Charlotte NC Commercial

by Rob Cassam, CCIM

Main Benefits of Tax Deferred Exchange to Consider

Written May 1, 2019 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Some Benefits Of A Tax Free Exchange

    The main benefit of a tax-free exchange is just that–freedom from a tax. The gain that could be realized by one or both of the principals in the exchange transaction does not need to be recognized at the time of the closing. The gains tax is deferred until the property owner makes a taxable disposition of the new property at some later time…..(more)

    • Suburban Office Buildings

    With commercial real estate investing, suburban office buildings remain many investors primary acquisition target….(more)

    • Office Building Comparisons

    Newer office buildings may fill up at the expense of older office buildings. Since new buildings cost more to build than the older ones, rents may be higher. The actual dollars-per-square-foot costs must be compared, along with other benefits that the tenant may receive, before a final decision is made by the tenant on staying or moving……(more)

    • Strategic ​Management Of Your Investment Portfolio

    When you make your investment in real estate, it is implied that you want to make money. The cash can come from direct income from the property or from capital gains from a sale after an increase in value. Either way, the investment must be managed, considered, and watched at all times. If the owner and manager are taking care of business, there may be ways to increase the income, and the value. There is always the possibility to make a sale for the right price and terms. Keeping aware of the market might bring an opportunity to make a tax-deferred exchange into a property with more benefits for the owner…..(more)

    • Commercial Real Estate Representation

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated….(more)

How To Find and Finance Land For Development

Written April 1, 2019 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Important First Impressions For Apartment Marketing

    A new tenant and an investor share the same impression of an apartment property from the curb. Before marketing apartments, think about the outside appearance. The “look” affects not only an ability to attract prospective buyers, but the rental program as well. First impression by both expected buyers looking and tenants alike are crucial. The following is a checklist of first-impression items that a good property manager must use:…..(more)

    • The Self-Storage Facility Investment

    One in ten U.S. households now rent a self-storage unit. The growing demand for self-storage in the U.S. is created by people moving (some 40 million people move each year according to U.S. Census data), and by various lifestyle transitions, such as marriage, divorce, retirement, a death in the family, etc. Recent surveys of self-storage companies indicate a positive trend in market demand and occupancy rate….(more)

    • How To Find Land For Development/li>

    In major cities, looking for vacant land is difficult. A builder can look for vacant land but also must look for buildings that are in a condition that looks like they are no longer productive. A neighborhood that is in decline might be rejuvenated by tearing down a building and replacing it with a new office building, high-rise shopping center or apartments. Starting with one property might transform several blocks of a blighted area over a period of months or years. If an opportunity like this presents itself, it can be time to get options to purchase adjoining properties. An owner of an old building may be just waiting for an offer of some kind……(more)

    • ​Financing Land For Development

    When an investor purchases land to build on, the next step is land development and financing. “Land development” cannot be precisely defined; generally, it refers to the physical, legal, and engineering processes needed to convert raw land to land (or lots) on which buildings can be placed…..(more)

    • Commercial Real Estate Representation

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated….(more)

Should you own or lease commercial real estate

Written March 7, 2019 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • The Decision To Own Or Lease Commercial Real Estate

    ​​Whatever the kind of property used, the user has the option of purchasing or leasing. Should you buy the house you live in, or lease it from someone else? With few exceptions, there would be an overwhelming response to “own it”. The benefits weigh heavily toward ownership. With business property, the answer sometimes may be a lease instead……(more)

    • Managing A Portfolio of Houses

    ​​​When you think of a large real estate management company, you may think of them managing high-rise office buildings, huge apartment complexes and condominium homeowner associations. They do of course. But you may not think of owners of single-family homes as big management clients. But over the past years, those real estate investors who specialized exclusively in homes have increased greatly. Many people think this is the safest investment of all….(more)

    • How To Obtain Land For Development/li>

    Acquiring land for development is necessary no matter what kind of market we are in. Professional real estate assemblers are always looking at and acquiring under-utilized sites within cities or in suburbs. Here are some ideas on how those professionals do it…..(more)

    • ​Investment Planning- What is Right For You?

