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Ever find yourself asking, “Should I invest in commercial real estate?” Well, we have the answer, YES, of course. Commercial real estate has been a reliable investment regardless of the market cycles. Despite the recent turmoil caused by COVID, commercial real estate has shown its resilience. This type of investment will be a positive addition to anyone’s investment portfolio. Here is a list of the top 5 reasons you might want to consider commercial real estate as a top choice for your investments. Strong, stable cash flow. Like your stock distributions, commercial real estate is structured to deliver regular dividends to the investors. Unlike stock distributions, the return is usually greater and more stable. Diversification of your portfolio. This will protect you against losses if one of your investment classes underperforms or there’s instability in the stock market; your commercial real estate investment will likely be unaffected. There is the added diversification in commercial real estate with the multiple property types that can be chosen from. Making an even broader, more diversified investment portfolio. Real estate is tangible and a hard asset. Unlike your investment in the stock market, which can be one value today and a completely different value the next day, real estate tends to maintain its value over time. Even though property values may rise and fall, the tangible asset does not go anywhere. Tax Advantages. Owning real estate provides you with tax advantages and deductions. Unlike stocks and bonds, where the investor must put aside some of their income to pay the capital gains tax and less the investment as part of their retirement account. However, with commercial real estate, capital gains may be reduced or avoided altogether (remember to consult with your CPA or accountant). Co-investing/ Sponsorship. First-time investors or average investors generally don’t have the expertise to buy, sell, operate, and manage commercial properties. In today’s investment market, most investors aren’t doing it on their own. With sponsorships and co-investing opportunities, it is easier than ever to jump into the commercial real estate investment market. To wrap it up, there is a great opportunity for commercial real estate investors. The tangible asset yields robust and steady cash flows and represents diversification in anyone’s investment portfolio. The favorable tax benefits and buffers against the instability of the economy make commercial real estate a sound investment. Commercial & investment real estate education with the Trinity Team Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them! As always, thank you for your business and continued support!

Commercial renters might be difficult to find. The ideal tenant is priceless, but the unsuitable one might waste your time, effort, and money. There are a variety of ways to discover companies to rent space to, but these three are the ones I’ve found to be most successful on my properties. For more property owners, finding tenants and leasing business space can take a lot of time. especially if you do not invest full-time. 1. Hire a Commercial Real Estate Brokerage The simplest and most effective approach to locate tenants is by far this. Simply ask a commercial real estate broker to do it on your behalf! Office, retail, and industrial real estate are all covered by commercial real estate brokerages, which specialize in leasing and selling commercial property. Brokers are the greatest source to learn which companies are searching right now and which ones could need to migrate soon, since commercial real estate lacks a listing database. To stay informed about market developments, they maintain frequent contact with company owners, property management firms, and other brokers. Since commercial real estate brokers have a fiduciary duty to you and are thus acting in your best interests, you won’t have to pay them until they have given you a completely completed lease, since their fees are based on a percentage of the overall lease amount. Employing brokers helps landlords identify better renters and strike more advantageous leases. 2. List Your Space Online You may start by poking around and being familiar with the market using options like Loopnet, CREXi, and Craigslist so that you at least have a fundamental idea of what you’re looking at. As long as you are as specific as you can when listing your property, you should only attract targeted prospects. These platforms do allow tenants to search by product type (such as office or retail), the total square footage available, and (other than Craigslist) other minor details, such as loading docks, ceiling height, or access. 3. Place High-Quality Signage on The Property Feel free to include whatever details you see relevant about the area, such as its size and kind, on the sign. Although you won’t be able to utilize that sign for any other properties, keep that in mind.

