Monthly Archives: July 2016

INCO Commercial Honored at Long Beach Chamber of Commerce Gala

2016-07-27T12:23:22-08:00

Press Release: INCO Commercial Receives Prestigious Industry Award

A press release issued this morning featured INCO Commercial’s receipt of the distinguished Industry Award.  This, among other certificates of recognition, were presented last month at the 125th Long Beach Chamber of Commerce Gala and 20th Anniversary celebration of the Long Beach Commercial Real Estate Council.  INCO Commercial is proud and honored to be recognized for our efforts in serving and developing the local community!

Click on the link below to read the full press release:

INCO COMMERCIAL Receives Long Beach City of Commerce Industry Award

INCO Commercial Honored at Long Beach Chamber of Commerce Gala2016-07-27T12:23:22-08:00

Benefits of Investing in Commercial Real Estate

2018-12-19T12:43:39-08:00

When people consider investing in property, many limit their scope to single residential properties. However, considering just residential property investment are missing out on a potentially huge opportunity. The income and equity potential of investing in commercial real estate is much larger, despite the risks seeming greater than residential properties. Below, INCO Commercial reviews the different types of commercial properties and the benefits involved for investing in each type of property.

Commercial Real Estate Overview

Commercial real estate (CRE) is any land or properties intended to turn a profit either from capital gain or rental income. When brokers refer to ‘residential’ property, they’re usually referring to single-family dwellings, whereas as commercial properties in California include anything more than five dwellings (units).

Other commercial properties may include retail buildings, office spaces, warehouses, industrial buildings, apartment buildings, “mixed use” buildings, where the property might have a combination or mix of residential, commercial, and industrial. For example, there may be a retail store or restaurant on ground level, while offices or apartments are located on higher levels.

Benefits of Investing in Commercial Real Estate

Across the nation, Southern California is still considered the most strategic place to expand a commercial real estate portfolio. Even foreign investors have recognized the southland’s potential, as an influx of international companies and wealthy individuals from other countries have flooded the market in the past few years.

Though getting into commercial real estate as a novice may be intimidating at first, there are real benefits to investing in CRE properties whether you’re looking to expand your portfolio or are considering various investment options.

Higher Income Potential

Because of the property size and the number of tenants a commercial property can potentially hold, the annual return is much higher than other investments, such as stock dividends, which, on average, yield between a 2% to 3% annual return. The range is much higher for CRE, between 5% and 15%. Multi-family properties or apartment buildings tend to be toward the lower end, with suburban office spaces at the higher end.

Leveraging Increases Cash Flow – Higher Equity Potential

Much of the equity built in commercial real estate is increased through leveraging. Leveraging means using borrowed capital to make an investment, with the expectation that the profits will be greater than the payable interest. In this way, you can put down a small percentage of the purchase price on a particular property, finance the remainder, and go on to invest in more properties in the same way. Real estate leveraging allows you to enjoy a much higher return on investment than buying outright. Commercial real estate leases are also typically more favorable for banks and easier to approve because of the higher likelihood of a stable income flow, as long as they determine you’re not over-leveraging your assets.

More Tenants, Less Risk

In a multiple occupancy building, there is less risk of income loss when it comes to vacancies as other tenants are still contributing to covering your operating costs. This is opposed to vacancies on a single family residential, which equals 100% income loss. Also, since many commercial real estate leases are NNN, tenants are also responsible for the main expenses on the property, in addition to their base rents: Net taxes, Net building expenses, and Net Common Area Maintenance (CAM) fees.

Security Advantage

Unlike stocks, bonds, and other forms of investment, commercial real estate promises value both the land itself and the improvements on the property, such as structures, infrastructure, and landscaping. Additionally, the needs for CRE properties are fairly stable: housing (apartment complexes or mobile home parks), service industries (retail or office space), or storage and production (industrial warehouses). INCO Commercial can help you choose the best location and property within your desired area to maximize your advantage.

Excellent Appreciation Value

Whereas investments like stocks don’t allow for much more than buying and selling based on the market, commercial real estate owners are able to invest in improvements on their properties, as long as regulations are met and necessary local government approvals are secured. A commercial real estate property owner can modernize the property, raise rents, restyle the exterior or interior, or even apply for a zoning change. Inflation can also contribute to the value of existing properties; and while new properties will cost more to develop than older properties, existing locations still increase in value along with the newer local developments.

Need advice on commercial real estate investing? INCO Commercial provides high quality commercial real estate brokerage and advisory services to our clients, with expertise in multi-family housing, restaurant sales, mergers, and acquisitions. We are committed to improving the local community with the best agents and client-centered service we can provide.

Our affiliated companies, CORE Property Management and IMC Municipal Consulting are also ready to work hand-in-hand, depending on our clients’ needs. Core Property Management provides complete or partial assistance in effectively managing your properties to maximize your income potential. IMC Municipal Consulting provides advisory services for real estate and community development, and can help strategically navigate large-scale economic projects in compliance with local laws and environmental codes.

Explore our website, or visit our contact page to see which INCO Commercial office can best serve you.

Benefits of Investing in Commercial Real Estate2018-12-19T12:43:39-08:00

INCO Commercial’s Award-Winning Dedication to the Long Beach Community

2018-12-19T12:43:40-08:00

Discover why INCO Commercial is one of the top commercial and industrial real estate companies in the Long Beach area. Our agents are highly committed to the Long Beach and surrounding areas, each having a longstanding local connection and thus a personal investment in this unique region. INCO Commercial realizes the growth and potential in the Long Beach area, and works closely with the city, developers, and community to ensure everyone’s goals are fulfilled.

