What is a real estate investment that minimizes risk?

by | 2022-11-06 | Business News

There has been an increase in investment from Japan in commercial properties (office buildings, warehouses, and apartments) in the US. When investing in US real estate, there are many things to consider, such as property research, return on investment (yield), property management (renovation work), tenant management and recruitment, lawyers, accountants, banks, real estate companies, and so on.
In this article, we explain our experience in real estate investment in the U.S., particularly in commercial real estate, and what to look out for.

Investment Goals

It is important to consider what your investment goals are and your investment strategy. For example, we target a 5-year investment, with an investment yield of 0.0% to 6.5% per year, a capital gain of 10.0% to 15.0% of the invested amount after 5 years, and a total yield of 8.0% to 9.0% over the 5-year period.


Borrowing can be up to 70% of the property acquisition value; it is important to establish a framework at the outset, such as borrowing over 5 years, with personal indemnity amortized over 20 years, and with one 5-year renewal.

Real Estate Brokers

The personality of the broker or salesman is more important than the real estate company. In other words, as a matter of course, the responsiveness of the broker or salesman is key when purchasing a property, such as being punctual, quick to reply, responsive even on weekends, etc. When speaking with a salesman, it is ideal if you can ask in detail about his or her past work, and furthermore, if you can confirm reviews from end users.

Inspector before Purchasing

Inspectors are very important. A proper inspector should be hired. The inspector’s survey report should be read carefully and used as a basis for negotiating the acquisition price.

Property Management Company

Acquiring a commercial property is easy, but it is no exaggeration to say that the most important point is the management of the property after purchase. Property management determines whether or not a good tenant will come in, which leads to a snowball effect on expenses. And this will ultimately lead to an increase in the value of the property.

Choice of Lawyer and Accountant

The choice of attorney and accountant is also very important. Since you will need to request a purchase agreement, lease agreement, monthly closing of accounts, preparation of tax returns, etc., you need to be very sure that they provide attentive services.

Bank Selection

The best banks to obtain funds from are those in the city or town where the property is located. This is because such banks are well versed in the economy and real estate trends of the city or town and may be able to offer advice that you would not normally be aware of.

Bank Image


Based on the above, the first step is to consider how to invest in real estate. The first step is to consider the following.

  1. Implement a real estate property management system.
  2. Do not make the wrong entrance – purchase at a fair price.
  3. Ensure an operating margin of 60%.

First, why don’t you consider investing in commercial properties by understanding the whole process?

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