It’s often debated whether a capitalist world can truly go green. If you have the time and money to develop green commercial real estate (complete with green hosting servers), then our planet could see a greener future. But is it possible to invest in commercial real estate with no money?
Yes, there are plenty of ways to finance green commercial projects before you have a significant amount of cash flow. If you manage your developments properly, you can invest even more.
How to Manage Green Commercial Property Development
It can be intimidating to invest in or develop a commercial property for the first time. Your first purchase could make or break your operation. However, you can mitigate risks while improving your return on investment (ROI) by using real estate development software like Northspyre.
As you start developing and investing in more real estate properties, you’ll be able to draw a data-backed conclusion on what works (and what doesn’t). Once data starts to drive your decision-making process, you’ll start to achieve predictable outcomes for all of your projects.
Not only will software eliminate errors caused by complex formulas or spreadsheets, but you’ll also have more time to spend on the parts of development that earn you the most money.
How to Start Investing in Green Commercial Properties
Whether you’re looking to invest in or develop a commercial property, there are plenty of ways to build a solid portfolio with little money.
Here are 3 ways to finance your commercial projects.
1. Commercial Property REITs
A real estate investment trust (REIT) describes a company that invests in all sorts of real estate types, from homes to businesses. While REITs are often associated with residential properties, like homes, you can absolutely invest in commercial property development using REITs.
REITs invest in all commercial real estate types, such as hotels, office buildings, and storage facilities. But you have to watch out for high fees that typically come from upfront sales loads.
If you’re someone who wants to become a commercial real estate developer but you don’t have a lot of cash flow, time, or knowledge of the market, REITs can help you dip your toe in. As a highly liquid asset, publicly traded REITs can be sold on the stock market when convenient.
2. Loans and Hard Lending
Hard money lending is the best way to fund a commercial property development project with little money. After all, you’re not going to find commercial assets for cheap. Unfortunately, hard money lenders often have strict payment schedules that ask borrowers to pay up quickly.
Unless you can come up with thousands of dollars in a 6 to 24-month period, consider taking out a commercial real estate mortgage, working capital loan, line of credit, or a demand loan.
Alternatively, you could convince the land or building owner to consider seller’s financing. With seller’s financing, the owner finances a portion of the purchase price. You’re required to pay that amount back over a period, which can be negotiated when you both set your financing terms.
3. Commercial Crowdfunding
Crowdfunding is the practice of funding a project by raising money from multiple people at once. While commercial real estate crowdfunding sites aren’t a new concept, new laws have allowed non-accredited investors to take part in the action for the purpose of building their portfolios.
If you’re interested in green properties, you can search for green projects specifically. There are plenty of options to choose from because green developments see a high capitalization rate.
Commercial crowdfunding websites, like Fundrise, give low-income investors or developers the option to get in on the ground floor. Fundrise specifically allows non-accredited investors to spend a minimum of $10 on plenty of commercial opportunities at every stage of development.
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