Fielding Investments Discusses Three Different Types of Leases and How They Affect Investors

Property investment advisor Brian Fielding shares that there are three main types of leases that investors should be aware of.

Property investment advisor Brian Fielding shares that there are three main types of leases that investors should be aware of.

When investors start looking into purchasing and renting out commercial real estate to tenants, they need always to be aware that what they see on the Internet is not always the whole story. Brian Fielding of Fielding Investments shares that oftentimes, investors will find a lease that is classified as “NET,” yet it is not specified whether the lease is a “N” lease, an “NN” lease or a “NNN” lease. In order to assist investors in making informed decisions, Brian Fielding is releasing this guide.

  1. Triple-Net Lease “NNN”

The triple-net lease is the most preferred among investors, as it places all of the burden for any and all sorts of problems with the building itself onto the tenant, not the investor(s). These types of leases are in great demand by non-operating investors, as all responsibility for structural damage, taxes, insurance, utilities and more is assumed by the tenant. In addition, the terms of these leases are oftentimes 15 years or more and are generally reserved for larger regional and national tenants. These types of tenants have the experience and knowledge to handle any and all problems that could arise during their time of tenancy, however the investor should be aware that at the conclusion of the lease, the property will be returned in good condition with “normal wear and tear” excluded. This will usually mean that there may be little life remaining for critical portions of the building such as the roof and HVAC systems. The investor should assume that he will have to spend significant money to refurbish and ready the property for a subsequent tenant.

  1. Double-Net Lease “NN”

While still common amongst non-operating investors, property investment advisor Brian Fielding of Fielding Investments shares that the burden for many structural and site maintenance responsibilities will fall to the investor. He recommends that those investing in such properties hire professionals to help establish a budget for capital and repair matters. The projection of such costs is difficult to project and can range greatly depending upon location, number of tenants and a variety of other factors. Investors who own NN and N leased properties and do not live close to the property should seek the retention of someone diligent to oversee the property to protect against tenant abuse and to insure preventative maintenance is done for critical systems. In this type of lease, tenants are responsible for paying certain costs that are defined within the underlying lease. Mr. Fielding recommends that the investor should retain professionals to help budget for operational and capital expenses and have an accountant help prepare a budget for both the expected and “surprise” costs he is likely to encounter from year to year. This budgeting process may also allow the investor to accrue for such expenses in reporting to the IRS.

  1. Single-Net Lease “N”

While not entirely descriptive of the lease conditions, the term Net suggests that the tenant has limited responsibilities in the maintenance of the structure and various elements of the property. This type of agreement is often most successful with experienced property owners who have the talents and knowledge to address a variety of issues that befall any property. Many N lease owners are either able and willing to do their own repair work or have access to both handymen and specialists who can oversee the maintenance of critical systems [i.e. roofing, HVAC, masonry] professionally.

  1. Gross Leases

It is not uncommon to find governmental agencies and other large entities seeking Gross or Modified Gross lease commitments. Landlords are expected to have access to services such as janitorial needs and garbage collection and provide for those needs as part of their lease obligations. Mr. Fielding recommends that this sort of business should be reserved for the more experienced investors since there is a great deal of management and oversight required of the landlord. Further, tenants who seek gross leases are often more demanding in nature, and expect the landlord to be available immediately for even the most minor of maintenance issues. A casual investor who plans to travel or enjoy activities away from his home/office will likely not be fully comfortable with leases of this sort.

 For more information about any of these types of leases as well as for more information about commercial real estate investment, visit http://brianfielding.com.

It's only fair to share...Tweet about this on TwitterShare on TumblrShare on StumbleUponShare on RedditShare on FacebookPin on PinterestShare on LinkedInShare on Google+Digg thisEmail this to someone
Read More

Brian Fielding Shares 5 Pieces of Advice for Those Wanting to Invest in Commercial Real Estate

Brian Fielding of Fielding Investments reveals some of the most important aspects and things to consider when investing in commercial real estate.

Brian Fielding of Fielding Investments reveals some of the most important aspects and things to consider when investing in commercial real estate.

Commercial real estate can bring in big returns, but it can also cause huge losses. The difference between the two is having the knowledge and the experience to make a good investment. While not everyone has 40 years of experience like Brian Fielding of Fielding Investments does, they can follow his advice with these five tips for commercial real estate success.

