What Is The Best Step
What is the best step to start into commercial? Are we better off with multi-family or office/retail? We are wanting a collection of multi-family and office, but I would like to know iflenders look at some in more favorable light than others. What makes the best lending portfolio?
Thanks
Sire
Best first step is education. Look at a great deal of properties - of all kinds.
Next step is to review your objectives. Income? Appreciation? Heavy management? Triple net? Fix up?
Don't worry about lenders objectives yet. Find a deal that will work for you and your experience level. Base your objectives somewhat on your background. Don't get into a strip center in a borderline part of town if you don't feel comforatble shopping there.
Start small. Your mistakes will not cost you as much.
Get a good mentor or commerical broker to help you. Interview at least four. Find out what they own. Do not deal with one that is not an investor.
Lenders are conservative and generally have no vision. They wiill love the deal with a solid history and a national credit tenant.
Ask "stupid questions". Immerse yourself in your task. It is the best way to learn.
Do not be afraid to make offers and use due diligence periods to further educate yourself.
Just some thoughts.
Gregg
[addsig]
The short answer is "it depends".
If you are in a growing area with rising property values then you may be safe in commercial. If you are in a low growth area I would suggest multi-families as a much safer choice.
Some of the numbers on vacancy rates in commercial are staggering. I would not invest in commercial unless you are in a growth section of the country AND a growth area of your town.
Gluck!
It's all about commercial.......Tough thing about commercial in the current market is it is easier for business owners to buy with low interest rates than to pay you on a lease. If you want to start now in this market my suggestion would be to buy a good size parcel of commercial land.... 1/2 to 1 acre...and develop it into say 8-16 - 1000sqft units and lease them out or sell them. Commercial buildings are easy to develop - building, open floor plan and a bathroom as opposed to the detailing work that goes into residential.
Just my opinion