Commercial Real Estate Loans and the Best Housing Markets for Real Estate Investing

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Commercial Real Estate Loans and the Best Housing Markets for Real Estate Investing

p4_img5bThe housing market has definitely made a recovery as seen from these top twenty markets. Consider these tips before delving into this lucrative investment strategy and obtaining a commercial real estate loan.

Business Insider recently came out with a list of the 20 best US housing markets for real estate investing. These areas reported the highest return on investment and an average school rating in the 70th percentile or higher. The average annual returns range from 5.4 percent to 8.1 percent. Here are the top five markets: Hamptons at Boca Raton, Florida; Gladwyne, Pennsylvania; West Bloomfield Township, Michigan; Palmetto Bay, Florida; and Weston, Florida. Don’t feel left out if your west of the Mississippi. North Scottsdale made the list in Arizona and Clear Lake City and Flower Mound made the top twenty in Texas. California’s claim to fame is North Hollywood. Surprisingly, no community in Colorado made the top twenty list.

Colorado did, however, make the 10 hottest real estate markets to watch in 2017 according to Trulia. This list was compiled based upon affordability, low vacancy rates, and strong job growth. Colorado Springs brought them into the fold due to its affordability and job growth. You may be wondering, is now the time to start your real estate portfolio or jump into the fix and flip business? There are a few considerations before you plunge into this lucrative investment strategy and get your first commercial real estate loan.

Real estate can secure multiple streams of income and often outperforms stocks as an investment strategy. It’s also tangible—something you can see and touch. It keeps you in the driver’s seat as compared to stocks that leave you at the mercy of a company you are hardly involved with and the whims of the Big Boys on Wall Street. Now, before you jump in with both feet, consider the following. Watching a full series of Flipping Vegas or Flip or Flop does not make one ready to become a real estate investor. The glamour, high profits and quick turn-arounds are the stuff of Hollywood. Not that it’s not possible, but most real estate investors have spent several years getting their feet wet, so to speak. The best ones are extremely knowledgeable, professional Realtors or contractors, and know their markets.

Where did the Money Come From?

That’s a good question. Oh, wait, it probably came from the network or cash on the barrelhead! That’s a big difference from the many real estate investors that get their start with a commercial real estate hard money loan. No interest payments lead to a lot more profit. In addition, contractors are all too willing to get some free advertisement by lowering their cost in order to get on TV. Unless you have a camera crew following you, make sure you get bids before you try to obtain a loan.

Many fix and flippers get their start with private hard money loans. These are asset-based commercial real estate loans that fund quickly and do not require credit scores in the 700 range.
We don’t want to deter you from your calling, just put a little reality into reality TV. If you’ve done your homework, know the market including comps, understand budgets and construction costs, many in this segment of real estate investing do very well for themselves. Consider getting your real estate or general contractor’s license. If not, you will need to team up with a good real estate agent in order to sell your home. A house sitting on the market will cost you interest payments as well as insurance and taxes, leading to more costs and less profit. Real estate investor clubs can help you find a needed mentor.


Dennis Mortgage Broker ArizonaDennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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