vary – a well-maintained home may be a better investment than a dilapidated office building. But these are exceptions to the standard, not the norm.

Commercial properties are also a superior investment because they’re long-term. They require more care and maintenance than residential buildings, but this is a blessing in disguise. You’ll have a lot of chances to raise the property value and turn an already-lucrative investment into something extremely profitable.

Not only that, but commercial property landlords also get a lot of tax benefits. Maintenance comes with deductions, but so do interest expenses and depreciation deductions. There also will be deductions for Qualified Business Income, so you’ll get a lot of tax breaks.

Bouncing Back

The pandemic hit the Orange County real estate market hard. Leases had 12% vacancy rates in 2021 at the heart of the COVID-19 crisis.

However, they’re now coming down and have reached about 11%. This is still higher than the 2016-2022 10% vacancy rates, but it’s a step in the right direction. 

In both commercial and residential real estate markets, rent also did not grow during the pandemic. In 2021, the average rent for all property types decreased by about 5%. However, it’s bouncing back and is at about -0.8%.

Landlords in Orange County can expect future growth, though. California’s real estate market is currently characterized by high demand, growing businesses, and varying supply chain needs. Each of these factors makes the state a top-notch place to purchase and lease out property.

The Orange County Office Market

Commercial property sales in Orange County are lower than the national average. They make about 350 trades when compared with the national average of 400.

It’s important to note, though, that the value of property sales is higher than most. The overall $2.7 billion value means that the market is likely to make a pretty good comeback in the coming years.

More Financing Options

If you were to purchase a residential property to rent out, your financing options would be severely limited. You’d need to take out personal loans or specialized mortgage loans for residential properties.

However, commercial real estate has far more financing options. Banks offer specific loan programs for those looking to make commercial property investments. There are also third-party lenders looking to give people commercial loans to buy property.

Many of these loans also have lower APRs than residential property loans. They certainly have lower interest rates than normal personal loans. You’ll be able to choose from more funding options that give you better bang for your buck.

Many Types of Commercial Buildings

It’s also important to note that there are several types of lucrative commercial investments. Orange County commercial real estate encompasses office buildings, retail venues, industrial facilities, manufacturing plants, and warehouses. You’ll be able to determine what type of property you want to maintain and rent out.

To determine the best option for you, consider:

  • The condition of the specific properties you’re looking at
  • The location of the property you’re looking to lease
  • Which facilities require more maintenance
  • How much the current rent is (so you know how much you’ll make)
  • The square footage of the property (so you can accurately calculate ROI)
  • The distance between the property and others you’re looking to buy in the future

Note that you aren’t committing to only leasing out a single type of property. Once you have an in with the commercial real estate investing market, you’ll have access to all these property types. You can expand your reach over time to be even more lucrative.

Beyond the Orange County Real Estate Market

Now that you know the basics of the Orange County commercial real estate market, it’s time to begin investing in high-ROI properties. Our team is committed to helping you locate a property to manage so that you can collect rent and earn passive income.

We offer office spaces, retail venues, and more, so you’ll have a diverse selection to choose from based on your specific needs. Call (877) 775-9625 to learn more about leasing or buying property.

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Commercial property

The Key Steps to Starting a Retail Business in Orange County, CA

starting a retail business

In 2022, 5,044,748 new businesses were started in the US. Small businesses help drive the US economy and are some of the largest employers across the country. 

Starting a retail business requires serious planning and fortitude if you want your business to beat the statistics for long-term survival. 

If you have a passion and an idea, you can turn it into a successful retail business with proper planning. So, what should you do if you’re ready to start your own business?

Read on to learn the things you should consider and do before you jump into business ownership.

Create a Business Plan

Before you ever consider physically starting a retail store, you need to do some planning. Learn from the wisdom of others who have walked that road before. It would greatly benefit you to research expert business tips. 

One of the first steps in opening a business should be to create a business plan. This step forces you to work out your plan and organize it on paper. 

Most banks and investors won’t do any financing for a business that doesn’t have a concrete business plan in place. 

The business plan should outline your business mission statement, goals, and specific steps you’ll use to achieve those business goals.

Consider Your Start-Up Costs

Any business needs money and funding sources to get started. Maybe you’ve been saving to get your business off the ground. Or perhaps you’ll seek a small business loan. 