    ​​​​​​A prospective investor may have a problem getting started with a real estate investment because of the great variety of properties that are out there. They may be fearful that someone will “sell” them something – something that is wrong for them. An answer to these problems can be an interview with an interested professional real estate broker who can act as a real estate investment counselor. Each prospective investor can be interviewed in depth to find out specific needs in an income property. At the same time their needs are being evaluated, the broker will also communicate what benefits are available in various properties and how to identify them…..(more)

    • Commercial Real Estate Representation

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated….(more)

A Checklist For Apartment Investment

Written February 2, 2019 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • A Checklist For Apartment Investment

    When any particular apartment building is under consideration for purchase, there are a number of factors that should be considered. Here are some of the more important points…..(more)

    • How Adding Value Means Increased Cash Flow

    ​​​Since the value of a rental property is based directly on the cash return, adding value means increasing cash flow. When small investors set out to increase real estate values, the steps are in upgrading houses, duplexes, triplexes, etc., enhancing the cash flow and therefore increasing equity when the property is sold…(more)

    • Condos- Development and Conversions/li>

    ​​​​​Most anything that can be subdivided to be sold or rented can be developed or converted to condominiums. When we say “condo” maybe the apartment might come to mind first. Then, you may think of the commercial office building that was converted to condominium offices. Less common are the other, unusual types of condo developments such as condo parking garages, boat marinas, and other properties that are usually rented. Here are examples…..(more)

    • ​Investment Planning- What is Right For You?

    ​​​​​​A prospective investor may have a problem getting started with a real estate investment because of the great variety of properties that are out there. They may be fearful that someone will “sell” them something – something that is wrong for them. An answer to these problems can be an interview with an interested professional real estate broker who can act as a real estate investment counselor. Each prospective investor can be interviewed in depth to find out specific needs in an income property. At the same time their needs are being evaluated, the broker will also communicate what benefits are available in various properties and how to identify them…..(more)

    • Commercial Real Estate Representation

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated….(more)

Why Options Are Versatile Investment Tools

Written January 1, 2019 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Get Information Before Investing In Apartments

    Apartment properties throughout the country are the most sought after rentals. Assisting new buyers with the purchase of a residential rental is the job of the commercial broker. When you are looking at different properties, we will furnish full information on existing and potential loans, income, expenses, etc., to help you make the right choice.
    …..(more)

    • Insurance Covered By Owners & Tenants

    Insurance coverage must be addressed by both landlords and commercial tenants. For the run-of-the-mill daily problems, a landlord must have the maximum coverage for the building and the tenant’s leases. The tenant must cover the business with coverage that will protect it. What if you have a small disaster that is easily repaired, but you lose a tenant because he was not covered for the damage inside the business? ..(more)

    • Options – Versatile Investment Tools/li>

    An option on real estate is an extremely versatile investment tool that comes in a variety of forms that can be used for a variety of purposes. The primary use of the option is that it gives the optionee (the party holding the option) control over property (in the sense of the right to buy it) for very little cash. It gives the most leverage and conserves cash, both very desirable for investors. An option gives the holder the right to buy a specific parcel of real estate at a specified price, on specified terms within a specified period. An option can be compared to (1) a contract of sale with a liquidated damage clause, (2) a sale with a nonrecourse purchase money mortgage, and (3) a lease containing an option to purchase…..(more)

    • ​Shopping Centers – More Popular Than Ever

    Shopping centers have been changing. Increased spending power in the population is supporting new mall construction and the renovation of existing centers. Now the newer and renovated centers are becoming more mixed use, with hotels and office buildings being incorporated into the plans. Larger malls are providing more than just shopping. We are seeing more cultural attractions, medical clinics, health clubs, spas, and other facilities locating there…..(more)

    • Commercial Real Estate Representation

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated….(more)

Build-To-Suit And Flex Buildings

Written December 1, 2018 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Build-To-Suit And Flex Buildings

    There has been a move on the part of industry to relocate from the cities to the suburbs during the past few decades. The prime reasons were cheaper land costs and a greater amount of labor sources……(more)

    • The Need For the Asset Manager

    The institutional investor has found that income property must be placed under the supervision of professional, experienced and innovative managers. With more property moving into the ownership of institutions and real estate investment trusts, the need for asset managers increases.
    Asset managers have become more important during the past decade for three major reasons…(more)

