wasn't yours and it came from someone else (depositors, investors, etc.)! So on the face of it, between the down payment and the loan, you can easily acquire an interest in commercial real estate without using a cent of your own money!

But wait, there's more! Did you realize that your tenants are p

I was contemplating the economy, increasing interest rates, slowing real estate sales, and the possibility of us being in a real estate market "top" when I thought about how to protect myself against a potential fall in prices. My best choice for making an investment that would make sense in this environment had to be commercial real estate. Before I get to why, let me introduce you to an interesting extension of a concept long used in investment real estate: Other People's Money (OPM). I would have asked Killer, my 21-year-old-real-estate-guru-wondercat to explain this, but he was taking another nap (wouldn't you, if you were his relative age???).

We all understand the basic OPM approach for investment property: Get some investors together, pool their money, buy a property together, and get a piece of the action for selecting and managing the property. This is a time tested method for growing a portfolio of commercial properties and a (nearly) passive income stream.? But this is not the only aspect of OPM in commercial real estate.

Have you stopped to consider that the real estate loan you get from a lender, be it a bank, insurance company, conduit, or private source, is also OPM?? You should - it wasn't yours and it came from someone else (depositors, investors, etc.)! So on the face of it, between the down payment and the loan, you can easily acquire an interest in commercial real estate without using a cent of your own money!

But wait, there's more! Did you realize that your tenants are pr

ent had to be commercial real estate. Before I get to why, let me introduce you to an interesting extension of a concept long used in investment real estate: Other People's Money (OPM). I would have asked Killer, my 21-year-old-real-estate-guru-wondercat to explain this, but he was taking another nap (wouldn't you, if you were his relative age???).

We all understand the basic OPM approach for investment property: Get some investors together, pool their money, buy a property together, and get a piece of the action for selecting and managing the property. This is a time tested method for growing a portfolio of commercial properties and a (nearly) passive income stream.? But this is not the only aspect of OPM in commercial real estate.

Have you stopped to consider that the real estate loan you get from a lender, be it a bank, insurance company, conduit, or private source, is also OPM?? You should - it wasn't yours and it came from someone else (depositors, investors, etc.)! So on the face of it, between the down payment and the loan, you can easily acquire an interest in commercial real estate without using a cent of your own money!

But wait, there's more! Did you realize that your tenants are p

dn't you, if you were his relative age???).

We all understand the basic OPM approach for investment property: Get some investors together, pool their money, buy a property together, and get a piece of the action for selecting and managing the property. This is a time tested method for growing a portfolio of commercial properties and a (nearly) passive income stream.? But this is not the only aspect of OPM in commercial real estate.

Have you stopped to consider that the real estate loan you get from a lender, be it a bank, insurance company, conduit, or private source, is also OPM?? You should - it wasn't yours and it came from someone else (depositors, investors, etc.)! So on the face of it, between the down payment and the loan, you can easily acquire an interest in commercial real estate without using a cent of your own money!

But wait, there's more! Did you realize that your tenants are p

lio of commercial properties and a (nearly) passive income stream.? But this is not the only aspect of OPM in commercial real estate.

Have you stopped to consider that the real estate loan you get from a lender, be it a bank, insurance company, conduit, or private source, is also OPM?? You should - it wasn't yours and it came from someone else (depositors, investors, etc.)! So on the face of it, between the down payment and the loan, you can easily acquire an interest in commercial real estate without using a cent of your own money!

But wait, there's more! Did you realize that your tenants are p

wasn't yours and it came from someone else (depositors, investors, etc.)! So on the face of it, between the down payment and the loan, you can easily acquire an interest in commercial real estate without using a cent of your own money!

But wait, there's more! Did you realize that your tenants are providing a stream of cash from which you pay the expenses, make repairs, or service the debt?? In the final analysis, commercial real estate and other investment property are nothing more than a glorified bond - a series of regular payments. In this case, the bond happens to be made of sticks and bricks! But once again, the money you are receiving from your tenants is OPM. The important point here is that as you grow this income stream over time, your property's value should also be increasing. But even if your investment property goes down in value, you'll still make money!

Hang on, because there is one more source of OPM to consider before I prove you win even if you lose. It's called -depreciation. I know that you just went "huh." So please, let me explain. Our tax code allows us to pretend that a piece of real property "wears out" over time (well, it does - but that's another topic for another day). This wearing out is based upon a formula and in its simplest form allows an investor to reduce the original value of the improvements (not the land) by about 1/27th per year. We debit this amount against any net income the property might earn and it ends up sheltering some of this income from taxat