Most people think that commercial real estate investing is very risky, best left to the experts. While this to some extent is true, you can buy apartment buildings with low risk. But the potential rewards are still great. Already your first apartment building will add thousands of dollars into your pockets, per month.
It is well known that you can make big money in commercial real estate. But most people automatically stay away from commercial real estate. They think you must have a lot of money to get started and that it is a very risky business. The first statement is completely wrong, it is possible to buy commercial real estate with little money or sometimes even with no money. The latter statement is to some extent true, it is certainly possible to lose a lot of money in commercial real estate. But done the right way, the risks can be small while the potential rewards are great.
Ironically, it is often less risky to borrow money to buy commercial property than buying your own house. Despite the fact that the money in the former case is much bigger. This is because you generally use a company to buy commercial property. Residential homes, on the other hand, are bought in your name. This means that you are personally liable for the loan. If you get into financial trouble and can not keep up the repayments to the bank you could lose the house but still owe the bank money. And you could be forced to keep on paying off the debt for many years to come.
When you use a company to buy a property, the company is liable for the loan. You are not personally liable for the money. This means that if the investment turns out to be a disaster, the company will go bankrupt and the bank will take the building. But your personal wealth is protected. Of course you lost whatever money you put into the deal and into the management of the property. But that is it, you are under no obligation to pay any of the company’s debts. Needless to say, this is under the assumption that nothing illegal has been done. If the purpose of the company was to create fake deals in order to fool banks to lend money, you will be in big trouble.