Investment Categories

Investment Type Why To Buy Why Not To Buy
Apartment Complex
Multifamily Units
*Best financing options
*Maximum leverage
*Less tenant loss
*Good opportunities to
 purchase nationwide
*Can be a money pit
*Tenant  problems
*Management is critical
*Buy to Buy Newer/Bigger 
NNN Leased
“Coupon Clipper”
*No hassle Investment
*Get Paid Each Month
*No expenses
*Depreciation potential      *Hedge against inflation
*Maybe big down-payment
*Tenant goes bankrupt
*Anchor tenant in a center   relocates
*No ability to raise rents and catch periodic appreciation waves 
Shopping Center
Strip Center
Retail Project
*Less tenant loss
*Typically tenants pay
 reimbursements = more
 cash in your pocket
*Ability to pass through   most expenses.
*Raise rents & catch appreciation wave  *Demographics important
*Tenant loss-cash flow loss
*Broker expenses to lease *Vacancy in a recession
*Management intensive
*Tenants expect tenant
   improvement money.
Office Complex
Office Building
*Stable tenant base
*Hedge on income loss
   w/multi-tentant building
*Downtown locations offer
 great depreciation (high
 improvement to land ratio)
*Expensive tenant improvement
*Exposure to expense hikes may be buried in full service leases; may take longer to recoup added costs, e.g. utilities
Ground Leases *No hassles
*Long term hold (20 years)
*Hold can reap $$ bonanza
*No depreciation.
*No ability to raise rents
*Higher down payment & less leverage possibilities
Industrial Facilities *Low maintenance tenants
*Low cost improvements
*Long term leases
*May convert to retail   and/or housing zoning to benefit from “obsolescence” over time as a city grows
*May have to wait for new tenant during a recession
*Environment issues
*Less depreciation
*Lower improvement ratio
Mobile Home Parks *Cash cows
*Easy management
*Potential to improve by “coaches” upgrade
*Government interference  with rent control (senior issues)
*Potential Depreciation
Mini-Storage Facilities *Cash Cows
*Little Maintenance            *Little Overhead
*Easy Management
*Hard to find
*High desirability
*Subject to development
*Little depreciation

Annette Cooper, Top Ten Keegan & Coppin Commercial Real Estate Agents List, is based in Santa Rosa, CA specializes in 1031 Exchanges.