Don’t limit oneself to residential offerings.
There is a whole world of commercial real estate investment opportunities that are not simply homes or apartments. From office space to industrial hangars to mobile home parks and retail buildings and beyond, commercial real estate is a varied industry with so much to offer. If an investor does not have experience in these areas of the industry, it is prudent to partner up with someone or find a mentor who does.

Build relationships in the community.
Having good relationships and a foundation of well-placed connections are important assets in the commercial real estate world shares Brian Fielding of Fielding Investments. Having lots of contacts means having lots of potential partners who can complement an investor’s talents and possibly help finance their ventures.

Have a source to get questions answered.                                                                                                                                         When an individual is starting out in commercial real estate, they are likely to have many questions. Without the proper source of knowledge, they can make mistakes that would otherwise be easily avoided. The evaluation of properties, the types of calculations that need to be made and more are important parts of a successful commercial real estate venture that hinges upon having the correct information. Similarly, a prudent investor should have a good attorney and insurance broker and have access to individuals with expertise in the various elements of construction.

Having a partner is sometimes key.
Having a partner in the commercial real estate industry can oftentimes be a great advantage shares Brian Fielding of Fielding Investments. It is unlikely that one person will have all of the money and expertise necessary to evaluate and purchase certain assets. Investors should be prepared to share in both their success and exposure. Doing so might limit the return on one outstanding investment, but success usually breeds success and partners (as well as those that want to be) will take notice of the individual’s activities and be eager to join with them in future investments.

 Understand the math.
There are specific measures that quantify one’s return on an investment in commercial real estate. Not only will knowledge of formulae such as ROI, Cap Rate, and IRR help the investor to better understand the value of a prospective purchase, but these terms will be important to all commercial lenders. Spend the time to learn the terminology of the industry, as it will help establish credibility with sellers, brokers, lenders and other professionals who could be important factors in the success or failure of a venture.

For more information about the commercial real estate industry, or for answers to some of the most common questions that people ask about commercial real estate, visit http://brianfielding.org.

It's only fair to share...Tweet about this on TwitterShare on TumblrShare on StumbleUponShare on RedditShare on FacebookPin on PinterestShare on LinkedInShare on Google+Digg thisEmail this to someone
Read More

Brian Fielding Presents Tips for Maintaining Commercial Real Estate Properties

As commercial real estate owners look at the rest of the year, they want to make sure that it is one that is prosperous. One of the best ways to ensure that they are able to do this is by ensuring that the property they have so carefully chosen and invested in is well-managed.

Whether an owner is a tenant as well or if they own a property that is exclusively rented out to other parties, there are many steps that they must take in order to make sure that they are properly caring for both the property and the tenants. To help these investors, especially those who are facing their first year as commercial real estate owners, Brian Fielding offers some suggestions for how these owners can maintain their properties. 

  1. Update all leases: Brian Fielding shares that it is essential an owner have current lease agreements with all of his or her tenants. Extensions should likewise be kept current. Owner operators should also have a current lease agreement with themselves when they are one of their many tenants as this will help them stay consistent. Though their own rent goes back to themselves, they should still have their own guidelines and agreement as a tenant in the building in writing to help them with their operations.
  2. Take note of key dates: There are many deadlines and key dates that the owner of a piece of commercial real estate must keep track of. They must know when leases with their tenants come to an end, when payments are due, and other important information. When owners are not aware of these dates and when exactly they are coming up, they may neglect important deadlines. That is why Brian Fielding recommends that each investor takes careful track of these dates.
  3. Track utilities: Some states, such as California, are now requiring that large commercial properties report their energy usage to the state. When an owner of a piece of commercial real estate is not the tenant, and thus cannot track their usage through their utility bills, they must find other ways of keeping track of this usage. Mr. Fielding shares that it is important that owners and tenants stay in touch to make sure that this information is easily accessed when it is needed.

When investors take advantage of advice from Brian Fielding and Fielding Investments, they are sure to maintain their property correctly to make sure that they find success. For more information on the best practices of buying and managing a piece of commercial real estate, visit www.brianfielding.com/

It's only fair to share...Tweet about this on TwitterShare on TumblrShare on StumbleUponShare on RedditShare on FacebookPin on PinterestShare on LinkedInShare on Google+Digg thisEmail this to someone
Read More

Brian Fielding of Fielding Investments Reveals Essential Information for Purchasing Commercial Real Estate

Brian Fielding shares some basic knowledge of the commercial real estate market.

