December 13, 2016

Should You Invest in Commercial or Residential Properties?

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , , , , , , , , , , , , , at 12:12 am by Keith Knutsson

Real estate is a great place to invest. One of the first questions I, Keith Knutsson, get asked by potential investors is commercial or residential real estate? There are pros and cons to both ventures, so here are some tips to help you decide which one suits your personality, talents, and goals.

Commercial Real Estate

When most people think about investing in real estate, their minds immediately jump to residential. Commercial real estate has additional benefits however, that can really increase your net worth. The biggest benefits to discuss are more financing options, less competition, and a more favorable valuation.

  • More financing options. While there are plenty of traditional, hard-money lenders to get a mortgage payment from for residential loans, there aren’t a lot of other options for financing. With commercial real estate, there are plenty of other sources, like small private equity firms, joint venture partners, and even other commercial real estate investors you can partner with to raise the amount of capital needed. Access to more money means that you can get a higher rate of return. It’s the adage “spend more to make more”.
  • Not as much competition. For some reason, most people try to make a name for themselves in real estate through the residential route. That means that commercial real estate is an area of real estate with less competition from other investors. This is especially true if you are shopping for smaller commercial opportunities. Most big time commercial investors are going after properties worth more than $5 million, and anything less than that is out of reach for most residential investors. This is a great niche for someone with the work ethic to make a name for themselves.
  • A More Favorable Valuation. The main way that residential real estate is valued is by basing it off square footage, rooms, bathrooms, upgrades, lot size, etc. compared to other homes in the area. This method makes sense for this sector, but it can hurt your bottom line when the market isn’t performing well. With commercial buildings, the valuation is based off current leasing/renting income. In simple terms, the amount of money being generated from the property is how much it is worth. Small improvements and great marketing can increase the value of commercial property easily, unlike in the residential realm. Therefore, it’s easier to make more money from commercial properties.

This isn’t to say that commercial real estate is an easy, definite way to make millions of dollars. If it were that easy, everyone would do it. The main downfalls to investing in commercial real estate are more risks, high costs, and zoning laws.

  • More Risk. Commercial properties see a lot more traffic from customers or residents, parking lots, and possibly multiple businesses running out of one location. Insurance costs are much higher because of all the risks involved with safeguarding against accidents and injuries to any of these people or the property.
  • Higher Costs. While most investors know that the money upfront is going to be higher in commercial real estate than residential, the maintenance bills are also larger. It costs more to maintain professional looking businesses, and repairs have a higher price tag. Just a few examples could include a new roof, multiple furnaces break, one accident causes various damage in more than one apartment in the building. There are all kinds of costs that arise during commercial that are different and require a lot of money as the investor. All repairs must be done professionally too, so there aren’t quick do-it-yourself fixes for these problems. It also costs more to hold on to a vacant office space than a vacant house.
  • Zoning Laws. The government is very interested in maintaining zoning and regulations for commercial areas. Buying a building in the manufacturing area or an apartment building, all the uses you intend the building for is already decided. If you intend to lease the space out to another business, your pool of possible renters is limited. Depending on the city, it is possible to change some of the requirements in zoning, but it requires a lot of work and usually a legal team.

Residential Real Estate

Residential real estate is not a bad way to make money as an investor. There are definitely still benefits to going this route over the commercial arena. The biggest three benefits to going the residential path are more availability, the option to flip, and less money required to get started.

  • More Availability. There are more homes to choose from when you start looking for an investment property. Commercial real estate properties and buildings are not always available, especially if you’re looking in a certain part of town. Even when new residential neighborhoods start popping up, the homes in older neighborhoods are still desired. The turn-around time for houses are much faster, so if you’re looking to find a home in a certain area, one will show up if you wait long enough.
  • Option to Flip. If you want to make money flipping houses rather than holding and renting, you still have that option. You can flip a house, sell it, and be done with it much faster than other real estate ventures. While the money required to do repairs is an issue for some investors, it is usually recouped at selling time, plus a little more.
  • Less money required. A down payment is really all you need to start. While there are more financing options for commercial real estate, to start can be difficult. To buy the first residential investment, you need to qualify for the amount and have a down payment. The qualification process is usually easier because having a renter pay the mortgage payment each month isn’t too hard to find.

There are three fairly well known hardships to owning residential properties as an investor; dealing with bad renters, a variable market, and bringing in property managers.