Either way, as part of your business plan, you need specific anticipated costs to get the business going. Let’s take a closer look at what some of those costs will include.


You know the adage, location, location, location. Building a successful retail space means finding a location that attracts customers.

You need to evaluate the commercial real estate market for both what’s available and what it will cost to rent or buy for your business. 

You may also run into some renovation costs to set up a location so it meets your business needs. 


Once you’ve narrowed down the location, consider rental costs. If you opt not to buy a property, you’ll need to commit to a lease agreement. 

Part of your business plan should include what rent will potentially cost for the duration of a lease. You also want to anticipate how much business you need to generate to cover this expense and others. 


All businesses have a variety of insurance needs. You’ll need business insurance and liability coverage to cover the property and the goods inside your business. 

If you don’t have another avenue to get it, as part of your plan, you must also account for the cost of health care coverage.


Once you start to consider properties for your business, you should be able to get basic utility information for a property. You need to consider your costs for:

  • Gas
  • Electric
  • Water and sewer
  • Trash pick up

Your utilities, like gas and electricity, will vary greatly depending on the physical size of your location and the climate in which you live. In Southern California, for example, much of the year, you should anticipate needing air conditioning for comfort. 

Product and Display

Your need for product and merchandising will significantly depend on if your retail business is product or service-based. Even most service-based companies have some products to sell. 

You need to work with vendors and evaluate your start-up costs to stock your shelves. You also need to anticipate costs for displays for the product. 


Some small businesses opt to start as one-person operations where the owner handles the business until revenue is coming in. While this might work short-term, it won’t be sustainable long-term.

You need to anticipate your costs for employee coverage. How many employees will you need on the payroll? Do some number crunching to consider how much revenue potential additional employees are? Does this number outweigh the costs?


You’ll have to be prepared for some technology costs for your business. You will need phones, computers, and wifi to run the business. 

You need to have a method of payment system in place. A robust retail point-of-sale system not only gives you a means for collecting money, but it usually also provides data collection and customer information security.


One cost that many businesses forget to plan for is marketing. They have the idea and are ready to get started. But marketing costs are essential so others can learn about your business and you can retain returning customers. 

You should anticipate marketing costs for:

  • Logo design
  • Business cards
  • Website design and maintenance

You need to obviously also consider any marketing campaigns to get the customers coming through the door. It would be wise to consider your costs for marketing for the first year as part of your start-up costs.

Secure Funding

Now that you’ve planned start-up costs, you can see that running a company requires funding. Your business won’t last long if you don’t have a plan for managing the costs. 

If you have a solid business plan with all the data for anticipated start-up costs, you can begin to research funding. Will you need a small business loan to get started?

Look for options for new business financing with terms that will work within the framework of your revenue goals.

Find a Business Location

Once you have financing in place, you can begin the actual search for commercial properties that fit your needs. Know ahead of time what amenities are important to you and how much space you need. 

Remember, location is one of the most important factors determining whether a business can attract customers. Be particular about where you choose for your business. Look until you find the right property for you.

Ins and Outs of Starting a Retail Business

Before actually starting a retail business, you need to plan for starting a retail business. The more time you spend planning and anticipating your costs and needs, the better prepared you are when you open the doors. 

Once you’ve done all the planning, you’re ready for a great commercial property and a proper grand opening celebration. For help finding the best property, call (877) 775-9625 to start your commercial property search.

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Commercial Real Estate

Investing in Commercial Real Estate in Orange County, CA: How Much Money Do You Need?

investing in commercial real estate

Did you know that the commercial real estate industry is expected to increase by over $250 billion by 2027? This means it’s a better time than ever before to invest money in commercial properties.

However, not everybody understands how much money they need to have for investing in commercial real estate. Let’s take a closer look at what you need to know before getting involved in the commercial real estate industry in Orange County, CA.

What Are the Different Types of Commercial Properties?

As you might guess, office buildings, retail stores, and industrial sites are all considered commercial properties.

Interestingly, though, many people overlook the fact that apartment buildings with five or more units are also considered commercial properties. This means there is plenty of opportunity in the area to find a great investment property.

Be sure to take your time when searching, though. This will allow you to find the best option for your needs.

How Much Money Do I Need to Invest in Commercial Real Estate?

