is it possible for a small investor with little to no experience in real estate to invest directly into commercial real estate instead of residential ?? large apt buildings / office buildings
@Alina Trigub how much did u have to put up as an equity partner? and are dividends paid out in deals like that or do you get your investment back when the property is sold?
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
7y
@Account Closed,
Each deal is different. Normally they start around $50k, but could be smaller or larger. Each offering is different, but in general they offer to pay dividends and return capital as part of the process. It may be returned in portions or in full during various capital events.
@Alina Trigub what made you want to invest as a equity partner in someone else's deal vs. your own deal? and what are the advantages and disadvantages of this??
Accountant · La Mesa, CA · Member since 2017 · 477 posts · 476 votes
7y
Hi @Account Closed,
It is absolutely possible to jump into commercial real estate investing. If you are looking to do your own deal, there are a few hurdles that you would have to clear. 1) You need to educate yourself so that you understand what is a good deal and what is not. You would also want to have a good idea of how to add value to the properties. I like Crushing It by Brian Murray and the BiggerPockets podcast as a starting point. 2) Unless you are bringing in partners (and that is hard to do without a track record and/or a lot of built-in trust) or can structure some creative financing you will need cash. Seller carrybacks are not uncommon, but you will probably need 10% as a down payment and cash to hold in reserve. For a larger unit, that can be an obstacle. 3) You need a broker you will be willing to work with you. Commercial brokers hold a lot of power in commercial real estate investing, and they don't want to waste their time so you would need to be able to prove to them that you are serious and can close.
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
7y
Travis, Passive investing allowed me to do it in a very little time and get good return so it essentially increased that return exponentially since the time invested was minimal.
Advantages: let me just say this is for busy professional and/or for folks that don't want to be bothered to become active in real estate. Disadvantages: no control over investment (GPs have control) and this is not a liquid investment.
Originally posted by @Account Closed:
@Alina Trigub what made you want to invest as a equity partner in someone else's deal vs. your own deal? and what are the advantages and disadvantages of this??
@Brian Schmelzlen I have started to educate myself. in your opinion, what makes a great deal to you. and I actually have that book by Brian Murray just haven't begun to read it but I have been watching bigger pockets podcast and books.
@Alina Trigub ok when you say the time was minimal, so the time frame was short (6months -1 year ??) and that sounds like a great investment. where do you find the majority of your deals??
Accountant · La Mesa, CA · Member since 2017 · 477 posts · 476 votes
7y
What makes a great deal all depends upon your goals: long-term equity, cash flow, etc.
For me, a great deal is a commercial property that is more than 50% vacant in a good area that only needs moderate improvements to make it appealing again to potential tenants. I look for properties that can have decent cash flow but great value-add potential because I would want to pull my money out through a refi.
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
7y
Everything comes through networking!
Originally posted by @Account Closed:
@Alina Trigub ok when you say the time was minimal, so the time frame was short (6months -1 year ??) and that sounds like a great investment. where do you find the majority of your deals??