How Did You Begin In CREI
What was your first commercial real estate investment? I want to move up the ladder to commercial properties, for obvious reasons, and I'm just curious to hear how you guys started.
What was your first commercial real estate investment? I want to move up the ladder to commercial properties, for obvious reasons, and I'm just curious to hear how you guys started.
I moved to Florida, and bought a mobile home park to retire early from the computer industry in eraly 2001. I was 32 then. Got rid of it and the girlfriend I moved here with , and kept going with other ones since then. Sort of fell into it.
My first commerical investment was a bus terminal. Actually was one of my best deals.
It was bank owned, the tenant was moving out. I offered asking price if bank would forego payments for three months. They agreed. I asumed I would need th three months to find a new tenant.
The exisiting tenant was moving out because of all the problems with the previous owner and no managment. I talking him into staying - offered him a long term lease -which the bank would not do.
Long story short - the property cash flowed big time right out of the gate and I eventually sold the building (5 years later) to the same tenant.
Gregg
[addsig]
My original plan was to buy 4 plexes one by one.
One night it clicked that I'd be better off getting started in multi's due to:
-Economies of Scale
-Higher Cap rates
-Lenders look at the property more than you (for cash flow, debt serviceability, and credit)
-Deals have bigger margins
-Fewer buyers
-Personal Experience with multi's
All I had to do was figure out what I could buy and how I could buy it.
you see, heres my whole thing.
I'm from mass. My part of the state is a very high market, difficult to find any thing worth buying under 200k Way up about2 and a half hours away, is the springfield area. In this area, houses for 50k are all over, and a multi can be picked up eaisly for 150k or better. (i'm looking at one now, asking 144k, brings in 2k a month) I've been thinking about taking out loans on properties up there for cash flow, and hoping the market will boom in a few years, and then cash out. But, the market could stay where it is, and it could also go lower. SO i don't konw
[addsig]
i'm working on my first 2 comercial deals right now, one of them the owner is willing to carry 20% of purchace price and the property i think will come in at about $ 100,000 over the selling price. i stumbled across it. anf the other one the investor whole sales properties and does not try to squez every last cent out of them.
the deals are out there, its a matter of patience, and negoation
john 8-)
I hate to tell you this Birdog1, but keep looking. the deals are there, but not visible to the untrained eye. My first deal didnt have an MLS number, was on the market for two years, and the seller had the property in Florida listed with an Ohio broker. There wasnt even a sign out front. Tell me that was easy to find.
I actually was looking at another property when the broker mentioned this one that hadnt moved. I bought it for 897,000.00. At closing I received 11 mobiles, (they forgot they had 3 of them), and ended up with 23 total by the second month. It had 76K in bad debt, and 14 pages of code violations. After 3 months (and 100K in improvements)it appraised at 1.8 million with a gross cash flow of 21K monthly. Oh yeah, I forgot, I also did it with 9Grand down, (1/2 of the closing costs). The loan I received was from private financing, I assumed the first that was private and made the seller take a second for the rest. Not once did they check my credit.
My point is that they arent going to jump out at you the first year or so. They are there though. Talk with the smaller realtors, they are hungrier. Also talk to mortgage people, get expired MLS lists, foreclosures, tax deed sales, etc etc etc. I know when I was in North Lowell Mass, there were abandoned properties, all over. But I wasnt in this business then. Most of all dont get discouraged, its easy to do in this business. I personally dont buy anything on future value, just what it is now and what I can sell it for within 3 months. If its profitable enough, and easy to manage I keep it.
Good Luck,
Kyle