    • Real Estate Investment Guidance/li>

    Which way is the right way in real estate investments in 2019? What is the future in these investments? An answer to these questions can be an interview with an interested professional real estate broker who can act as a real estate investment counselor. Each prospective investor can be interviewed in depth to find out specific needs in an income property. At the same time their needs are being evaluated, the broker will also communicate what benefits are available in various properties and how to identify them.
    Some considerations should be given to the risk of loss for each age bracket of investor. Should an older investor purchase a property with the smallest down payment and highest leverage position? This will limit cash flow and may cause the property to have a “negative” cash flow. Is this what they want – or do they want cash flow from the property?….(more)

    • ​Good Management System In Apartments

    A good management system efficiently records, reports, and manages income from tenants. A poor system, on the other hand, is likely to increase the amount of work, create tenant conflicts, and reduce the amount of total collections. The income from managed apartments is determined by the actual collection of rents, not by the number of occupied units. A fundamental aspect of effective property management is the rent management system, which enables rents and other income to be billed, recorded, collected and deposited…..(more)

    • Commercial Real Estate Representation

    When you have searched for new real estate investment opportunities, with values that have been changing, you know that finding and evaluating them is becoming more sophisticated and complex. More investors are turning to real estate consultants as a means of providing a sounding board for their ideas as well as expertise in the planning and construction stages for their projects.
    Today’s investor in real estate must have a grasp of market conditions and potential that is usually beyond their own available time to attain. Investors need assurance about the true condition of the market. With increased competition, the market place is becoming more complicated….(more)

How Cash Flows From A Lease Become More And More Interesting Given Their Structure

Written November 1, 2018 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Leased Property—Interesting Investment

    When we write or talk about real estate “investments” it is usually with the idea of ownership of the property. When you own the investment property, the opportunities for profits and cash flow from it are thought of as rent paid by a tenant to the owner. The owner also has a potential profit that can come from the later gains when the property is sold.
    Since the emphasis is on ownership, the average real estate investor might not think about the cash flow and potential profits from a property that is leased rather than owned. However, there are investors who specialize in making profits, sometimes big profits from properties that they do not own.This cash flow from a lease can be extremely interesting. Often the lessee making a huge profit has a relatively small cash investment in the property.If you were the lessee of a building and wanted to make a profit on a possible sublease of some of it, who would your “customer” be?…….(more)

    • High Leverage – A Benefit With Options

    Leverage is the use of borrowed money to control something of value. Real estate investments for many years have afforded the investor some extreme leverage situations. Let’s examine leverage. If double-digit inflation returns, controlling the maximum amount of real estate may be extremely desirable. High leverage is an excellent benefit. Remember though, that with an option there is a problem. Options have an expiration date. If you haven’t gotten the desired increase in value by the time the option expires, you must make the choice – buy the property and wait longer, or let the option expire. An option is simply a contract that gives the purchaser a right to buy a certain property at a certain price for a certain period of time. Sometimes a seller will sell an option to purchase his property because the amount of money paid will solve an immediate problem, and it really does make him feel that the property is sold, or will be sold.
    ….(more)

    • Overall Plan For Land Acquisition/li>

    The acquisition and improvement of land is a large-scale operation and requires large amounts of capital. This has created methods of land acquisition that gives the developer access to and control over a large enough tract to make development economical without requiring an initial outlay of all of the capital necessary to acquire such a tract. From the point of view of the landowner, the disposal of a large tract at a good price may require a formula that will encourage the developer to commit improvement and development money for part of the tract that will build future value into the entire tract…..(more)

    • ​The Future Of Investments

    Which way is the right way in real estate investments in 2018? What is the future in these investments? An answer to these questions can be an interview with an interested professional real estate broker who can act as a real estate investment counselor. Each prospective investor can be interviewed in depth to find out specific needs in an income property. At the same time their needs are being evaluated, the broker will also communicate what benefits are available in various properties and how to identify them. Some considerations should be given to the risk of loss for each age bracket of investor. Should an older investor purchase a property with the smallest down payment and highest leverage position? This will limit cash flow and may cause the property to have a “negative” cash flow. Is this what they want-or do they want cash flow from the property?…..(more)