How to Earn Passive Income Through Real Estate Investment In a world governed by risk, it’s common knowledge that real estate is one of the safest, most profitable investment options. Property is an extremely stable asset, as it’s almost always in demand and offers numerous income-generating opportunities. However, not every investor wants to play a hands-on role in managing a property, maintaining it, or handling the administration that accompanies this type of investment. Fortunately, investing in real estate and playing an active role don’t have to go hand in hand. You can still earn a substantial passive income through real estate investment without needing to actively manage it yourself. There are even ways to invest in real estate without directly owning it. In this article, we’ll look at the various ways in which you can earn a stable income from investing in real estate while remaining in a passive, low-effort position. 6 Ways to Generate Passive Income From Real Estate Investments With a high investment success rate, real estate is one of the best assets to invest in for relatively low-effort, passive income over time. And if you choose the right investment strategy, you can enjoy its financial rewards without losing focus on other projects or interests. Here are six ways to generate passive income from real estate investments: 1. Rent Your Property Out via a Third-party Agency Without a doubt, one of the most straightforward ways to earn passive income through real estate is simply to buy property and rent it out via a third-party broker. This way, you generate a consistent monthly income with very little direct input. The agency you hire can assume responsibility for finding tenants, arranging maintenance, and generally managing the rental affairs for a fee while you tend to your regular business. This removes any administration from your side, and you simply pay a set monthly fee for their services. The monthly rental payments can make fantastic passive income that goes straight into your bank account for savings, tuition, healthcare, or other investments to grow your wealth. 2. Invest in REITs REIT stands for Real Estate Investment Trust. A REIT is a company or firm that owns income-generating real estate across a wide variety of property sectors. Purchasing REITs on the stock market is a popular way to make passive income through real estate. How? Once you’ve purchased a REIT, you can earn whatever dividend that particular REIT pays out, many of which have a record of being increased on an annual basis. This makes REITs one of the most accessible and reliable ways to generate profit from real estate without needing to directly invest in, manage it, fill the role of a landlord, or employ the services of an agency. 3. Let Others Invest With Your Funding If you’re interested in the idea of investing in property without owning it yourself, it may be a good idea to let someone else invest through you. For instance, if you have the money to invest in a property, consider lending it to a real estate investor you trust to make the purchase themselves and handle all the maintenance and administration that comes along with it. When they do rent it out or flip it for profit, you can receive a portion of the finances, thus giving you an easy way to make an income in a passive—but—still—productive way. This is a smart way to generate passive income. However, you do need to ensure that you have watertight contracts in place to ensure that your money and your future earnings are secure. 4. Crowdfunding Real estate crowdfunding may be a relatively new way of earning passive income, but it’s quickly gaining recognition as one of the most accessible and effective. In this strategy, you may be empowered to make real estate investments that wouldn’t ordinarily be possible, such as investing in a high-rise commercial building or new development. You may also benefit from the experience and expertise of other investors who can add value to the property itself. To make passive income from real estate crowdfunding, you can either start or participate in crowdfunding to invest in a piece of prime real estate. Then you, along with the other experienced investors, will co-manage and earn from the property. However, it’s important to note that crowdfunding is almost always illiquid, meaning its value rarely liquidates into cash. This may be relevant to those with liquid preferences. 5. Wholesaling Wholesaling is another way to earn money from real estate investment without owning it actively yourself. This process involves purchasing a real estate contract, but then, instead of going through with the sale, you sell the contract to a buyer for a profit. Wholesaling is a simple yet highly effective way to reap the benefits of real estate investment that doesn’t require huge amounts of investment experience. If you have a list of potential buyers or make use of real estate lead generation companies to find them, you can quickly close a wholesaling deal. It’s not strictly passive income, but it can provide you with a substantial lump sum that can be drawn from over time instead. 6. Ground Leases Ground leases are leases on land rather than buildings, which still happens to be a sought-after and fairly low-risk form of property investment. Landowners tend to rent to building owners whose buildings are positioned directly above the land they buy. Ground leases generate relatively predictable passive income due to their consistent and lower-risk investment style. However, because of this, they do tend to have lower earning potential and can require a more substantial up-front cost in order to purchase. Final Thoughts Investing in real estate may be a financially fruitful endeavor, but it can also be laborious. There’s a lot of experience, knowledge, and effort required to keep a commercial or residential property in good condition to continue being profitable, and a lack of experience could lead to losses. But there are lots of ways to go about investing in real estate, and only a few of them involve active ownership. Passive income is a great way to grow your wealth without becoming too distracted with projects outside of your career, all the while diversifying your portfolio. Investing in REITs, creating a crowdfunding initiative, wholesaling, and lending out money to other investors can all result in generating passive income through property. Contribution by: Mae Franco

As the business development spokesperson for Trinity Team Property Management and the first connection most owners have, it’s my job to share what the current rental market looks like. Often, it’s an owner’s first exposure to the various ins and outs of the rental process and procedure. For the Trinity Team, the market has been stable with referrals steadily flowing in as usual. What we have seen change is the decline of insanely high and multiple offers on agent listings. In the first quarter or so, agents experienced 10-15 offers on a home for sale. As of today, the market has returned to a more ‘normal’ market for sellers and buyers. However, some owners did not expect to have their home listed for sale for more than a week before it had multiple offers to choose from. Our property management division is now listing homes for rent that sellers just don’t want to sit on any longer. I’m often asked how long it takes to procure a qualified tenant. The answer can vary according to holidays and winter weather. Typically, we secure a tenant in about 7-10 days in the spring and summer. Winter months are still successful, with the average marketing time increasing to 30 days at times. We’re really happy that we can be a resource for agents and clients who need our services to alleviate the stress that can come with a vacant property. If the Trinity Team can help you, don’t hesitate to reach out! Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them! As always, thank you for your business and continued support! [email protected]

