FCR Investments

Which would you rather have: An apartment that returns 4.4% and that is a headache to manage or a Starbuck's or Burger King that returns 6%-8% and has the vast majority of the headaches taken care of by the tenant?

If you own small to mid-size apartment buildings in the Bay area, you could do substantially better. We can put you into a single tenant, triple net investment that will remove most of the headaches associated with apartment ownership . . . AND the cap rates on these properties exceed those of apartments -- in many cases by quite a bit.

The average cap rate for small to mid-sized apartments in San Francisco is 4.4%. That is simply not a very good return for a real estate investment in this economic climate. On top of the small returns, apartment owners often deal with late paying tenants, defaulting tenants, tenants that damage their units and around-the-clock calls about leaking and broken toilets and sinks.

Worst case scenarios abound in apartment building ownership: It is too easy to rent to that tenant that knows the law, that moves from place to place defaulting on their leases, and that stays for months without paying rent while the landlord goes through the judicial eviction process.

Small to mid-size apartments are management intensive.

For the same price as an apartment building, you can own a building leased by Starbuck's, McDonald's Walgreen's, or any number of other national and regional tenants. Generally, the tenants are responsible for all of the property taxes, insurance, maintenance and repair except for the roof, slab, and other integral structural property elements.

These major corporations are often worth billions of dollars, and they frequently are the signatories on the leases. Depending upon the property, cap rates can be between 5% and 9%.

With a 1031 exchange, we can structure the transaction so that you defer most or all of the capital gains taxes from the sale of the apartment building.

Contact Dane@FirstCaliforniaRealty.com for a free list of hundreds of these investments nationwide. We'll advise you and handle the transaction to your satisfaction.