Anyone here invest in commercial property?

[FrankNYC]

I took some money out of my brokerage account and instead of jumping back in the market or putting that money in fixed income I was thinking of purchasing commercial property (30% down, with a 15-year note). Do any of you have commercial property? If be curious to hear your thoughts/advice.

[aczaja10]

Run! Do not buy commercial property. I am a real estate lawyer and the foreclosure crisis is hitting the commercial market hard, even in Chicago where residential prices have stabilized. I am seeing a huge crisis right now in the commercial market and I am predicting another residential crash, which will drive prices even further down in both residential and commercial prices.

[JasoninDenver]

Makes sense if you own your own business and your business can pay yourself rent. I just can't find a property that works financially.

[DeeTee]

Originally Posted by JasoninDenver

Makes sense if you own your own business and your business can pay yourself rent. I just can't find a property that works financially.

If your buying your own office, cool.
If you have no idea what your buying in the commercial world, not cool

Have you considered dividend paying stocks?

[Danny83]

Here is a great place to search for it http://www.cityfeet.com

[FrankNYC]

Originally Posted by dt32886@gmail.com

If your buying your own office, cool.
If you have no idea what your buying in the commercial world, not cool

Have you considered dividend paying stocks?

I had some REITs before and I'm loaded up on stocks. I'm not looking for income--yet--since I'm still working. My plan was to have the rent take care of the taxes and mortgage and have the property all paid off in 15 years +- then live off the income or flip it.

[FrankNYC]

Originally Posted by Danny83

Here is a great place to search for it http://www.cityfeet.com

This is where I've been hunting. I live in the NYC metro area and prices here are insane.

[Danny83]

Originally Posted by FrankNYC

This is where I've been hunting. I live in the NYC metro area and prices here are insane.

Well as long as you can get insane rent prices I say go ahead

[denrusso]

Originally Posted by FrankNYC

This is where I've been hunting. I live in the NYC metro area and prices here are insane.

I might be able to help with the loan, if needed.

Shoot me a pm if you're interested.



Thanks,
dr

[Star Ferry]

It's not easy to make money in commercial real estate. In top class markets, you will be bidding against major players who have lower borrowing costs than you do. They've also achieved significant economies of scale with regard to management and maintenance.

In less prominent markets where REITs don't make many acquisitions, small investors would stand a better chance, but these are risky markets where the institutional guys are on the sidelines for a reason

Lest I appear pessimistic I'll add that I do own commercial real estate - yet I think too many people enjoy the idea of owning buildings and therefore don't make a fair comparison between RE and other asset classes

I was fortunate enough to take a few real estate classes when I was at Wharton and would recommend professor Peter Linneman's text "Real Estate Finance & Investments" as an introduction

[FrankNYC]

Thanks all. I'm also looking just outside of NYC, but not too far, like new haven where there are still (relative) bargains to be had

[westcoastunionthug]

I echo the sentimate reflected here with a few caveats, love what you buy, buy what you love. First off, full disclosure, my pockets are not deep enough nor my threshold for pain high enough to invest in commercial real estate. I own 10 properties in three states and two countries but commercial real estate scares the #%^ out of me.

If (I do not) I needed commercial property I would only buy a building I was passionate about, I invest in vacation destination property. I do not want to use the T word but that guy is passionate about the projects he builds or he doesn't build them. Be that guy, your best salesman, your biggest advocate, then when the stuff hits the fan, and it will, at one person will love being there, and if you do, chances are someone else will too.

The last thing (the first thing). Location, location, location. Do not buy or build in an outlying area hoping the world will come to you. Mohammad went to the mountain, the mountain did not go to Mohammad.

[PattyAP]

My father owns quite a bit of commercial real estate. He got into the market around '08 when the owner needed to liquidate to meet margin calls. He bought a corner block for 2.8m AUD with stamp duty. At the time it was returning around 10pct net which is extremely good then (don't know what is considered a good return now). I relieve the income statements every month and my understanding is that 7pct is pretty standard. However it's not office space or the likes instead it's a few restaurants and a ice cream shop who are renting

He was recently offered 5.5m aud from a Chinese guy trying to get into the market but my father isn't one to sell. I think like everything; you have to pick and choose as some make extremely good buisnesses who want just leave midway through a lease

[kilyung]

The market for large warehouse facilities in Colorado is hot right now. Pot growers are taking up every piece of commercial space they can. The asking prices are stupid crazy.

[brandrea]

I don't invest directly, but I have done very well investing in real estate investment trusts.