Brian Fielding shares some basic knowledge of the commercial real estate market.

When an individual or company is thinking about investing, they need to consider the options before them. Many investors who would like to invest in the real estate market usually gravitate toward residential real estate. Residential real estate tends to be more familiar territory, and more sentimental, which draws in many interested investors. However, Brian Fielding of Fielding Investments shares that investing in commercial real estate also has its advantages, and right now, with the market prospects showing strong signs for the rest of the Year, it is an optimal time to consider the advantages of commercial real estate. However, before making a purchase, utilize this knowledge about the market and this compelling comparison of the residential and commercial real estate from expert Brian Fielding.

  1. Commercial real estate is generally more financeable: When investing, it is important to remember that a commercial real estate transaction is viewed very differently than a residential real estate one.  Commercial assets are not only financeable with traditional lenders; there are a wide variety of other sources such as insurance companies that are eager to hold a security interest in quality commercial and retail properties. Further, one can expect to be able to obtain greater leverage from those lenders if the tenant base is well credited. In fact, it is not unusual to find lenders who will consider non-recourse [no personal guarantee other than for traditional carve-outs] and financing of up to 70 -80% for assets that have strongly credited tenants with long term leases.
  2. Commercial real estate historically tends to be more profitable: In most cases, when an individual invests in residential real estate, they are renting to individuals who are likely not sufficiently financially strong enough to purchase their own home. Commercial real estate, however, has potential for a much broader range of tenants including many that are very creditworthy. A building with multiple retail, industrial, and office spaces allows for a greater diversity of tenant mix. The loss of a single tenant does not impact the investor as seriously since that loss will be only a fraction of the property’s total income.
  3. There are several factors that determine value: While the basic maxim of real estate, “location, location, location,” applies to both commercial and residential property, commercial assets are more easily valued and financed than the somewhat equivalent residential property. Most lenders are willing to establish value and finance accordingly based on recognized indices such as cap rate and internal rate of return when considering commercial assets.

With knowledge of how commercial real estate is different from residential real estate, and what factors need to be considered when investing, Brian Fielding and Fielding Investments know that investors can make informed decisions about how, when, and why they should invest. For more information on real estate investment visit http://fieldinginvestments.com/.  

It's only fair to share...Tweet about this on TwitterShare on TumblrShare on StumbleUponShare on RedditShare on FacebookPin on PinterestShare on LinkedInShare on Google+Digg thisEmail this to someone
Read More

Brian Fielding Shares Best Cities for Office Space Investments in 2015

 

Brian Fielding Space Investments in 2015

 

There are many different types of commercial real estate properties that an investor may consider when they are looking to make a purchase that will offer them a profitable return. Brian Fielding of Fielding Investments knows that commercial real estate is always a good investment, but when an individual is starting in or trying to grow in the market, they should focus on one kind of property and learn through experience to be successful managing such a property before they begin to invest in other properties. One of the most desirable property types in commercial real estate is office property, and when an investor is looking for a space to purchase, they should consider the strongest markets for the property type. Here, Mr. Fielding discusses some of the best areas to own office spaces in the coming year.

  1. San Francisco: Brian Fielding reveals that this city has always been a good choice for office spaces, but this year especially it is experiencing very fast employment growth in office related jobs. Additionally there is a high level of new construction projects being conducted in the area as well. Vacancy rates for office spaces are very low and the rent for office spaces is high. San Francisco properties may be more costly than properties in other areas, but these appealing factors still make it a profitable choice.
  2. Pittsburgh: This city has regained over 200% of the office jobs that were lost in the recession leading to a high demand for quality office spaces. Additionally, there is a shortage of these quality spaces in the city so when an investor is able to get such a property, they will face low vacancy rates.
  3. Boston: This city is benefiting from many of the same positive trends that other cities are seeing. However, it is also a good choice for investors because the initial investment for these properties is usually lower than it is in other top cities. There is low competition over quality properties as well so investors are better able to find the best properties to fit their own needs.