The amount of money that you need for investing in commercial properties is highly dependent on the type of property that you choose. For example, an apartment complex may require a large down payment and more capital over time than an office building will. Additionally, the size of the property that you choose will affect your investment budget.

In general, buyers need to have a down payment of approximately 20% in order to secure financing. Otherwise, they may not be able to find a lender that is willing to work with them.

Additionally, it’s recommended that buyers have a cash reserve that is equal to six months of mortgage payments in order to cover any expenses or vacancies that may occur.

Where Do I Look for Properties?

Commercial real estate in Orange County is available through local realtors who specialize in the area.

Additionally, there are many online resources available that can help you find properties in the area. It’s important to do your research, though, as many of these sites may not have real-time pricing or accurate data on the availability of properties.

Are There Any Tax Benefits?

Investing in commercial real estate can offer many tax benefits for those who are willing to take the time to understand the laws. For example, depreciation of the property can be used as a deduction on taxes.

Additionally, investors may be able to qualify for 1031 exchanges which allow them to defer capital gains taxes when trading in one investment property for another.

What Financing Options Are Available?

There are several different types of financing options available for commercial real estate investments, including traditional bank loans, private money loans, and bridge loans.

Depending on your financial situation and credit score, you’ll want to look at all of these options to see what best fits your needs. Your loan history will also play a large role. If you had issues repaying commercial loans in the past, it will be more difficult to secure financing.

What Other Costs Should I Consider?

When investing in commercial real estate, it’s important to factor in all of the associated costs that come along with owning a property. These can include property taxes, insurance, maintenance, and repair costs.

You should also consider utilities and legal fees. It’s important to go over each of these costs with your financial advisor before making any decisions. This will help you avoid complications in the future. P

What Type of Return Can I Expect?

The returns that you can expect from investing in commercial real estate are highly dependent on the location, type of property, and other factors.

Generally speaking, though, it’s not uncommon to see an annual return of 6-7% on your investment. This is contingent upon multiple factors like the local market, the condition of the property, and how well you manage the rental income.

What Are the Different Ways I Can Invest in Commercial Real Estate?

One of the most common ways to invest in commercial real estate is by purchasing a property outright and renting it out.

Alternatively, you could invest in a real estate investment trust (REIT), which allows you to own shares of multiple properties while still being able to benefit from the rental income.

There are also syndications that allow multiple investors to pool their money together and purchase larger properties. This is great for those who don’t have a ton of capital to work with.

Many people find they benefit the most when they have more control over their investments. So, take this into consideration. Group-based investments might not always be the best choice.

What Should I Do When I’m Ready to Invest?

Working with the right commercial real estate brokerage is essential when it comes to finding the property that is best for you. When searching for one, make sure to look for an experienced team in the Orange County, CA area.

They will be able to guide you through the process, helping you to find the right property and obtain the financing that you need. Keep this in mind when looking for Orange County properties.

Investing in Commercial Real Estate Doesn’t Have to Be Overwhelming

Initially, investing in commercial real estate may seem daunting. The good news is that the guide above has everything you need to know to make the process simple.

Looking for more information about what we can do? Reach out to us today to see how we can help.

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Commercial Real Estate

Tax Benefits of Owning Commercial Real Estate

buy commercial real estate

There are 2,432,860 commercial real estate businesses in the US, many of which must recognize the many tax benefits of owning it. 

There are a plethora of tax benefits to owning commercial real estate. Many people buy commercial real estate because it’s a different kind of investment than, say, stocks. What they quickly realize are the benefits of commercial real estate investments. 

You might wonder if putting your money into real estate is a smart move and what benefits you get from it. Read on to learn more about the tax benefits of buying commercial real estate. 

Tax Deductions on Interest Expenses

One of the many tax benefits of buying commercial real estate is the many tax write-offs. If you have a mortgage on a commercial property, you can use the mortgage interest as a deduction. 

So, let’s look at an example. Let’s say you hold a mortgage on a commercial property and pay $12,000 per month. You can’t write off the entire $12,000. But you can write off the interest part of it. 

So, of that amount, $2,500 of it might be an interest payment. That’s a $30,000 deduction you can use when it comes time to file your taxes. 

Depreciation Deductions

Another great tax benefit for commercial real estate is the depreciation advantage. The IRS assumes that over time a commercial property will depreciate in value. 

