【Student Question】 Hello Master. I have a question about investing in commercial storefronts in a newly developed community in Henan. These are standalone commercial units. Because the investment risk is high, the developer has opened up the storefronts and divided them into multiple small shares for sale — each unit priced at around 100,000 to 200,000 yuan. They come with a managed lease-back arrangement. Is this worth investing in?
Would converting one into a supermarket selling fresh produce and agricultural products reduce the risk?
The funding would come jointly from my husband and me, with me contributing the larger share.
【Master Chi’s Response】 Times have changed. Commercial apartments and storefronts are mostly not worth investing in anymore.
Here is my view.
First, any investment must follow your own logic. Do not blindly follow the crowd.
Second, keep control in your own hands. The simplest question to ask: what happens if the promised lease-back returns are never delivered? If it were me, I would not invest.
When we invest, we focus on how much we can earn — but we must also constantly watch one thing: is our principal safe? Let me be direct with you: it is getting harder and harder for commercial storefronts to break even.
Do not blindly invest in areas you don’t understand.
That said, this is only my personal view. Ultimately, you and your husband need to discuss it together.
Think about it this way: making money isn’t easy — so why would investing be? Ask yourself a simple question: among the wealthy people you know, how many have made investments like this? If you find that the other investors are all people in roughly your same position — that itself tells you there is significant risk here.
Take some apartment properties rented out to chain hotels, for example. Twelve years to break even. Meaning that after twelve years, the property is truly yours — sounds great, right? Except the developer disappeared before then.
Never investing in unfamiliar territory is the first principle.
Spending money will not make you poor. Wrong investments will.
And the fact that they are splitting this storefront into shares tells you one thing: they have run out of options.