I am looking to start investing in real estate in nj and my interest is more in commercial property like a shop in some strip mall. Is it even possible to buy shop in strip mall? Or they just rent it. Your advise will be very helpful.
Is is possible but not likely. There a single tenant assets, net leased assets like a Chipotle, or McDonald's but it may be difficult to by just one single shop in a strip center. You can definitely buy an entire center. Keep in mind commercial properties are evaluated based off of their NOI and a CAP rate. There is an inverse relationship with a CAP rates. Make sure to consult with a licensed broker in your area.
The higher the CAP rate, the higher the return and higher the risk, like all investments. And CAP rates vary between asset classes, and vary they even within asset classes based on the quality of the property, length of the leases and financial strength of the tenants. There is much more to it than that, but commercial real estate can be a terrific investment when researched properly.
If you are a beginning investor, a small multifamily unit like a 4 plex could be a good start. Best of luck.
Thanks Gannon and Darren
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