Wrong time to get into CRE?

[Andrew Nguyen]

I have a rental single-family home in California doesn't cash flow well. I'm thinking of exchanging it for a commercial property such as medical office building or a small shopping center. With the recession is on everybody's mind, is this a bad time to get into CRE? should I stick with small multi family residential properties? Net new purchase around >=1.2M

[Jameson Sullivan]

Short answer: It depends. Honestly though, for $1.2 million I would stay in the multifamily space. A decent STNL asset with decent term left is going to start in the 1.5 range. Sure, you can get something for 1.2 but I think you're better off sticking in multifamily. Especially if what you're saying is you're going to leverage $300k to buy a $1.2million retail property. Retail properties take a lot of cash to operate and a vacancy could crush you especially if it's caused by a general economic downturn.