    • Commercial Real Estate Representation

    There are a number of ways to buy, sell or exchange investment or commercial real estate. Having the knowledge of what you can do in some tax situations can be the difference between an annual profit or loss in a property that you intend to acquire or one that you already have in inventory. The professional commercial real estate broker is in the position to represent clients in real estate transactions by setting up sales, exchanges, leases, purchase and sales of options, and management of real estate. A professional real estate practitioner must stay aware of current tax laws and court decisions in order to structure transactions, but does not give legal or tax advice (unless he/she is also an attorney or a certified public accountant). In any complex transaction that might result in changes in any owner’s legal or tax situation, the other members of the “consulting team” should be the owner’s attorney and CPA. We always recommend meeting with these other professionals during the planning and closing of major real estate transactions….(more)

How to choose the proper lease structure

Written October 10, 2018 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • How to Choose the Proper Lease Structure

    A lease is an integral part of many real estate investments. It should outline all the obligations of the tenant and of the landlord. This sounds simple, but many questions arise. If, for example, property taxes increase, does the tenant pay all of the increase or only part of it? If the property must be modernized, who pays for the improvement? Can the tenant be moved out during the renovation? If the costs of servicing the property rise, should the tenant pay none, all, or part of the increased costs? How should inflation be handled—with automatic rental increases? With increases tied to some index, perhaps the Consumer Price Index?……..(more)

    • Rising Rental Rates Make Apartments Most Popular

    Many investors specialize in picking up run-down properties and renovating them for sale or lease. Profit can also be made in acquiring properties that offer extra land. It is sometimes possible to not only get your money back, but also make a profit on the sale of a remodeled house with a reduced amount of land (assuming the local zoning ordinances will so allow), while holding the additional land for long-term appreciation or building another house or small apartment on it. In addition, many larger houses that might otherwise be considered uneconomical can be trimmed down to accommodate a family seeking more spacious quarters. By reducing the structure’s surplus space, many sprawling houses can be made salable. It is also possible to buy a large house, remodel it to a duplex or more units (with zoning approval) and sell it with a good profit….(more)

    • How To Choose Prospective Tenants For Commercial Centers/li>

    Owners must think about vacancies when checking a prospective tenant. Will the tenant’s business survive? When you have a prospective tenant for a commercial center, you must consider whether that prospect would be a good tenant. There are two key standards to apply; (1) the prospective tenant’s financial stability; and (2) the prospective tenant’s potential for success…..(more)

    • ​How Structure Your Lenders, Property Managers ​To Be A Service Joint Venture

    Whether times are good or bad, lenders always have foreclosed properties in inventory. During a recession the inventory may be high. One of the problems that banks and insurance companies have is disposing of this real estate owned (REO). They are faced with the decision of whether they wish to dispose of the property immediately or hold it for a period of time to hope for an increase in value. They would like to see the value of the REO increase to equal the loan amount……(more)

    • Your Comfort Zone For Loans and Investments

    Each investor has a “comfort zone” about loans. The leverage seeker wants the largest loan that is practical. Others may have experience or training that calls for no loans at all. They must have the property free and clear. Most of us have a loan comfort zone somewhere between these extremes. Nearly everyone accepts the idea of some sort of mortgage. The use of OPM (other people’s money) makes sense….(more)

Why Rising Rental Rates Make Apartments Most Popular

Written September 5, 2018 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Determine Market Value With Appraisal

    The purpose of any real estate appraisal is to determine the market value of the property being appraised. The handbook of the Appraisal Institute defines market value as;
    “The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (a) buyer and seller are typically motivated: (b) both parties are well informed or well advised, and each acting in what he considers his own best interest; (c) a reasonable time is allowed for exposure in the open market; (d) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (e) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”
    If we put this another way, the value of a particular property is made up of the future benefits that the owner of the property can expect to receive from rental or other income. In determining the future benefits that an owner can receive from a property, the current use of the property is considered, and all other uses that it may be capable of in the foreseeable future. As an example, a property that is being used as farmland could be usable for a residential subdivision in a few years, but later might be usable as commercial or industrial sites……..(more)

    • Rising Rental Rates Make Apartments Most Popular

    Many investors specialize in picking up run-down properties and renovating them for sale or lease. Profit can also be made in acquiring properties that offer extra land. It is sometimes possible to not only get your money back, but also make a profit on the sale of a remodeled house with a reduced amount of land (assuming the local zoning ordinances will so allow), while holding the additional land for long-term appreciation or building another house or small apartment on it. In addition, many larger houses that might otherwise be considered uneconomical can be trimmed down to accommodate a family seeking more spacious quarters. By reducing the structure’s surplus space, many sprawling houses can be made salable. It is also possible to buy a large house, remodel it to a duplex or more units (with zoning approval) and sell it with a good profit….(more)

