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Sunday, January 1, 2017

Phoenix Commercial Real Estate Investing: The Value of Partnership

Phoenix commercial real estate investing
Phoenix Commercial Real Estate Investing
The most obvious and significant cost of Phoenix commercial real estate investing is the purchase of any property. Properties are hundreds of thousands and typically aren’t paid off for over fifteen years. Despite the steep expense of getting involved in the investing process, many still attempt to go it alone or pull the available family funds to help finance their endeavor. Often, even after that initial funding, most take advantage of the mortgage and loan systems. While this is the most common way to go for the beginning investor, many experts also view it as the wrong way to go.

Debt is risky. Even if the investor has protected themselves with various business structures or legal precautions, when things go south with debt it can still be messy. Additionally, having interest and mortgage payments pulls from the ROI that an investor naturally wants to be high. While opinions and methodologies differ, investors who want to play it safe should do all they can to avoid debt.

Phoenix Commercial Real Estate Investing
Phoenix Commercial Real Estate Investing
So if debt is a bad option, how do you get hundreds of thousands in financing?  The answer is partnerships.  Many people are interested in real estate, but few want to make the jump because they do not know how to get started or what to do once they are in the game. This is a perfect scenario for an investor looking to take on partners. Investors who are confident and have done their homework can team up with those who are not confident enough to make the hard calls themselves.

While having partners sounds like it may hold you back, some arrangements can be made for there to be silent partners. Especially in the relationships where one investor is often taking charge, the others may simply want to sit back and enjoy the monthly checks. Perhaps you are the silent partner and would prefer to find someone to take the lead. Either way, there is no right or wrong template when it comes to partner arrangements, and partnerships can significantly improve the Phoenix commercial real estate investing experience.



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