What You Should Know About Buying vs. Leasing Commercial Real Estate The Pros & Cons Some businesses start small, in a home office, basement, garage, or kitchen. Many businesses grow to operate out of commercial spaces such as flex/industrial spaces, storefronts, or offices. If you’re launching a new business or expanding an existing one, you may have to decide whether to lease or purchase commercial real estate. There are pros and cons to both leasing and purchasing, so it is wise to review the benefits before making your decision. When purchasing a property, you can either pay cash upfront or finance it with a loan. You could consider a loan guaranteed by the Small Business Administration (SBA) as a first option. The SBA offers two loan programs that can be used for commercial real estate: 7(a) loans and 504 loans. While 7(a) loans are general-purpose loans, 504 loans are specifically designed for the purchase or refinance of commercial property. With a lease, you rent the property for a set term, at which point you must renegotiate if you wish to continue using it. Several factors go into choosing the right strategy for your business, including cash outflows, recurring costs, tax implications, property value, business equity, and more. The following are pros and cons to consider when purchasing commercial real estate.  

First of all, let me remind the readers that I’m not an attorney, nor am I giving legal advice. I’m simply sharing some of the issues that we come across in the world of property management. There are specific procedures we must follow when a tenant declares bankruptcy. Bankruptcy is a federal matter dealt with in federal court (NOT a state matter). The purpose of declaring bankruptcy is to give a debtor a fresh start. When the tenant files a bankruptcy, the ‘automatic stay’ stops all actions from creditors, and we must stop the eviction process. Automatic stays can apply to credit card companies and medical billing as well. Normally, we would be notified by mail of the matter, and everything would be put on hold. It’s not all doom and gloom for the owner/landlord, though. Most tenants don’t want to jeopardize the lease and can exclude someone in their bankruptcy, and of course, this needs to be in writing. Some do continue to pay their rent! Chapter 7 seems to be the most common form of bankruptcy we see in property management. It’s important to have witnesses if you’re having a conversation about a potential bankruptcy or one in progress with a tenant. For detailed legal advice, contact Tschetter Sulzer Attorneys and Counselors at Law. Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them! As always, thank you for your business and continued support! [email protected]

Here’s Where You Could Get a Break By Clare Trapasso May 16, 2022 A year ago, the great majority of American home buyers despaired over the state of the housing market. Prices had hit record highs. There were so few homes for sale that lines for open houses stretched for blocks, and move-in-ready places in desirable areas were receiving dozens of offers, prompting soul-crushing bidding wars. It couldn’t possibly get any worse, right? Wrong! Fast-forward a year, and there are even fewer homes for sale, prices have continued their upward trajectory, and mortgage interest rates are shooting up at a breakneck pace. The result: The real costs of homeownership—the actual payments buyers need to make each month, made up primarily by mortgage and principal costs, along with property tax and insurance—are skyrocketing. And this has severely diminished the buying power of most wannabe homeowners. Someone purchasing the same home today will spend about 1.5 times more on their mortgage bills than they would have just one year earlier. To be clear, home prices alone haven’t risen anywhere near that high. And sellers generally aren’t pocketing that much extra cash through bidding wars. What’s happening is that the higher home prices and rising rates have inflated monthly mortgage payments by about 50% in just one year. Take that increase, then add in the highest inflation rates in 40 years—pushing up the price of gas and just about everything else—and steep drops in the stock and cryptocurrency markets, and many homebuyers are hurting. It’s causing a paradigm shift. Most buyers have traditionally focused on the sticker price of a home (and how much extra they’ll have to offer to get it). But higher mortgage rates can significantly boost the amount homeowners will fork over to their lender. For example, nationally, mortgage payments are about $1,882 a month, not including property taxes or homeowners' insurance. A year ago, they were roughly $1,249. The exact amount depends on where buyers live. That’s why Realtor.com® looked at the increase in mortgage payments in the nation’s 15 largest metropolitan areas. In the Miami metro, buyers’ mortgage payments are 83% higher than they were just one year ago. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.) On the other end of the spectrum, mortgage payments in Detroit were up a still bruising but far less devastating 19%. “We’re already comparing [2022] to a year that was extremely competitive,” says George Ratiu, manager of economic research at Realtor.com. “For first-time buyers, this part is challenging. First-time buyers tend to face much bigger hurdles, from coming up with down payments to being able to qualify for mortgages, all the while still competing with all-cash buyers, investors, and existing homeowners who have more cash to bring to the table.” Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them!  

