Brook Walsh Real Estate Blog - Real Estate Investing

Loan for Commercial Real Estate

A commercial real estate loan is not the same as a home loan.

Commercial real estate (CRE) is an income-producing property that is only used for business reasons (rather than residential). Retail malls, shopping centers, office buildings and complexes, and hotels are all examples. Commercial real estate loans are used to finance the acquisition, development, and construction of these properties. These loans are secured by liens on the commercial property.

What is the definition of a commercial real estate loan?

Commercial real estate loans are made by banks and independent lenders in the same way that home mortgages are. Commercial real estate is also financed by insurance companies, pension funds, private investors, and other sources, including…

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Depreciation Explained – How It Affects Your Finances

What Is Depreciation and How Does It Work?

Depreciation is an accounting method for allocating the cost of a tangible or physical asset over its usable life or expected life. Depreciation is a term used to describe how much of an asset's worth has been used. Depreciating assets allows businesses to generate revenue while depreciating a percentage of the asset's cost each year it is in use. Depreciation can have a significant impact on a company's profitability if it is not taken into consideration. Long-term investments can also be depreciated for tax and accounting purposes.

important takeaways

• The cost of using a tangible item is tied to the benefit gained over its useful life through depreciation.
• Depreciation can take numerous forms,…

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What Is Illiquid? Understanding Hard-to-Sell Assets

Introduction

Illiquid refers to a stock, bond, or another asset that cannot be sold or exchanged for cash without suffering a significant loss in value. Illiquid assets can be difficult to sell rapidly due to limited trading activity or interest in the issue, as evidenced by a scarcity of ready and willing buyers or speculators to buy or sell the asset. Illiquid assets have smaller trading volumes, larger bid-ask spreads, and higher price volatility as a result.

The polar opposite of liquidity is illiquidity.

• When security or another asset cannot be easily and rapidly sold or exchanged for cash without suffering a significant loss in value, it is said to be illiquid.

• Due to a lack of ready and willing investors or speculators…

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6 Steps to a Successful Commercial Real Estate Transaction

If you ask any real estate specialist about the advantages of investing in commercial property, you'll almost certainly get a monologue on how commercial property is a better deal than residential property. Commercial property owners adore the extra income flow, the cost-saving economies of scale, the level playing field, the plentiful market for excellent, inexpensive property managers, and the potential for a larger reward from commercial real estate.

But how can you decide which homes are the best? What distinguishes the good deals from the bad?

TAKEAWAYS IMPORTANT

• Commercial real estate holdings, like other investments, begin with a solid blueprint.
• Learn how the commercial real estate market differs from the residential real estate…

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Liquidity Explained – The Importance of Cash Access

What Exactly Is Liquidity?

The efficiency or convenience with which an asset or security can be converted into immediate cash without influencing its market price is referred to as liquidity. Cash is the most liquid of all assets.

Important Takeaways

• The ease with which an asset, or security, can be changed into immediate cash without impacting its market price is referred to as liquidity.
• The most liquid asset is cash, while tangible assets are less liquid. Market liquidity and accounting liquidity are the two basic types of liquidity.
• Liquidity is typically measured using current, quick, and cash ratios.

Liquidity: An Overview

To put it another way, liquidity refers to the ease with which an item can be bought or sold in the…

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What Is the Cap Rate and Why Is It Important to a Northern Michigan Buyer?

Capitalization rate (also known as cap rate) is the rate of return on a commercial real estate investment.

While cap rate does not consider the impact of mortgage financing, a general rule of thumb is whether the cap rate is above or below the interest rate. If the cap rate is greater than the interest rate, you’ll generally come out ahead. If the cap rate is lower than the interest rate, you’ll be relying on appreciation for your return, making it a riskier speculative investment.

How to calculate cap rate

The formula for cap rate is simple: income, fewer expenses, divided by the purchase price.

On a long-term rental, multiply the monthly rental rate by the number of months per year you expect the property to be rented. In areas with…

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Investment Property Owners: Trade And Save Money

Did you know you can defer taxes on the sale of your investment or business-use property? It’s called a 1031 exchange, and it could save you a bundle if you’re planning on selling. (Click here to see all Northern Michigan Waterfront Lifestyle Homes for Sale)

Internal Revenue Code 1031 allows an owner to sell their investment or business-use real estate property and use the sales proceeds to purchase a replacement property of like kind without a tax on the profit.

If that isn’t enough, 1031 exchanges are an advantageous way to diversify your assets, improve returns on your investments or just free up more capital for future investments. (Click here to see all Lake Charlevoix Homes for Sale)

But the IRS rules for 1031 exchanges are…

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7 Tips On Real Estate Investing For Beginners

Investing in Northern Michigan real estate is one of the smartest money moves you can make. Whether you are investing in a single-family home for yourself or to use as a rental property or buying multi-family residential property, it’s a stable and safe investment. (Click here to see Northern Michigan's finest collection of vacation rentals)

It’s a smart move to plan for retirement using a mix of different investments, including real estate.

Unlike investing in the stock market, investing in real estate means you always have the physical asset to show for your expenses. Real estate investing for beginners might seem overwhelming, but it doesn’t have to be. Keep reading for 7 tips to help get you started.  (Click here to see all…

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Understanding Michigan Rental Laws: A Complete Guide for Landlords and Tenants

21 Critical Michigan Rental Laws Landlords & Tenants Must Know in 2025

Michigan Rental Laws explained! Discover 21 essential rules every landlord and tenant must understand in 2025 to protect their rights and avoid legal trouble.

Introduction to Michigan Rental Laws

Renting a home or managing a property in Michigan involves more than just exchanging keys and rent checks. Michigan rental laws provide a legal framework to protect the rights of both landlords and tenants. Whether you're a seasoned property owner or a first-time renter, understanding these laws can prevent costly disputes and help maintain a smooth landlord-tenant relationship.

In 2025, Michigan continues to adjust its housing laws to reflect economic changes,…

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Triple Net Lease – A Guide to Commercial Leasing

Triple Net Lease – A Guide to Commercial Leasing: Unbeatable Insights + 10 Tips

Discover everything you need to know about Triple Net Lease terms, costs, benefits, and best practices.

Triple Net Lease agreements are a cornerstone of modern commercial real estate, providing landlords and tenants with clear responsibilities and predictable expenses. In this guide, we’ll explore what a Triple Net Lease entails, its benefits, key considerations, and tips to negotiate favorable terms.

What Is a Triple Net Lease (NNN Lease)?

A Triple Net Lease (often abbreviated as NNN Lease) shifts the major property expenses—property taxes, insurance, and maintenance—onto the tenant. Unlike a gross lease where the landlord covers all operating expenses, under an…

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