Getting into commercial rentals

[Shay Allen]

Hey guys im new looking to getting into commercial rentals i think i found a few deals here in philly as well as a few where most of you all are located in Cleveland but what im mostly stuck on right now is funding as well someone with experience especially since this will be my first commercial prop i would like to have someone who is experienced. Im only looking for 5-20 units with 95%+ occupied in a A or B neighborhood is this a good place to start? I feel like this is my sweet spot under the price of $1.5 mill Let get to talking BP do you know any good funders, or CPA's,

[Marty Johnston]

@Shay Allen, welcome to the world of commercial multi's! As already stated, be prepared to pay a premium. 30k will only get you a down payment for a 100-115k complex. Be prepared for closing costs - Lender fee 1-3 pts (possibly broker fee if you use a broker 1-3pts) Insurance, and an appraisal (@3k for commercial). If you do the math, for a 1.5MM the numbers ad up. As you can see, liquidity is much more necessary in commercial than residential when it comes to fees and closing costs.

As you stated above, finding an experienced partner in the type of investment you're interested in is key, and will certainly help you get decent financing with not only better rates and terms, but will help lower your risk as well. It's important to figure out now what value you can bring to an experienced investor, and look for an equity partner on the deal. That's what we tend to recommend anyways.

ihope this helps! And wish you luck

Marty