Trinity Team Property Management has been pleased with the rental assistance program provided by the state. We have been able to direct several of our tenants to the proper information in order for them to secure funds for monthly rent during their time of need. The Colorado Emergency Rental Assistance Program can help cover rent as far back as April 2020. COVID-19 has caused many tenants to fall behind or be unable to pay rent. Tenants who have been unable to pay rent due to financial hardship caused by COVID-19 may be eligible for rental assistance from their state or county. Help can include past due, current, and two additional months of rent up to a maximum of 15 months of assistance. The landlord or the tenant can start the application process, but receiving assistance requires documentation from both the tenant and the landlord. The Trinity Team has been proactive in reaching out to the tenants who were unaware of these programs. This has kept our tenants and their families in the property and has provided our owners with the income they rely on. Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them! As always, thank you for your business and continued support! [email protected]

Here are a couple of points regarding pre-paid/advance rent. We get these questions frequently, so we thought we would share why this is included in your 1099. This information derives directly from the IRS website. Advance Rent Advance rent is any amount you receive before the period that it covers. Include advance rent in your rental income in the year you receive it, regardless of the period covered or the method of accounting you use. Example. On March 18, 2020, you signed a 10-year lease to rent your property. During 2020, you received $9,600 for the first year’s rent and $9,600 as rent for the last year of the lease. You must include $19,200 in your rental income in 2020. Example #2. On December 31, 2021, your tenant pays rent for January 2022. This is advance rent and must be included in your 1099 for fiscal year 2021. Additional updates: A residential landlord (property manager) may not charge a late fee until the rent is late by at least 7 calendar days. The late fee is now capped at $50, or 5% of the amount of the past due rent payment, whichever is greater. This also means we can no longer collect daily late fees. Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them! As always, thank you for your business and continued support! [email protected] *Trinity Team Property Management is not a tax attorney/accountant, and we’re not offering tax advice.

Are You Looking to Expand Your Investment Portfolio to Commercial Real Estate? NOW ANNOUNCING Trinity Team’s new Investment Advisory Division and Investment Club! The Investment Advisory Division is a boutique-style, highly customized service dedicated to maximizing value for commercial real estate investors. Members of the Investment Club will be able to learn, network, and build wealth with Commercial Real Estate. The Inaugural Event will be on Saturday, February 12, 2022, from 9 am to 12 pm, and meetings will be held on the 2nd Saturday of every month. Register today! Oh, by the way. If you know someone who is looking to rent, sell, or buy a property, please call or email us with their information, and we’ll take good care of them!

There are numerous options for investing your money. Owning a rental property in addition to your primary residence can be a way for you to build wealth. You may ask yourself, “What makes real estate a money-making machine?” Let’s talk about everyone’s favorite topic first. Cash Flow Rental income is real money, and it comes in the form of monthly rent. There are, of course, several things to consider when calculating money going into your pocket. It’s not quite as simple as collecting monthly rent and depositing it into your account, unless you own the property free and clear. Here’s an example: Let's say rent is $1500. The PITI is $900. If we subtract $900 from $1500, there’s a profit of $600. Pretty good, right? A great start, but remember a landlord should be prepared to pay for vacancies and maintenance issues. A good rule of thumb is to sock away 5% for vacancy and 5% for maintenance each month. So in this case, the landlord would save $150 per month, bringing the $600 profit down to $450. Property Appreciation Appreciation is another way to make money in real estate. Real estate appreciation is the increase in the investment property’s value over time. A rental property can appreciate while at the same time creating cash flow. Investors need to hold on to the property for approximately 10 years to see significant appreciation. At that time, they have the option to sell and make a notable profit. Keep in mind that location, inventory, and mortgage rates also affect appreciation. You’re the Decision Maker Most people find being the boss an exciting benefit of owning rental property. You alone get to decide which property is a good fit for you, where and how much to spend on a rental property, how much to charge each month, who will live in your property, how to handle maintenance issues, and who will manage the property if not you! Tax Deductions When in doubt, hire a professional who knows accounting with a focus on real estate investing. Preferably, one who invests in real estate themselves. Every expense associated with rental properties is deductible. Keeping a detailed expense report is of the utmost importance, including records of interest on your mortgage, insurance, interest on credit cards used for property purchases, property taxes, maintenance, repairs, and professional fees. You may also be able to deduct travel to and from the rental property, your home office, and legal services. See Nolo.com for a comprehensive list: NOLO Tenants Will Pay Down the Mortgage With every year of owning a rental property, the tenants are paying down the amount you owe on the property. The longer you hold the property, the more of the loan principal your tenants are paying down and the more wealth you are creating for yourself. Take the standard 30-year loan. The entire 30-year loan will have an interest rate that stays the same. At the beginning of the loan, significantly more money is paid to interest than to principal, but by year 15, it is nearly a 50/50 split.  