They allow you to deduct that depreciation at a certain percentage each year. Currently, you can deduct a percentage of the depreciation over a 39-year period for commercial real estate. 

So, let’s say you own an Orange County commercial property worth around $10,000,000. Each year you can deduct about $256,000 in depreciation deductions. 

It’s also important to remember you can do this over a 39-year period for commercial real estate. 

Other Non-Mortgage Related Tax Deductions

Aside from interest and depreciation, there are other commercial real estate investment tax benefits. It wouldn’t be realistic to assume you won’t have other related real estate expenses for your investment. 

Another benefit to commercial real estate investing is that you can also write off other expenses. These write-offs might include:

  • Repairs
  • Maintenance costs
  • Property management expenses
  • Operating expenses

The IRS even allows investors to write off travel expenses when they visit the rental property, including hotels and a percentage of food expenses. 

It’s worth noting that improvements might not be a write-off but can later be written off when depreciating.

Commercial Real Estate Losses

The reality is that most people invest in real estate to make money. But occasionally, properties are sold at a loss. 

When this happens, you can still use it to your tax advantage. You can take a few routes to get a tax benefit on a real estate loss. 

If a commercial real estate investor has a loss and makes less than $100,000 in income, they can write off the loss. So, for example, let’s say the investor’s income is 98,000. 

They sold a property and lost $32,000 on the investment. This means the investor can lower their annual taxable income to $66,000. 

If your income is more than $100,000 but not more than $150,000, you still can write off a portion of the losses. If your income exceeds $150,000, you cannot write off losses. 

There is a caveat to the $150,000 rule. You can write off as much as needed if you make more than $150,000 if you work in the commercial real estate industry. This would include working as a broker, agent, investor, or property manager.

To qualify for this benefit, the IRS requires you to work in the commercial real estate arena for at least 750 hours per year. 

Beneficiary Tax Benefits

As an investor, you can also consider the long-term benefits for your heirs. 

Let’s say you pass away, and the property has grown in value from $5 million to $7 million. Your heirs only pay taxes on the capital gains of $2 million. 

So, they only pay taxes on the appreciated amount, not the whole amount. 

Commercial Real Estate Vs. IRAs

Many investors consider IRAs for investments like they might commercial real estate. So, let’s compare how they stack up for tax purposes. 

When investors buy into an IRA (not a Roth IRA) and later cash it out, they pay taxes on their personal income rate. 

When an investor buys commercial real estate, then sells it later, they only pay the taxes on the capital gains part of the income, not the entire sale amount. Of course, this is also after having other tax benefits while owning the property.

1031 Exchanges

1031 exchanges is an IRS tax program that many commercial property investors use to grow their real estate portfolio. 

In simple terms, a 1031 exchange allows a real estate investor to buy and then sell a property. If the property increases in value, the investor can take the capital gains and invest the profit into another like-kind property. 

The capital gains taxes on the properties bought and sold generally aren’t paid until the final property is sold. Often real estate investors will keep exchanging properties for ones higher in value. 

Then they wait to sell the property when they’re in a lower tax bracket later in life, saving them on capital gains taxes. 

This is a big opportunity to save on capital gains taxes. 1031 exchanges come with a long list of regulations and must be done precisely right to actually get the benefit. If you’re interested, consult a tax specialist to ensure you follow the process correctly.

Take Advantage of the Many Benefits When You Buy Commercial Real Estate

Many tax advantages are available when you buy commercial real estate. The opportunity to make money from the properties while you own them and a profit once you sell are worth consideration.

If you’re interested in Orange County real estate, we can help. Let’s work together to find the right property for your commercial real estate investing goals.


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Commercial Real Estate

8 Questions to Ask When Choosing a Commercial Real Estate Broker

commercial real estate broker

The availability of commercial property in California is declining. In Orange County, industrial space vacancy is 1.3%, and only 2.4% of the property is available for sale. Office space vacancies are at 2%, and there is no data on retail space.

Seeking property to use for your Orange County business requires working with a trustworthy, experienced commercial real estate broker. You need someone who is a good listener, can understand your needs, and is willing to answer all your questions.

The key to hiring a commercial real estate broker is asking the right questions. The eight questions below will help you decide if a broker is the proper person to help you find commercial property for your business.

