From Dom’s Desk: Growing with the Times
Investing can be a truly scary thing, especially considering today’s market conditions. However, there are ways to mitigate your risks and position yourself in an advantageous spot despite the many challenges presented by investing in the real estate scene. At InvestPlus REIT, we take years of experienced backed by numbers and data into consideration when making investment decisions. These have allowed us to grow even during the pandemic—not an easy feat given the global challenges all businesses and markets were, and still are facing!
How were we able to do this?
We knew that industrial real estate was the next big thing way back in the day. Back in 2012, Domenic Mandato (CEO of InvestPlus REIT) had discussions with real estate investors who first introduced industrial real estate to him. That was when the seed was planted, but it wasn’t until 2017 that he positioned himself in that market. Industrial real estate isn’t governed by the same factors as residential or other commercial real estate market conditions. Because of this, it can stay in demand for the long-term.
The ecommerce boom placed a lot of pressure on commercial space. Opportunities for a business’s growth can often come from the birth of other circumstances, in this case, the legalization of marijuana and the rise of ecommerce. Investors in this market need buildings to grow multiple crops, and with industrial real estate properties, they are able to do so. The demand for space is there—it still is! And since the government takes a long time releasing land, being in a position where we can rent out industrial real estate properties puts us in an advantageous point. Acquiring in times of uncertainty can position you where there might be opportunities!
Last but definitely not the least, the InvestPlus REIT’s team’s expertise, strategy and talent paired with marketing and technological support has definitely contributed to the continuous growth of our company. We are very grateful for the people we work with in making this dream possible—for our business and for others!
REITs and the Future
While predictions always come with their own risks, we are able to take calculated risks by looking at the numbers because at the end of the day, numbers do not lie. We always consider: “What is the rental income for this property?” and determine the yield and cap rates because value comes down to that. We have seen a big trajectory in acquisition in the last two years, even buying in the middle of the pandemic. It is important to note though that InvestPlus is very selective when it comes to acquisition, taking cap rates, interest rates, and sellers’ expectations all into consideration. Some investors refinance properties. In our case, most of our portfolio is locked in with half of the interest rates today, and mortgage will come up at about 2025, and given the tumultuous market where the value of properties drop and interests rise, more investors are considering diversifying into REITS.
For anyone looking to diversify their investment portfolio, REITs allow them to do that with rules set in place that protect the interests of the investor. These rules include but are not restricted to: always having a board and the investors getting paid with 90% of REIT cashflow that the company produces. Because of this and other rules firmly set in place, there is safety, stability, strength, and protection when diversifying one’s investments with REITs.
These are just some of the reasons why REITs have performed so well in the past 20-30 years, and why it will continue to have an edge over residential and/or other commercial real estate properties.