When investors are looking for the perfect property to purchase, they must look in the areas that are sure to give them success. The cities listed here by Brian Fielding of Fielding Investments are sure to offer investors a variety of quality properties to choose from and desirable market advantages. For more information go to http://www.brianfielding.com/.

It's only fair to share...Tweet about this on TwitterShare on TumblrShare on StumbleUponShare on RedditShare on FacebookPin on PinterestShare on LinkedInShare on Google+Digg thisEmail this to someone
Read More

Brian Fielding Offers Advice on Switching from Residential to Commercial Real Estate Investments

Understanding the differences and value propositions between real estate types

For those who are interested in commercial real estate but are used to the residential real estate market, Brian Fielding offers some advice on the market differences.

Many individuals have been through the process of purchasing a piece of residential property. Even those who are not professional investors have gone through the search for their own homes. Because of this, Brian Fielding knows that those who are exploring commercial real estate investments can often be confused by their familiarity with the residential market, and that this familiarity can influence the way that they behave when looking at commercial properties. To help investors better navigate the commercial market, Brian Fielding offers some key advice.

Think about different property types: Residential properties are limited to houses, but commercial properties are varied. Office spaces, apartment buildings, warehouses, retail spaces, and undeveloped property can all be considered commercial real estate. Those who are getting involved in commercial real estate should consider each type of property and its differing factors before they begin searching for a purchase. Once they choose the type of property that they want to invest in, they should also be sure that they learn all they can about it.

Know an upfront time investment is required: Brian Fielding reveals that it will take quite a bit more time to purchase a commercial property than it does to purchase a residential one. Because properties are more diverse, and because there are so many factors to consider, it usually takes a lot longer for an investor to find the right property. Negotiating the purchase and getting financing can also take some extra time.

Be prepared for differences in financing: Because commercial properties almost always require a higher investment than the average residential property, there are some significant differences in obtaining a loan to buy the property. First of all, the down payment on the property will be higher. Additionally, there will be different qualifications for loans. Mr. Fielding knows it is important that investors research and understand these changes and that they seek funding before they begin looking at properties.

Once an individual investor understands the ins and outs of commercial real estate investments, it will help them better comprehend the way that they interact in the market. Knowing the differences between residential and commercial real estate will also help these investors make smarter decisions about the properties that they buy. For more outstanding commercial real estate advice from Brian Fielding and Fielding Investments visit http://brianfielding.com/.

It's only fair to share...Tweet about this on TwitterShare on TumblrShare on StumbleUponShare on RedditShare on FacebookPin on PinterestShare on LinkedInShare on Google+Digg thisEmail this to someone
Read More

Advice for Managing a Commercial Real Estate Property from Brian Fielding

Commercial Real Estate lets entrepreneurs open up new business avenues

Brian Fielding often encourages investors to look at the benefits of commercial real estate when they make an investment.

Commercial real estate is a great investment that often leads to a worthwhile return. However, when investors want to make sure that they continue to see their property stay successful, and they must make sure that they have happy tenants, there are things that they must do each year. To help investors keep in mind these steps offered here, they should be sure that they properly manage their property.

  • Conduct annual maintenance: There are a variety of things that should be done to a property at least once a year. Brian Fielding suggests that companies start planning for these repairs and updates early in the year so that they can schedule them appropriately. Some of the annual fixes and repairs that they should keep in mind are roof repairs and air conditioner maintenance.
  • Pay attention to zoning: Zoning changes may impact the uses of a commercial real estate space. Brian Fielding shares that these changes are especially hard on those who have vacancies as zoning changes rarely hurt current tenants but may limit who can be allowed to take up an empty space. Zoning laws may additionally add uses to a property that could help the owner. Knowing these laws and what they may change is essential.
  • Meet with tenants: Knowing what a tenant’s needs are and being able to suit those needs is essential for every landlord or property owner. If, for example, a company is looking to expand or downsize, they may be looking for a new space. Meeting with them to know these needs will help a landlord and the tenants work together to meet those needs instead of the tenant wanting to go elsewhere. It is for this reason that Mr. Fielding wants to make sure that individuals make the time to meet with the tenants of their commercial spaces.
It's only fair to share...Tweet about this on TwitterShare on TumblrShare on StumbleUponShare on RedditShare on FacebookPin on PinterestShare on LinkedInShare on Google+Digg thisEmail this to someone
Read More