Investing in commercial real estate is a popular way to potentially build wealth. Investment, by definition, is acquiring the rights to something in order to make money. That objective – making money - is something many new investors forget.
They may get excited about “BUYING” something, and in most cases that is multi-family property. A residential rental property is always a potentially good investment, BUT there are many more property types that you can invest in and build wealth, save for retirement, earn higher returns and reach financial goals for you and your family.
Our goal is to engage with potential investors, to work with them to educate and guide them to the types of investments that have the ability to produce profit for them. Founded in 2013, PRI provides years of commercial real estate investing experience.
Our CEO, Pri (Priyanshu Adathakkar) has years of experience in all forms of commercial real estate and real property investment. He leads a team that has the experience to help you avoid issues and pitfalls while providing insights that allow you to make the best decisions for your future.
We remind investors to never lose sight of the fact that commercial investment properties are a long-term adventure. We keep working with them, many times for many years, helping them gain knowledge and find opportunities to grow their wealth.
Fortunately, at PRI, we’re well-versed in helping our clients succeed with commercial property investment.
Perfect RealEstate Investments, LLC is a full-service commercial real estate investment advisory firm.
We create environments for you to make the best investment decision. We do it through expertise, creativity, and attention to every detail — our ingredients for years of success.
is the hypothetical amount an investor would receive without any rental headwinds. Here, it is assumed that the rental property is rented every day of the year, and the renters will pay the agreed amount documented in the lease. For example, if the agreed rent is $1000 a month, gross potential income is $12000
refers to Gross potential income minus vacancy and credit loss. GOI is not the property’s potential income but represents the actual income the property will generate every year.
GOI = GPI – Vacancy and credit loss
is the ratio of the subject property’s price to its gross rental income. GRM is a property valuation method used by investors to value and compare investment properties.
GRM= Price/GPI
is calculated by using the total income generated from a property and subtracting the operating expenses. NOI is a before-tax figure appearing on a property’s income and cash flow statement.
NOI = Real Estate Revenue – Operating Expenses
is the rate applied to NOI to determine the present value of a property. This rate is used to determine the value of appreciation or depreciation of property.
Capitalization rate = NOI/current value of the property.
is a measurement of the cash flow available to pay current debt obligations. The ratio states net operating income as a multiple of debt obligations due within one year, including interest, principal, sinking-fund, and lease payments.
Debt Service ratio = NOI/Total Debt Service.
is a metric that investors can use to calculate the average annual return they have either realized or can expect to recognise from a real estate investment over time, expressed as a percentage.
is a rate of return ratio that calculates the total cash earned on the total cash invested.
Some parts of land can be altered, but the geographic location doesn’t
Land is durable and indestructible (permanent)
No two parcels of land can be exactly the same
While land isn't considered rare, the total supply is fixed
Any additions or changes to the land or a building that increases property value
Once land is improved, the total capital and labor used to build the improvement represent a sizable, fixed investment
Location refers to people's choices and tastes regarding a given area, based on factors like convenience, reputation, and history
When talking about investment in real estate, any or all the types of items above can be included but what you can invest in - “Real Property” - involves the rights of ownership—including the right to possess, sell, lease, and enjoy use of the land. (Real property shouldn't be confused with personal property, which encompasses all property that doesn't fit the definition of real property. The primary characteristic of personal property is that it's movable. Examples: vehicles, boats, furniture, clothing, etc.)
There are specific characteristics of real estate that need to be considered for successful investment:
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