1. What Areas Are You Familiar With?

You need a real estate broker with in-depth knowledge of the local markets when seeking commercial property. This allows them to advise you on the best location for your needs.

Whether selling or buying property, you want the professional handling your real estate transaction to understand what kind of clientele frequents the area, whether it is a good location for retail traffic or has easy accessibility for manufacturing and shipping.

2. What Is Your Experience in This Field?

Just like you wouldn’t go to a heart surgeon for a problem with your foot, you don’t want a real estate broker with plenty of residential experience but none with commercial property. Ask about past clients, office sizes, industries they handle, and anything else pertinent to your search.

Another factor is the broker’s number of closed deals, not the number of years in business. A broker may have been in the industry for 20 years but only working part-time with very few closed deals. Another broker may have been only in the business for five years but spent it putting in extra hours and closing hundreds of sales.

Ask about their credentials, including education, licensing, and any other qualifications they have. In California, to become a real estate broker, the applicant must pass a written examination, have at least two years of full-time licensed experience or the equivalent, or have a four-year degree in real estate.

3. What Hurdles Have You Encountered?

Commercial real estate brokers have likely encountered a few challenges when dealing with clients. This can be anything from meeting specific needs, excessive demands, tough negotiations, etc.

You can also ask about what problems they see with the current market. As real estate trends go up and down, so does your power as a buyer or seller.

Your broker can provide data and analysis to help you understand what direction prices are moving. This allows you to decide whether it is better to buy or sell now or whether it may be more financially beneficial to wait a few weeks or months.

4. Do They Offer the Services You Need?

Real Estate companies offer a variety of services. You want to ensure the real estate broker you hire provides the service you need. Specialized areas include:

  • Buying and selling commercial property
  • Buying and selling residential property
  • Commercial property leasing
  • Commercial property management
  • Residential property management
  • Investment consulting

If you are interested in real estate investing, seek a broker familiar with the particulars of the industry you will focus on. Some real estate brokers concentrate on a specific type of commercial property. This may be an industrial, warehouse, retail, or a building that houses all new offices.

When interviewing a broker, if they sound unsure about the service you require, find a commercial real estate agent comfortable meeting your needs.

5. Are You Familiar With Tenant Improvement Allowances?

If you are interested in leasing, rather than purchasing, commercial property, find out if your commercial real estate broker has experience obtaining improvement allowances during lease negotiations.

If you are interested in leasing property, find out if your commercial real estate broker has experience obtaining improvement allowances. This is important if you are anticipating a buildout in your office space.

A Tenant Improvement Allowance (TIA) helps new tenants with the build-out of their new lease space. Build-outs are improvements the new tenant makes to the area, making it usable for their business.

The cost of a TIA is generally built into the base rent. Make sure you and your broker have a solid understanding of the necessary improvements and their estimated cost.

6. What Will Your Services Cost Me?

Generally, broker compensation is funneled through the property or landlord. There are exceptions where a broker may charge for a project, like reviewing a lease. If you have any concerns about whether you will be paying fees, find out before you have the broker begin work.

Make sure you understand whether the buyer or seller pays the broker’s fees. Verify whether the broker will be acting on behalf of the buyer or seller.

In some instances, the broker may work on behalf of the seller. Their role is to get the best sale price for the property.

A buyer’s agent works on behalf of the buyer. Their goal is to look out for the buyer’s best interests, negotiating the best purchase price.

Whether buying or selling, ensure you understand what role the real estate broker plays and how involved they will be in finalizing the deal.

Commercial brokers only receive payment once the deal is complete. Dealing with a financially stable company means the broker is less likely to rush proceedings or negotiations to close the deal quickly.

7. Have You Ever Worked With a Company in My Industry?

Each company and industry has specific needs. Finding a broker that can draw on experience in the same industry allows them to pull from that experience.

If the broker has never worked with a company of your type, are they capable of adapting and learning about your specific needs? A broker’s enthusiasm for helping you find the perfect property can supersede the need for prior experience.

8. Why Did You Decide to Sell Commercial Real Estate?

Why a person is selling commercial real estate provides insight into how they will likely perform their job. Someone who feels stuck in their position because they couldn’t find anything better will not put forth anything beyond the minimum effort.

Someone with compassion for helping others, who enjoys their position and has a strong desire to help people find the perfect commercial property, will approach their work enthusiastically. They are the broker that will go the extra mile to find you the ideal location.

