Commercial Real Estate Investing

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Bill McNeal
Posts: 170
Joined: Tue Feb 23, 2010 3:57 pm

Commercial Real Estate Investing

Post by Bill McNeal » Fri Jul 05, 2019 2:18 am

I have a house I’m renting out, but all the wild stories regarding tenants from other landlords on here have me worried about keeping this up. I have VNQ, but want more hands on and higher yield side hustle.

How do you get started in commercial real estate investing, either apartment buildings or office towers? Is there a MLS equivalent? I hear commercial can be more lucrative (no money down, tenants rent cover mortgage) and no eviction nightmares! What team do you recommend I assemble to find and purchase commercial real estate?

pepperz
Posts: 310
Joined: Sun Jan 24, 2016 7:13 pm

Re: Commercial Real Estate Investing

Post by pepperz » Fri Jul 05, 2019 2:47 am

Find a mentor who is doing it successfully and learn the business from him or her. I would not hesitate to pay someone like that for education.

Due to size of deals, commercial is more conducive to partnerships where multiple people need to get involved in a deal. So there is lots of opportunity for synergistic relationships where you go in on deals with your mentors / peers.

Join your local commercial real estate investing groups. Talk to people who are doing it. Fly to a few of the events to learn what you can and meet the people. Join a mastermind so you’re around people who are “doing it”.

If you don’t know where to start finding those people / resources, ordering the top 5 books on the subject on Amazon will introduce you to whole world of people who can help you.

Bill McNeal wrote:
Fri Jul 05, 2019 2:18 am
I have a house I’m renting out, but all the wild stories regarding tenants from other landlords on here have me worried about keeping this up. I have VNQ, but want more hands on and higher yield side hustle.

How do you get started in commercial real estate investing, either apartment buildings or office towers? Is there a MLS equivalent? I hear commercial can be more lucrative (no money down, tenants rent cover mortgage) and no eviction nightmares! What team do you recommend I assemble to find and purchase commercial real estate?

pepperz
Posts: 310
Joined: Sun Jan 24, 2016 7:13 pm

Re: Commercial Real Estate Investing

Post by pepperz » Fri Jul 05, 2019 3:27 am

LoopNet.com is to commercial what Zillow is to residential.

Tip: it’s cool to login and see what’s available in your area, but I would not suggest doing anything without education (see my first reply to your post.)... I’ve heard it said that “LoopNet is where deals go to die.”
Bill McNeal wrote:
Fri Jul 05, 2019 2:18 am
Is there a MLS equivalent?

WhyNotUs
Posts: 1517
Joined: Sun Apr 14, 2013 11:38 am

Re: Commercial Real Estate Investing

Post by WhyNotUs » Fri Jul 05, 2019 7:28 am

+1 for networking locally, doctors dentists, lawyer, are investing in commercial space in your area, if you find a mentor she/he may be able to get you in on a reasonable deal.

If you already have a residential rental, just focus on the lessons learned-- screen thoroughly, check on the property regularly, have clear policies and stick to them, know tenant law.
I own the next hot stock- VTSAX

Dave55
Posts: 455
Joined: Tue Sep 03, 2013 2:51 pm
Location: Colorado

Re: Commercial Real Estate Investing

Post by Dave55 » Fri Jul 05, 2019 8:44 am

Bill McNeal wrote:
Fri Jul 05, 2019 2:18 am
I have a house I’m renting out, but all the wild stories regarding tenants from other landlords on here have me worried about keeping this up. I have VNQ, but want more hands on and higher yield side hustle.

How do you get started in commercial real estate investing, either apartment buildings or office towers? Is there a MLS equivalent? I hear commercial can be more lucrative (no money down, tenants rent cover mortgage) and no eviction nightmares! What team do you recommend I assemble to find and purchase commercial real estate?

You could start by networking with brokers in the area where you are investing and letting them know what you are looking for, type of asset, CAP Rate, size, location, dollar range etc. The big firms are CBRE, Colliers, Marcus and Millichap, Cushman and Wakefield, JLL, Newmark Knight Frank, Transwestern, NAI, HFF, SVN, SRS etc.(Many more and smaller local brokers). I got into commercial real estate as a 2nd career in my early 50's doing acquisitions. I was lucky to be mentored and associated with a very experienced friend who is in the small boutique private equity space. His firm does private placements for $5 - $20 million dollar deals.



Dave
Last edited by Dave55 on Fri Jul 12, 2019 5:45 am, edited 1 time in total.

oldmotos
Posts: 43
Joined: Fri Aug 04, 2017 9:37 pm

Re: Commercial Real Estate Investing

Post by oldmotos » Thu Jul 11, 2019 10:14 pm

I sold my single family home rentals after 40 years when it became more difficult to find quality tenants and I had less energy. I then bought several commercial properties and it has worked well so far. I am in a LCOL area and most of the properties came to me by word of mouth. I believe there is more vacancy risk with my commercial properties but way less drama. I had the bad habit of falling for residential tenant's sob stories which can also happen with commercial but not nearly as common.

J295
Posts: 2054
Joined: Sun Jan 01, 2012 11:40 pm

Re: Commercial Real Estate Investing

Post by J295 » Fri Jul 12, 2019 9:30 pm

Find a mentor partner

Ideally both have deep pockets

If you are serious about no money down you will need very strong financial position and other additional collateral.

renue74
Posts: 1582
Joined: Tue Apr 07, 2015 7:24 pm

Re: Commercial Real Estate Investing

Post by renue74 » Fri Jul 12, 2019 9:44 pm

I owned a few office condos and did triple net leases on them. Then I owner financed them to tenants. Worked OK, but I almost had to foreclose on one.

I agree...find a good, successful mentor and they will be helpful.

Keep in mind, you're a small time player in a big expensive market where you're competing against national and local competitors (sometimes). Due diligence is key.

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