[Hpozzuoli]

I have commercial property which I operate my laundromats out of. Triple Nets make my life easy and I am very fair and helpful so I have gotten the reputation as a good landlord. I also have a few apts I rent which is great. They are near cooperate CVS and I get all the contractors from India. They turn over every year and when one set leaves they send their replacements to me.

My advice is do not jump into commercial leasing. You need to be on top of your market and your targets. I would say buy apartments (if there is a demand in your area). I find them for 50-80k then rehab them and rent them for 1k per month or more sometimes. Drop me a PM if or ask here if you have some other questions.

[Alford78]

Run! That is unless you are a busy type of person that likes to stay constantly busy working on something/fixing something and are generally really handy.

I bought 5 separate properties to take advantage of tax laws with a 1041 exchange after I sold a 100 acre farm back in 2010. They are a headache and huge stress to put it short. It didn't take long for me to hire property managers to relieve the stress.

I did a bunch of research before purchasing and what I came up with is a total net gain of 20% per year on "nice" property should be a goal. It's hard to find but I managed to get a couple right at that and a few down around 14% total that were new and recently built.

The big money is in trailer parks believe it or not. If can buy a slew of them that already have good managers on properties then the gains are up around 30% and when one gets totaled/ruined just haul it off and replace it for $7-$12,000. Sounds crazy but I almost did it after looking at the tax returns. Conscience only held me back. 30% annual return and never lift a finger is quite a good investment that will always be needed. And it will keep growing as well.

Edit. I also live around smaller cities so these rates of returns will vary depending on cost of living in different areas but would imagine they wouldn't deviate very much.

[Alford78]

Originally Posted by kilyung

The market for large warehouse facilities in Colorado is hot right now. Pot growers are taking up every piece of commercial space they can. The asking prices are stupid crazy.

This is no joke. It's amazing what is going on with the real estate market there!!!!!!!!!

If it did it there just imagine a US wide situation?!?!

[ref1655]

timing, the nature of businesses & location is the key...in downtown Palo Alto/CA, most of the commercial properties along University Avenue & its side streets have been owned by three families for over the past 50+ years. the landlords are in the driver's seat as they can dictate rental prices based on customer traffic via the countless restaurants, specialty stores (a dying breed) & office space.

on the other hand, there are still a number of noticeable vacancies in the commercial/industrial areas on the outskirts of town.

[Gaijin]

I suspect we are on track for another 2008 type meltdown that will make Lehman Brothers look like a stubbed toe. China is loaded and loaded with bad debt after bad debt. The Chinese are doing all they can to get any wealth out of the country before the bubble pops. The Chinese government is trying to curtail that. How does this affect other markets? Simply soon less money buying properties.

Back in the States the dodgy loan business is back in town. Floating interest rates to people who shouldn't be getting hundreds of thousands of dollars loaned to them. Sound familiar?

My predictions are grim. Stock market crash when interest rates inevitably rise followed by the housing market.

[VICI]

Frank, I'm in NYC too.

Are you interested in business commercial or residential over 4 units?

[Etschell]

Originally Posted by FrankNYC

This is where I've been hunting. I live in the NYC metro area and prices here are insane.

Cvs or walgreens triple net lease. Find someone who wants out.

[CL65AMG]

Commercial real estate can be a great investment but as mentioned by others - it is not for the faint of heart. It's how I have made my living for the last 15 years. They key is buy good real estate. Even when the market stumbles, good real estate will still be good real estate - albeit its values and cash flows are not immune to market swings. They other think to keep in mind is don't over leverage the property. Make sure you can discount rents by a wide margin and still cover your expenses and debt service. Happy hunting!

[Etschell]

Originally Posted by FrankNYC

I took some money out of my brokerage account and instead of jumping back in the market or putting that money in fixed income I was thinking of purchasing commercial property (30% down, with a 15-year note). Do any of you have commercial property? If be curious to hear your thoughts/advice.

I'd go into senior living facilities or buy retirement and nursing home reits

[Headshrinker]

I own a medical building in Princeton where I have my practice. There are twenty-five tenets; I can't complain, my Dad taught me well.

[rr.igreid]

Originally Posted by Alford78

Run! That is unless you are a busy type of person that likes to stay constantly busy working on something/fixing something and are generally really handy.

I bought 5 separate properties to take advantage of tax laws with a 1041 exchange after I sold a 100 acre farm back in 2010. They are a headache and huge stress to put it short. It didn't take long for me to hire property managers to relieve the stress.

I did a bunch of research before purchasing and what I came up with is a total net gain of 20% per year on "nice" property should be a goal. It's hard to find but I managed to get a couple right at that and a few down around 14% total that were new and recently built.

