Ofir Ventura - How to Make High Return on Commercial Real Estate Investment: Experts' Perspective.

 

Ofir Ventura Las Vegas
As a commercial real estate investor, you can increase your returns and pocket tax-free cash by using leverage and refinancing. This benefit is only one of the reasons why investing in commercial real estate often comes out on top when measured with other types of investing.

Leverage is the application of borrowed funds to complete an investment transaction. The higher the percentage of borrowed money utilized to invest, the higher the leverage and, thus, the lower the amount of equity needed.

Ofir Ventura , a successful commercial real estate investor, based in Las Vegas, gives examples of how leverage works for you:

Magnify Your Gains in Price with Leverage

Suppose you buy a $100,000 property. You borrow $800 and put $20 down. During the following five years, the CPI advanced by fifty percent. But, your property lagged behind the CPI by just increasing 25%. Your real wealth dropped? No, it grew. The $100.000 property is now worth $125,000, so your equity has increased by $45.000. You have more than doubled your fund when inflation has just risen your $20,000 to $30,000.Commercial real estate investing builds wealth as it grows acorns into free and clear properties worth many times the original amount of cash supported.

 Magnify Returns from Cash Flows with Leverage

Conventionally, investors do not just enlarge their equity gains from leverage; also, they expand their rates of return from cash flows of 7.5 percent without financing. However, if you finance $800.000 of that $1,000.000 procurement value at, say, three decades, 5.75% interest, you invest only $200.000 in cash. Your income equals $75,000, and your yearly loan payment will total $56.000.

 Refinance to Pocket Cash without Paying Taxes

This happens when a commercial real estate investor replaces their current financing with new financing. For instance, after ten years, your $1,000,000 property is now $1, 500,000. You have paid down your mortgage balance to $650,000. Your equity has increased from $200,000 to $850,000. You get a new 80% loan-to-value ratio mortgage of $1,200,000. But, Ofir Ventura Las Vegas recommends that you not spend that fund and reinvest it. Buy another property. Now you owe higher monthly loan payments on your initial property, and your cash flows from which property will reduce.

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