Because of this incredible dedication and commitment to the community and it’s development, INCO Commercial was honored at the 125th Long Beach Area Chamber of Commerce Gala last month. INCO Commercial received several awards: a “Certificate of Recognition” from the United States House of Representatives, presented by Congressman Alan Lowenthal; the “Industry Award” from the 33rd Senate District of the State of California; “Certificate of Recognition” from the State of California Senate, presented by Senator Ricardo Lara of the 33rd District and Chair of Senate Appropriations Committee; and another “Certificate of Recognition” from the California Legislature Assembly presented by Mike Gipson, assembly member of the 64th District in Wilmington. A press release will be issued soon with more details and information on these prestigious awards.

Learn more about some of INCO Commercial’s amazing team members in this brief video featured at the gala.

INCO Commercial’s Award-Winning Dedication to the Long Beach Community2018-12-19T12:43:40-08:00

Investing in Raw Land

2018-12-19T12:43:40-08:00

When you’re looking to diversify your investments, consider your options when it comes to raw land. Land is considered ‘raw’ or ‘unimproved’ if there are no man-made changes to the property. An investment on land that is raw is typically solid, especially near a developed area. Whether you are interested in developing, subdividing, or are a land speculator, opportunities will always arise for raw land. Here, we’ll help give you some insight on purchasing raw land. When you’re ready to make a move, INCO Commercial can work with you and help guide every step of the way.

Exploring Your Purpose

What are your subsequent plans for acquiring raw land? Will it sit and appreciate, or will you develop it in the near future? Your answers can determine how this process unfolds. In the eyes of the bank, purchasing raw or “unimproved” land is riskier than purchasing “improved” land. If you need a loan, you may encounter a hesitation on the bank’s part to front the money on raw land since it isn’t actively producing profits (as opposed to a building with businesses that potentially generates income). A larger down payment is not uncommon, as well as a high interest rate on a loan. The lender will likely also want to see a development plan and what your intentions are before approving a loan. However, don’t let these factors alone deter you; land is still considered a good investment because it’s a tangible asset, versus stocks or bonds, for example. It’s also a limited resource, and highly coveted as our populations and developments continue to increase.

It’s also important to consider the logistics of maintaining raw land. For instance you will still have to pay property tax, although on unimproved land, it is typically less than if it has development on it. Other maintenance costs can include upkeep as well as ensuring that there are no overtly dangerous liabilities on the property where people can potentially become injured or worse. But again, that should not be a deterrent and often can be mitigated with something as simple as posting “No Trespassing” signs or creating boundaries.

Surveying the Land

As clichéd as it is, location is always a big factor, whether you choose to develop the land or not. If the property is more remote, road and utility line accessibility should be assessed; even features such as the soil type and grade can be crucial, depending on what your intended use for the property is. Having the land surveyed can help answer all of those questions. It can also help find out if there are any ‘easements,’ meaning that a neighbor or other party is entitled to use part of your land for a specific purpose (i.e., passing through). Different kinds of surveys are available; subdivision survey if you plan on dividing and selling or leasing the land, or have a more comprehensive survey conducted, like the ALTA/ACSM land survey (American Land Title Association/American Congress on Surveying and Mapping). The ALTA Survey can reveal all of that information, including the easements or encroachments on the property.

Be sure to consider even uncommon situations, for example the need for a septic system if the property is too far from the main municipal sewage system. Situations like this could create other obstacles, in this example it would be determining if you have adequate space for a septic system while maintaining enough distance from the water source to prevent contamination. Navigating situations like this is where the value of a great team with experience starts to really pay off.

Remember that unless you have immediate need and/or plans, raw land is often a long term investment. This allows for savvy investors to be strategic with their land purchases. Land within a city or at a city’s edge will increase at a faster rate, but that doesn’t mean that raw land in other areas will not appreciate quickly as well. INCO Commercial can help look into the city or county’s long-term land use plans or scheduled additions, which can indicate any progress or development that may benefit you in the long-run.

Title Insurance & Due Diligence

Title insurance is not mandatory, but it can help ease the minds of lenders, and yourself. Unlike most insurance, which protects you in the event that something might happen, title insurance protects you from things which have already transpired, but aren’t necessarily apparent even to the trained eye. This can include forgeries or fraud on the part of previous owners, or forgotten responsibilities (or previously undisclosed inheritances, etc.), or other errors in previous transactions. Title insurance serves to help you with any legal fees or expenses if the ownership of the property is ever questioned.

Proper due diligence on your part can also save you unexpected costs and headache in the long run with a thorough research on the property and its history.  Here again is where a great team with the right experience can prove to be invaluable. The INCO Commercial team can help with your due diligence efforts to ensure maximum transparency and that you are always acting with the most accurate information possible. For example, the seller’s intentions could give insight on the true value of the property. If the current owner has only possessed the land for a short time or is selling far below market value, it raises some flags; they may know something about the land that they are not readily disclosing. With the right research and information INCO can help you assess all possible situations to help ensure that you are making a legitimate investment.

Our affiliated IMC Municipal Consulting can also work closely with you and provide assistance throughout economic development projects with as little or as much consulting as you need.

If you have any more questions about raw land investments, or any other ventures in commercial real estate, please feel free to explore our website www.incocommercial.com, or contact us at (562) 498-3395 for more information! We are happy to help answer any of your questions.

 

Investing in Raw Land2018-12-19T12:43:40-08:00