Commercial property as part of your portfolio anyone?

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Nectarineman
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Joined: Sun Jul 02, 2017 5:20 pm

Commercial property as part of your portfolio anyone?

Post by Nectarineman » Wed Aug 02, 2017 6:45 pm

Do any bogleheads have investments in commercial properties that they consider as part of their overall portfolio?

I am talking about non reit or stock investments.

I am considering an investment as a way to diversify what would amount to a small part of my investment portfolio.

alex_686
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Re: Commercial property as part of your portfolio anyone?

Post by alex_686 » Wed Aug 02, 2017 7:30 pm

Yes, but 2 notes.

First, the point of a AA is to create a efficient portfolio to meet your goals. Direct real estate's market value will always be a estimate and the asset is illiquid. I would discount the property value by 20% when building an allocation.

Second, owning commercial property is a job. Maybe a part time job but still a job.

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Peter Foley
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Re: Commercial property as part of your portfolio anyone?

Post by Peter Foley » Wed Aug 02, 2017 7:54 pm

We held a commercial real estate property for almost 30 years. We sold it about a year ago. Overall it was a very good investment. It was a small town post office rented to the US Postal Service during the entire period. Had I not done a fair amount of the routine maintenance, interior and exterior painting and a few other odd jobs, it would not have been quite as lucrative.

Finance-MD
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Re: Commercial property as part of your portfolio anyone?

Post by Finance-MD » Wed Aug 02, 2017 9:30 pm

I will likely buy a share of a large multifamily apartment complex this year as a passive investor. The exit strategy is to sell after about 5 years after appreciation of rental income from improvements. This is illiquid but has a clear exit strategy of selling. I will count this as part of our overall portfolio for rebalancing as we have a large investment in TIAA Traditional we can sell in retirement accounts to keep our direct real estate allocation from fluctuating significantly once we buy the multifamily share. We have some single family homes that we own as rentals and don't have any plans to sell; these we include in our net worth calculation but exclude from our asset allocation percentages.
I've thought about this extensively this year and this is my current plan for how we incorporate RE into our portfolio.

Biil McNeal
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Re: Commercial property as part of your portfolio anyone?

Post by Biil McNeal » Wed Aug 02, 2017 10:13 pm

How do you find opportunities for multi family or commercial real estate? Is there an equivalent to an MLS for them?

Biil McNeal
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Re: Commercial property as part of your portfolio anyone?

Post by Biil McNeal » Mon Dec 11, 2017 1:15 pm

Anyone know the best ways to find commercial property investments available? Is there am equivalent to MLS?

Carefreeap
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Location: SF Bay Area

Re: Commercial property as part of your portfolio anyone?

Post by Carefreeap » Mon Dec 11, 2017 1:43 pm

Inherited a 1/2 interest in a strip mall back in 2001. Tried to make it work but between the deferred maintenance and dealing with the other owner (Trust Company on behalf of DH's uncle) it was nearly impossible to make it work. Couldn't refinance due to Trustee's inflexibility or do other tweaks to make the investment work out.

Did a 1031 exchange in 2005 into a SFR which DH and I were the only "partners" which worked out much better.

Although I have a background in industrial and commercial real estate I prefer residential for smaller investors. Much easier to finance, lease and sell.

YMMV.

SittingOnTheFence
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Re: Commercial property as part of your portfolio anyone?

Post by SittingOnTheFence » Wed Dec 13, 2017 3:01 pm

Biil McNeal wrote:
Mon Dec 11, 2017 1:15 pm
Anyone know the best ways to find commercial property investments available? Is there am equivalent to MLS?
You find a broker who is CCIM certified. Google can probably help you do that.

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