Residential or Income Real Estate?

I am currently looing to invest and have a substancial amount to work with. Is it better to create an array of properties offshore, invest in commercial/income property, or buy a home? Which would be more lucrative and the smartest investment? I am looking long term.

I should clarify. I already own a condo. This is a second purchase. Do I buy a home and use the condo as income property or do i live in the condo and buy income property?

always by a home first.

To quote my father, "How long is a piece of string?" Investing is such a personal art, driven by your risk tolerance, interests, and background knowledge. If you know what you're doing, all of them are good investments. If you don't, any of them could ruin you.
Personally, I would go for the offshore commercial. Panama is good at the moment.
Robert Kiyosaki (Rich Dad) says that your first investment property should be a single family.
The big advantage of commercial over residential is how they are funded. Sit down and discuss that with a commercial banker, interview at least 2 before doing business.

Good luck.

You don't offer enough info to give a quick answer, but I can tell you as a 25 year investor, you have many options to consider, any of which could have substantial impact on your tax situation, so here are a couple of scenarios to consider.

First of all, what city/state are you in?

Let's assume you are US based...because I can't tell by simply reading your post. If your condo is worth $150,000 and you bought it 2+ years ago for let's say $100,000, your profits are tax free if you sell today, but why not wait until that tax free benefit can be realized at a higher level. You could rent out that property for up to 3 years and still be able to sell it tax free as long as you close escrow before the 3 years is up...or you end up moving back into capital gains territory.

I would by another place...shoot for the ideal investment grade property which is usually 3 bedrooms 2 bath in a nice blue collar neighborhood, or in a new development. Live in that place for a minimum of 2 years beyond selling the first condo, and then move on to your next investment, always rolling your profits into the next property...or properties as you build enough equity to buy multiple properties on that next move.

I would not recommend starting with a commercial investment until you learn as much as possible about your target market, and start small as a landlord...the condo is a great start.

I have over-simplified this strategy for this post, but the other part of the equation that's critical is choosing the right financial instrument to finance your next property. I highly recommend the "Home Ownership Accelerator" which pays down your debt quicker, while retaining the flexibility to tap your equity when shorter term investment opportunities arise...but on average will pay down your mortgage in half the time. This loan isn't for everybody, but it's fantastic if you qualify. You won't get sucked into the re-finance trap and is the last loan you will need for a given property. It works for people with good credit, good monthly positive cash flow (more money than month), at least 20% equity, and someone who is financially disciplined.

M other advice is to stick close to home for your first investments, if not all, until you have gained some real experience. Do not fall into the trap that many will set with offshore opportunities...too risky for the uninformed.

These loans are also available in Australia and the UK for those people looking into this question from those countries.

Let me know if you'd like to learn more. I offer a free phone consultation to anyone interested in becoming a real estate investor.

Cheers,
Robert Noakes
Real Estate Investment Consultant
Sr. Mortgage Planner
415.652.8112
robert@noakes.com