Finding the Best Commercial Real Estate Broker

When looking for the best commercial real estate broker, select one who listens and desires to fulfill your needs. They need to understand commercial leases and the market.  You will narrow down the field and make the correct choice by asking the right questions.

Get started selling or buying commercial property by contacting Commercial Orange County. We are a full-service commercial real estate broker.

Browse our selection of commercial property for sale or lease, then call (877) 775-9625 to find the perfect commercial property for your business.

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Commercial property

How To Find the Perfect Office Space in Orange County, CA

Office Space

Nearly 50% of businesses fail within the first five years in the United States. However, there are measures you can implement to help avoid this.

Finding the right business space for your company is essential when it comes to ensuring your future success. However, medically understands what to look for when browsing through different options for their office.

The good news is that finding the right office space in Orange County, CA is a straightforward process that doesn’t have to be difficult. Let’s take a closer look at everything you need to keep in mind.

Does It Have Enough Space?

When it comes to office space, size matters.

Make sure the layout fits your needs and that you have enough room for all of your employees, clients, and business operations. This means that you should pay attention to the number of rooms, cubicles, or desks available.

You should also check for other amenities like parking spaces or conference rooms.

Is It Close to Your Target Market?

Location is an important factor to consider when looking for office space in Orange County. Does the area have a strong customer base that you can tap into? If you’re in a high-traffic area, chances are people will be more likely to visit your business and become potential customers.

It’s important to weigh the pros and cons of each potential location before deciding on one.

Can You Afford It?

The cost of office space will depend on a variety of factors, including the size, location, and amenities available. Make sure that your budget is aligned with what you’re looking for so that you don’t overspend.

Keep in mind that you may be able to find cheaper options if you’re willing to settle for a smaller space or an area that’s not as close to your target market.

This might be the best option for smaller businesses that don’t necessarily have the largest budget. More often than not, you will be able to establish a presence in your industry and then relocate in the future.

Do You Have the Necessary Permits?

You’ll need to make sure that all of your paperwork is in order before signing a lease or rental agreement.

This includes obtaining the necessary permits and licenses to operate your business in Orange County. Be sure to check with local authorities and other regulatory bodies to ensure that you’re compliant with all applicable laws and regulations.

Don’t Be Afraid to Negotiate

When it comes to negotiating the terms of your lease or rental agreement, don’t be afraid to ask questions and push for a better deal.

This is especially true when it comes to office space, as there is often plenty of competition between landlords and tenants. You may be able to get discounts on rent or other perks if you have the right leverage.

Work With the Right Professional

Working with a knowledgeable commercial real estate professional can make the process much smoother and ensure that you get the best deal possible.

They’ll be able to provide insights on local market trends, help you weigh all of your options, and negotiate on your behalf if necessary.

Always Read the Contract

Before signing a lease or rental agreement, it’s important to read through the contract and make sure that everything is in order.

Pay attention to all of the details — including any fine print — so that you understand exactly what you’re getting into. If there are any clauses or terms that don’t sit right with you, don’t be afraid to ask questions or negotiate.

Tour Multiple Properties

Before making a final decision, you should always tour multiple properties. This will give you an idea of the different office spaces available in Orange County and make it easier to find one that meets all your needs.

Don’t be afraid to ask questions and get feedback from other tenants in the building if necessary.

Is It Comfortable?

Don’t forget to consider comfort when looking for office space.

After all, this is where you’ll be spending the majority of your workdays. Look around the property and make sure that it has a comfortable atmosphere with enough amenities and features to keep your employees happy and productive.

Will Your Employees Be Productive?

Productivity should be an important factor to consider when choosing office space. Look for features that will help your employees stay organized and focused, such as ample natural light, comfortable furniture, plenty of storage space, and good air circulation.

You should also think about whether the layout of the building is conducive to collaboration and communication between team members.

Is There Room For Future Growth?

When selecting office space, it’s also important to take your company’s future growth into account.

Think about whether the property has enough space for expansion and if there are any provisions in place for upgrades or renovations. This will help ensure that you don’t have to move again in a few years and can focus on growing your business instead.

Otherwise, you may end up spending more money in the long run. This could prove to be a substantial amount under some circumstances.