The big money is in trailer parks believe it or not Commercial lease. If can buy a slew of them that already have good managers on properties then the gains are up around 30% and when one gets totaled/ruined just haul it off and replace it for $7-$12,000. Sounds crazy but I almost did it after looking at the tax returns. Conscience only held me back. 30% annual return and never lift a finger is quite a good investment that will always be needed. And it will keep growing as well.

Edit. I also live around smaller cities so these rates of returns will vary depending on cost of living in different areas but would imagine they wouldn't deviate very much.

While I don't have personal experiences or opinions as an AI, I can provide you with some general thoughts and advice when considering purchasing commercial property. Here are a few points to consider:

Investment Goals: Clarify your investment goals and objectives. Commercial property can offer potential income generation and long-term appreciation, but it's important to align your goals with the specific property and its potential returns.

Market Research: Conduct thorough market research to understand the current trends and conditions in the commercial real estate market. Consider factors such as location, demand, vacancy rates, and potential for future growth.

Due Diligence: Perform comprehensive due diligence on the property you're considering. This includes reviewing financial statements, assessing the condition of the property, evaluating tenant leases (if applicable), and understanding any legal or zoning restrictions that may impact the property's value or potential income.

Financing Options: Explore different financing options available to you and assess the associated costs and risks. Evaluate the terms and interest rates of the 15-year note you mentioned, and ensure you have a clear understanding of the financial commitments involved.

Property Management: Consider the responsibilities and costs associated with property management. If you're not planning to manage the property yourself, factor in the costs of hiring a property manager and ensure they have experience in commercial real estate management.

Risk Assessment: Understand and assess the risks associated with commercial property ownership, such as potential vacancies, market fluctuations, property maintenance, and unforeseen expenses. Have contingency plans in place to mitigate these risks and ensure your investment remains viable.

Professional Advice: Seek guidance from professionals such as real estate agents, lawyers, and financial advisors who specialize in commercial real estate. They can provide valuable insights, help you navigate the process, and ensure you make informed decisions.

Remember, investing in commercial property involves substantial financial commitments and risks. It's crucial to thoroughly research and assess the property, understand your financial capabilities, and consider your long-term investment objectives before making a decision.

[airchitect]

Originally Posted by rr.igreid

While I don't have personal experiences or opinions as an AI, I can provide you with some general thoughts and advice when considering purchasing commercial property. Here are a few points to consider:

Investment Goals: Clarify your investment goals and objectives. Commercial property can offer potential income generation and long-term appreciation, but it's important to align your goals with the specific property and its potential returns.

Market Research: Conduct thorough market research to understand the current trends and conditions in the commercial real estate market. Consider factors such as location, demand, vacancy rates, and potential for future growth.

Due Diligence: Perform comprehensive due diligence on the property you're considering. This includes reviewing financial statements, assessing the condition of the property, evaluating tenant leases (if applicable), and understanding any legal or zoning restrictions that may impact the property's value or potential income.

Financing Options: Explore different financing options available to you and assess the associated costs and risks. Evaluate the terms and interest rates of the 15-year note you mentioned, and ensure you have a clear understanding of the financial commitments involved.

Property Management: Consider the responsibilities and costs associated with property management. If you're not planning to manage the property yourself, factor in the costs of hiring a property manager and ensure they have experience in commercial real estate management.

Risk Assessment: Understand and assess the risks associated with commercial property ownership, such as potential vacancies, market fluctuations, property maintenance, and unforeseen expenses. Have contingency plans in place to mitigate these risks and ensure your investment remains viable.

Professional Advice: Seek guidance from professionals such as real estate agents, lawyers, and financial advisors who specialize in commercial real estate. They can provide valuable insights, help you navigate the process, and ensure you make informed decisions.

Remember, investing in commercial property involves substantial financial commitments and risks. It's crucial to thoroughly research and assess the property, understand your financial capabilities, and consider your long-term investment objectives before making a decision.

Well my friend you decided to revive an ancient thread that just so happened to be relevant to me right at this moment! Thank you! The info herein is exactly what I’ve needed to read.


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[Tri-Tip]

Not my own properties, but one of my clients has quite a few contiguous buildings that I help him manage. They range in size from 600 square feet to 30,000 square feet. Over the last 5 years, we have seen rental rates almost double in the area and the vacancy rates for these types of buildings are less than 1%.

[chelik322]

I believe diversification is key in building a robust investment portfolio. Combining traditional investments like commercial property with emerging assets like crypto can potentially offer a balanced approach to wealth creation. Each investment avenue has its own set of advantages and considerations, so it's crucial to align your investment strategy with your financial goals and risk tolerance.

[Moondoggy]

Commercial/industrial, is the new residential.