There's No Monopoly On Learning About Real Estate Investments

November 27, 2015 | Steve Hable

When I was a kid, one of my favorite games was Monopoly©. According to the game’s website, it’s the world’s favorite family board game. I’ve always played the classic edition, which celebrates its 80th anniversary this year (and no, I didn’t play it when it first came out), but there are many different editions available now: superheroes, princesses, aliens, even one for San Diego. You can play digital versions as well, and don’t forget Monopoly Junior. So something about the excitement of buying and selling real estate continues to fascinate all ages.

While there are countless discussions about how to play, a fundamental lesson of the game is that the player can accumulate capital by investing in real estate that produces income (rent). You, too, can improve your financial condition by investing in real estate without having to own a hotel on Park Place!

Many real estate investors began by purchasing small apartment buildings. With the high cost of home ownership, a majority of the population in San Diego County resides in rental units. Most of the rental units are contained in properties with fewer than 10 units. While these properties have very few amenities such as pools, the smaller properties offer the residents a quieter and more homelike atmosphere. Currently over 99% of all rental units are occupied, which provides the building owner the necessary income to pay for the operating expenses, the mortgage payment and a small return on the investment to the property owners. Most of these transactions will also provide potential tax advantages as well, but consult your tax adviser before investing.

While some small investors have other assets that can be liquidated to meet down payment requirements, there are many investment groups formed by family members or longtime friends. These groups pool their resources and form a partnership or limited liability company to purchase an income property. As with all of these transactions, consult your attorney, tax advisor and an experienced commercial real estate broker. Mission Fed makes Commercial Real Estate Loans from $500,000 to $10 million, in the counties of San Diego, Los Angeles, Orange, Riverside and San Bernardino. When you’re ready to take your interest in real estate from the game board to a more serious discussion, contact the people you know and trust at Mission Fed. We are here to help because your success is our bottom line.

All accounts and loans are subject to approval. Mission Fed is an Equal Housing Lender.

Monopoly is a copyright of Hasbro.

Steve Hable

Steve Hable

Steve Hable is Mission Fed’s 1st VP Member Business Lending and has been in the real estate finance industry for over 30 years. His experience includes all facets of residential and commercial real estate finance, including loan origination, loan underwriting, servicing, secondary marketing (plus establishing private mortgage-backed securities on Wall Street), and property management of commercial properties.

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