  • Bad renters. While most people renting a home are going to treat it well, the fact is it isn’t their house. Some people see this as an opportunity to not have to take care of it, and in some cases, trash it. The costs can really add up to fix problems that bad renters can cause. If neighbors start getting bothered by renters, that causes an entire other set of problems.
  • Variable market. Ideally, most investors want to buy when the housing prices are down and then sell when they are highest. This is harder to do though since home prices change slower and less consistently. As a Real estate investor, and CEO of Integrale Advisors LLC, I, Keith Knutsson, see how there are predictable cycles for real estate, but times always vary on how long each cycle lasts. This makes investing trickier because it’s always changing.
  • Bringing in property managers. Managing multiple properties is hard for one person to do. It’s also difficult to be a great real estate investor when you don’t live around the properties and cann’t check on them often. The best way to handle both of these scenarios is to hire a property manager. While this makes life easier for you, it cuts into your profits and requires trusting a lot in someone else.

As you can see, investing in real estate is a great option whether you choose commercial or residential. Knowing your end goals and ability to handle different situations, you have two very different paths to take if you decide real estate investing is right for you.


October 23, 2016

Real Estate Terms Every Investor Should Know

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , , , , at 11:38 pm by Keith Knutsson


If you are interested in investing in real estate, there are several-key terms that you should have a complete knowledge of. These are necessary terms if you want to understand the ins and outs of the property you are looking at to purchase. Both real estate and investing are industries that come with their own specialized jargon. In order to make lucrative purchases, it is crucial to understand the basics related to the industry.

Keith Knutsson explains the key terms to help you make a successful transaction. This is a basic list that will help you get started and understand the bigger picture: Read the rest of this entry »

October 23, 2011

Tips for Investing in Undervalued Property

Posted in Uncategorized tagged , , , , , at 9:56 pm by Keith Knutsson

By Keith Knutsson Undervalued asset investment stands out as a lucrative and viable strategy for gaining maximum return on outlay. In order to do so correctly, one must take into consideration various important factors. Featured below are several tips for investing in undervalued properties with success. – Look for property in areas that are currently undesirable or are evolving. For this you must be willing to look past the negatives of certain locations, and take on a perspective of opportunity and possible growth. Suburbs present great possibilities in this sense because they can change quickly and evolve favorably. – A highly motivated seller is a great indication of an undervalued property; these homeowners are often willing to negotiate and drop property pricing. – Properties that need renovation or improvement also present great investment opportunities because they stand out as undesirable to the majority of buyers. – Short sales and foreclosed properties can prove to be a great find. Work with a real estate professional to identify homes that have been recently listed. About the Author: A specialist in investing in undervalued property, Keith Knutsson leads Integrale Advisors through strategic investments, providing major earnings for a wide range of clients. With extensive experience in both American and European real estate markets, Knutsson retains a unique perspective concerning this distinctive investment strategy. In his free time, he enjoys traveling and speaks fluent French and conversational Spanish, German, and Swedish.

September 16, 2011

Keith Knutsson’s Affiliations with Companies and Organizations in Tampa, Florida, and Beyond

Posted in Uncategorized tagged , , , , at 5:36 am by Keith Knutsson

As Managing Director of Florida-based Integrale Advisors, Keith Knutsson maintains close contact with the Tampa area’s real estate and investment community. He also claims affiliations and advisory roles with numerous companies and organizations. A graduate of Emory University, Mr. Knutsson earned his degree in Business Administration, and still boasts a close connection with the institution as member of Emory University’s Goizueta Business School Alumni Advisory Board. He is currently President of the International Pathways Foundation, which assists college graduates in traveling abroad. This foundational work ties into Mr. Knutsson’s international professional engagements, which have put him into contact with scholarship candidates who share a common commitment to achieving professional goals.

Keith Knutsson additionally sits on Advisory Board for Coast to Coast Real Estate, Inc., a Florida-licensed brokerage that undertakes transactions in commercial properties. His role involves advising on relationships and services offered by Coast to Coast Real Estate to a diverse community of international real estate investors. Mr. Knutsson is closely linked to the Tampa Bay community as a board member of the Inner City Fund. The nonprofit seeks to assist disabled military veterans and first-responders who have put their lives at risk in serving their country. In addition to financial and housing assistance, the organization seeks to prioritize their transport and evacuation in cases of disaster.

Mr. Knutsson serves as an adviser with another Tampa group, Aging Solutions, Inc. This innovative company coordinates care for the elderly through long-term management of required services. These include transportation, health care, legal and financial counseling, employment assistance, and education. Another aspect of Aging Solutions, Inc., is spreading public awareness of guardianship services, which are vital in ensuring that all people in need receive quality representation and advocacy. Keith Knutsson also sits on the Board of Tampa-based Ronald’s Burger Burger, Inc., a new casual eatery concept that has developed alliances with leading U.S. food manufacturers and distributors.