Finding Office Space Doesn’t Have to Be Overwhelming

Initially, finding the right office space may seem daunting. The good news is that the guide above has everything you need to know to make the process simple.

Looking for more information about what we can do? Reach out to us today to see how we can help.

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Commercial Real Estate

6 Benefits of Investing in Commercial Real Estate in Orange County, CA

Commercial Real Estate

Did you know that The commercial real estate industry is projected to grow by more than $250 billion over the next five years?

This means it’s a better time than ever to consider buying commercial property. However, not everybody understands the key benefits of real estate investing when it comes to commercial buildings.

We’ve put together a quick guide that outlines the key information you need to know before you get involved in the Orange County, CA market. Let’s take a closer look.

1. Higher Earning Potential

As you might guess, commercial real estate has the potential to earn you much higher returns than residential investments.

This is because business owners are willing to pay more for a location that is conducive to their operations, and those prices can be substantially higher than those of a single-family home. Additionally, commercial properties can also generate more income through rent payments from tenants and other sources. These often include retail or office spaces.

2. Tax Benefits

Another great benefit of investing in commercial real estate is the sizable tax deductions it can provide.

These deductions vary depending on the type of property and your filing status. They can include write-offs for depreciation, repairs and maintenance, and insurance premiums.

They can also include interest expenses and taxes paid to local governments.

3. Lending Options

When it comes to commercial real estate, there are many more financing options available than when it comes to buying a residential property. For example, lenders such as banks and private money lenders offer loan programs specifically designed for commercial investments.

These loans often have better terms and lower interest rates than those offered by traditional lenders like mortgage brokers.

4. Long-Term Investment Opportunities

Unlike residential properties, commercial real estate is a long-term investment and requires more of your attention.

You may have to put in extra time and effort to maintain the building. You may also need to hire contractors to do repairs or make improvements, pay taxes, and keep up with tenant issues. As you do so, you can often increase the value of your property and maximize your returns.

5. More Tenants Equates to Less Risk

The more tenants your commercial property has, the less risk you are likely to have in terms of vacancy and income. Businesses tend to stay in one location for a longer period of time than individuals do, making them more reliable sources of income.

Additionally, if you own multiple properties with different tenants, you can spread out your risk even further.

6. High Appreciation

Commercial properties don’t just generate income — they can also appreciate in value over time. This is especially true when you invest in properties located in areas that experience high growth.

For example, Orange County, CA, has seen tremendous population and job growth over the past decade. This makes it an excellent place to invest in commercial real estate.

How Do I Know What Type of Commercial Building to Invest In?

The type of commercial property you should invest in depends on your own personal goals, financial situation, and risk tolerance. Generally speaking, it’s good to research different types of investments so that you can make the best decision for your individual needs.

For example, if you’re looking for a more passive investment with the potential for long-term appreciation, you may want to consider investing in an office building. Ultimately it’s important to do your research and find an investment that is right for you.

What Are Common Mistakes That Investors Make?

Common mistakes that investors make when it comes to commercial real estate involve purchasing a property without researching the area. People also don’t take into account all the potential costs associated with owning and managing a property.

Of course, not having enough capital for upkeep and repairs and failing to properly vet potential tenants are also issues.

Some investors also fail to do their due diligence in terms of researching the local market, zoning laws, and taxes. It’s important to avoid these mistakes and do your research before investing in any type of real estate property.

What Should I Look For in a Professional?

Not every firm will be able to meet your requirements. Researching your available options is something you cannot overlook.

The past reputation of the company will play a large role in the results you get. Checking past feedback will go a long way.

You should only work with companies that have overwhelmingly positive reviews. Afterward, consider how experienced they are in the industry.

They should be able to easily convey their capabilities. Booking a consultation is a great way to get started. If you aren’t part of their target demographic, they likely will not be able to help you.

Hiring the wrong firm can come with many consequences. Before you move forward, look at how they have established their billing structure.

The last thing you want is to deal with unexpected costs. If you find yourself uncomfortable communicating with them, you should research other options.

They should also go out of their way to learn more about your project.

Investing in Commercial Real Estate Doesn’t Have to Be Difficult

Although it might seem complicated at first, choosing the right commercial real estate state is much easier than it seems. As long as you keep the above information in mind, you’ll be sure to meet your needs.

Looking for more information about what we can do? Get in touch with us today at (877)-775-9625 to see how we can help.

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