    • How To Control Property With The Least Expense/li>

    In the world of investment real estate, multifamily housing is still the most popular type of real estate investment. Currently, it continues to account for nearly one third of real estate investment transactions. This has been the most popular type of investment because of rising rental rates. Investments in these properties are based on economic fundamentals. Lenders and investors closely scrutinize the financing of multifamily housing projects to be sure that the cash flows will cover expenses. The recession and the poor housing market has changed markets for new homes. But lower interest rates and lower prices have increased demand for new home purchases in some key areas. ….(more)

    • Filling Vacancies In Office Buildings

    Office buildings are excellent commercial properties to own. In certain areas, however, there are still a number of vacancies reported. One of the most important jobs of a leasing agent for a building with available space is to analyze other buildings to see if any tenant could be induced to move. Newer buildings may fill up at the expense of older buildings. Since new buildings cost more to build than the older ones, rents may be higher. The actual dollars-per-square-foot costs must be compared, along with other benefits that the tenant may receive, before a final decision is made by the tenant on staying or moving. Here are some of the items for comparison…..(more)

    • Creative Management Ideas

    Space Sharing Executive Suites- With the revolution in communications, building owners must keep up with the changing needs of the corporate tenant. Often the larger, well-organized businesses do not need the space that was necessary just a few years ago. Computers, faxes and e-mail have substituted for leased office space. Office personal are working from home or a small office near their home and coming into the office once in a while for a meeting. Managers are more willing to grant favorable lease terms to operators of shared space. The operator sometimes receives a monthly management fee for operating the shared space plus a portion of rent revenues over a certain amount. Tenants in an office suite are offered a private office within the suite that has a receptionist, secretarial help, conference rooms and other amenities. This can be a big saving for small space users or users who need a small office for only a short period of time…..(more)

How To Control Property With The Lease Possible Expense

Written August 6, 2018 by
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This month’s newsletter has just been released! Check out the latest tips for tenants and users of commercial real estate space.

In this issue

    • Investing In Apartments – Who Is The Tenant?

    The demand for apartment rentals remains very strong. Although most people favor detached home ownership, many in the population cannot afford a single-family home.
    A new buyer of apartments must think “management”…….(more)

    • Upgrading Properties And The Benefits

    Many investors specialize in picking up run-down properties and renovating them for sale or lease. Profit can also be made in acquiring properties that offer extra land. It is sometimes possible to not only get your money back, but also make a profit on the sale of a remodeled house with a reduced amount of land (assuming the local zoning ordinances will so allow), while holding the additional land for long-term appreciation or building another house or small apartment on it. In addition, many larger houses that might otherwise be considered uneconomical can be trimmed down to accommodate a family seeking more spacious quarters. By reducing the structure’s surplus space, many sprawling houses can be made salable. It is also possible to buy a large house, remodel it to a duplex or more units (with zoning approval) and sell it with a good profit….(more)

    • How To Control Property With The Least Expense/li>

    The Purchase-Option- A purchase-option contract lets the buyer-optionee purchase a property at a specific price within a certain period of time. If the option is exercised, a closing is held and the property is purchased at the price previously agreed upon. There is no legal obligation to buy the property. But, if the optionee does not exercise the option, the deposit paid to the seller-optionor is forfeited. The biggest differences between the purchase-option and direct ownership may be two advantages from the viewpoint of the investor: First, the short term (6 to 24 month) purchase option contracts can be an outstanding way to control property without assuming the responsibilities of ownership. Second, the contract enables the optionee to receive all of the benefits from appreciation in market value of the property….(more)

    • How To Acquire Investment Land

    Land is always at the top of investments by real estate professionals. Before any building project can be planned, the land must be available. At all times, real estate assemblers are looking at and acquiring under-utilized sites within cities or in suburbs. Here are some ideas on how those professionals do it…..(more)

    • The Upkeep On Investment Property

    Keeping your property in top condition is not difficult if it is a continuing effort. There will be a plan in place for making ongoing improvements by investing a portion of each year’s income. Failure to do this will result in a neglected property….(more)