Getting Creative Commercially
Commercial property is where I want to be...eventually. But if there are creative ways to get in it now...I would love to learn. Are there any courses for this?
I would like to be the owner of a nice fairly new maybe even brand new apartment complex (one day). But I do not have nearly a fraction of the capital required for something like that. What are some ways to get my feet in comercial property? Are the same creative techniques used in residential investing in effect? Owner financing, etc...
My best bet would be to buy a course, I am my best teacher...but I go very slow when Im teaching myself.
But if you know of ways people have gotten into commercial property who had little to no money to work with, I'd be very interested in hearing some stories.
Thanks
JB
[addsig]
Good luck in getting into commerical.
When I started in R.E. I strated like many here do - with a course ( Al Lowrey) and then started buying SF.
I now only invest in commerical ( I have been in R.E. 25+ years) and pre-construction condos. (I also develop land, condos and commerical)
I do R.E. full time and would not go back to residential.
The biggest difference is commerical is the type ( and I believe quality) of the seller, the buyers, and the tenants.. There is less emotion and more logic here than in residential. I believe you have an easier time getting owner financing, low interest money and non-recourse money.
I know of no course to take and no single book that will help.
Most of the CRI ideas apply to commerical.
Why commerical over residential?
1. Little emotion
2. No phone calls at night
3. No neighbor problems
4. Numbers are the most important thing
5. People pay ther rent for their busness before they pay their rent for their home.
6. Triple net the rule rather than exception
7. More stable tenants
8. No kids or dogs
9. Numbers are better
10. I understand commerical better
11. Less competition
12. Competition is smarter
The negatives of commerical that you need to be aware of:
1. Vacancies may be longer
2. Long term financing not generally available
3. Amortization period from banks shorter
4. Competition is smarter.
Good luck
Gregg
_________________
Gregg Fous
Investor/Developer
"Under-promise and over-deliver"
[ Edited by GFous on Date 03/14/2004 ][ Edited by GFous on Date 03/14/2004 ]
[quote]
On 2004-03-13 05:54, GFous wrote:
"Why commerical over residential?
1. Little emotion
2. No phone calls at night
3. No nousy neighbor problems
4. Numbers are the most important thing
5. People pay ther rent for thier busness before they pay theri rent for there home.
6. Triple net the rule rather than exception
7. More stable tenants
8. No kids or dogs
9. Numbers are better
10. I understand commerical better
11. Less competition
12. Competition is smarter"
Gregg,
I agree with you. Land business is similar to commercial -- numbers oriented, no emotion, kids, hand-holding or dogs (four-legged variety). Definitely less competition, too.
Land business IS commerical.( you can't live on it unless you are one of LUFOS clients!)[ Edited by GFous on Date 03/17/2004 ]
So far for me investing in residential, I've found a lot of investors who like to help newbie investors. I think I have gotten some great deals, just because I'm new, they could tell I've done my homework, and I'm very motivated.
In commercial re is it like this as well? Should I try to start moving into it now? Or should I season myself in residential for a while, then move into commercial?
JB
[addsig]
I would highly recommend a book by Steve Berges: "The Complete Guide to Buying and Selling Apartment Buildings".
I just purchased my first commercial property 3/1/04 after looking for months. This book really helped me focus.
Good Luck!
Hi, I have been out today trying to buy lots and not a very good day. I did have one nice man offer to sell me a single family lot for $650,000 my evaluation of the lot is about $45,000. When I asked him if the mineral rights went with it he became suspicious and withdrew his offer. I left him as he searched for a spade with which to dig. Now there is a man with a problem. I left my card said I could fit him in for an hour of extensive therapy some time latter in the week.
But I did trip upon something of interest.
A small strip mall which is 8 shops and all of them empty except for two occupied by Gypsies. They of course are not paying rent. But what is of interest is that this property located in the northern portion of the San Fernando Valley is experiencing a racial change as masses of Latino families are moving into the area attracted by the loose management which allows as many as three or four families to rent a one bedroom slummy unit and take turns sleeping, eating etc.
I notice the cars under repair, the loud rancho music and the many people just wandering around with no employment.
So the 8 shop strip mall is of interest..
What if I broke each shop up into four sections. that is 32 little tiny shops. What if I played loud ranchero music. Maybe even got a Mariachi band to walk up and down and play away, yes I know they do go off the chromatic scale but thats the indian sound you just have to adjust. If I had 32 little spaces and collected my rents every week. If I got the little food venders and the icecream vendors and the guys selling spanish language music CD's. I would charge very low rents but my god 32 places of business.
With luck I can make it look like a Mexican street scene. Roaring on almost 24 hours a day. Everybody making small money but on going and continuous. Strickly Latino.
Why fight the ethnic change, why not just go along with it, enjoy it and now this part I like, make money!.
So I am starting on the telephone tomorrow calling all those happy landlords and see if I can negotiate a really cheapy master lease for five years and also negotiate a buy for cheap within that period of time. I shall check the mortgages, go play friend of the bank and see if they have been paying and if not maybe the bank and I can achieve a small transfer of either ownership or maybe a discount buy of their mortgages say 60 cents on the dollar. I have a feeling it is probably close to foreclosure.
Now this looks like fun. I need a break from buying lots. Should be fun. Maybe the Mariachis will let me play my Shakuhachi. I could get a really big hat with the little tassel balls that hang down. Time I enjoyed myself.
Cheers Lucius <IMG
SRC="images/forum/smilies/icon_cool.gif"> <IMG SRC="images/forum/smilies/icon_cool.gif"> [ Edited by Lufos on Date 03/17/2004 ]
I can think of a few ways.....
Sub. to
Lease options
wholesaling
birddogging
Owner finance and wraps
Use Partners with cash/credit
As you read through the forums, everytime you see the word "house" substitute "Apartment building", "Strip mall" or "office building" and you're on your way to learning about how to buy commercial real estate creativly.
All the techniques that are discussed here regarding homes (short of the actual loans you might obtain for owner occupied properties and 100% conventional financing) can be applied to ANY type of property, be it an office building, amusement park, raw land, etc.
Quote:
On 2004-03-16 18:30, 64Ford wrote:
I would highly recommend a book by Steve Berges: "The Complete Guide to Buying and Selling Apartment Buildings".
I just purchased my first commercial property 3/1/04 after looking for months. This book really helped me focus.
Good Luck! <IMG SRC="images/forum/smilies/icon_smile.gif">
I'm ordering the book right now!! Thanks so much!!
JB
[addsig]
Quote:
On 2004-03-18 23:47, jbinvestor wrote:
Quote:
On 2004-03-16 18:30, 64Ford wrote:
I would highly recommend a book by Steve Berges: "The Complete Guide to Buying and Selling Apartment Buildings".
I just purchased my first commercial property 3/1/04 after looking for months. This book really helped me focus.
Good Luck! <IMG SRC="images/forum/smilies/icon_smile.gif">
I'm ordering the book right now!! Thanks so much!!
JB
My book needs to hurry up and get here, I'm getting very anxious to buy an apartment complex.
grrr :-x