Is It Better to Sell by Owner or a Realtor? Or maybe the better question is, is it worth doing for sale by owner? The Denver Metro is one of the hottest real estate markets in the country right now. So, with it being such a hot seller’s market, you might be asking yourself if you even need a real estate agent. Well, there is not really a straight answer to this, as there are so many different circumstances that factor into the outcome. I am writing this to help you understand what the best decision is for you based on your situation. Although selling your home by yourself without using a listing agent may seem like the perfect way to save money on commission fees, the statistics show us that most FSBO sellers will ultimately end up regretting this decision. According to the National Association of Realtors (NAR), FSBO sales accounted for only 9% of all home sales in 2020. FSBO sales seem to have been declining over the past decade from a 2004 peak of only 14%. Bottom line, the FSBO Market Share is shrinking. Now, let us discuss some of the more critical aspects of what it takes to sell your home in today’s market. How to Determine the True Market Value of Your Home? With all the apps and websites available to us today, it can be easy to go online and see what other homes nearby have sold for, but are you aware of how a detailed comparative market analysis is accomplished by a professional real estate agent, or more importantly, a licensed appraiser? An experienced Realtor can conduct a unique market analysis that considers not only your home’s location, size, condition, and any improvements you have made, but can also produce an up-to-the-minute indication of how the current market condition affects the sale price of your property. How to Market Your House to Prospective Buyers? Most FSBO sellers believe that all you need to do is put a “FOR SALE” sign in the yard, list the house on Zillow, and the buyers will follow. Unfortunately, the sign just does not work in today’s tech-fueled housing market, and even though you listed online with Zillow, your house is still not really on the market. The FSBO market is more like a wholesale market and will be treated as such. When a licensed agent puts your house on the MLS and syndicates it to hundreds of websites, you are now on the retail market. This is where you will get the greatest amount of visibility to active, interested, and qualified buyers. Should I Hire a Real Estate Agent or Sell Myself? I will say that some FSBO sellers do end up selling their homes on their own. If you are thinking of selling your home on your own, consider a few things, as discussed above, pricing and marketing are important, yet there is so much more. Today, we must consider the health and safety of ourselves and any potential buyers who enter your home. The paperwork, sure, you can attempt this on your own as well, but do you know what it takes to protect that contract and make sure that you get to the closing table? Negotiations, maybe you are in sales, and you are confident, an experienced agent is a consultant, not a salesperson. An agent’s job is to protect your interests and has a fiduciary responsibility to get you the best possible outcome using transparency and integrity along the way as they help you accomplish your goals. Protecting your interests and equity is our highest priority. I can go on and on. By the way, once your home is put on the wholesale market as FSBO, just be aware that most of the calls that you will be fielding are from, yep, you guessed it, real estate agents. This can be a viable source of business for real estate agents as the vast majority of FSBO sellers end up listing with an agent after a fair amount of frustration and lost time. Whatever you decide to do is fine by me, just be prepared. Okay, I am almost done. If you started down this path of for-sale-by-owner, I am sure your intentions were good. You simply wanted to save money, right? Or do you want to net as much money as possible at the end of the day? The data does not lie; FSBO sellers have historically sold for significantly less than similar homes sold on the retail market. If you want to get the highest possible price for your home in a reasonable time frame based upon our current market conditions, give me a call, and I will help you make the best decision for you and your situation. It can put more money in your pocket. If you need to sell your home to buy your next home or not, my team and I can provide you with direction. Consultations are free of charge. Cheers and have a great day! Author: Joe Chavez