After over 30 Residential purchases I am moving to Commercial

[Joshua Austin]

I have spent the last 4 years building a strong SFH portfolio that sits at 26 homes total. In addition to those that we have kept, we have completed a half-a-dozen flips during this time as well. It's been 4 years of solid base hits but I was honestly getting a little burned out and bored with the process. Then I got a taste of COMMERCIAL.

Next week we close on our first Commercial deal. It was off market and it's an industrial complex on 5 acres near Savannah, GA. It butts up against a major interstate and the building is 10,000sqft with 3,000 of that being office space. We have a tenant lined up to sign a NNN lease the same day we close and the numbers are just incredible. We are buying this property at a 12 CAP and the tenant is strong. They are the second largest freight company in their space in the country.

Purchase Price $1,250,000

Renovation cost that is mostly fencing and crush and run $300-350k

Total rent year one is $17,500 per month ($210,000 annually) NNN with 3% increases annually.

Here is my question. WHO IS IN THIS INDUSTRIAL SPACE and HOW CAN I GET ON A ZOOM WITH YOU?

I want to grow in this space. I am ready to stop hitting base hits in SFH and begin hitting more HOME RUNS in the commercial space!

[Henry Clark]

Commercial is a wide range of products.  Bowling alley, parking lot, Medical offices, Self storage, warehouses, MFH (move up in doors), Subdivisions, etc.

A. Since your just starting, recommend you start from your Strengths. Reading your profile. Deacon, Father of 3 girls, Longshoreman, SFH. You already understand all four of these fields, thus you have credibility in those areas. Commercial is a lot about credibility.

B. Just like you did for SFH start doing deal analysis. Go to Loopnet or Crexi and start picking different types of property and doing deal analysis.

C.  Deacon background- look at new or old church properties, or campgrounds.

D.  Father- dentists, orthodontists, dancing, taekwondo, tumbling, softball, etc.  Office or retail complexes.

E.  Longshoreman- trucking, truck washing, truck parking, offloading/staging, railcar, etc.  Loopnet, 00 80 Hwy Garden City, GA.  What would a Longshoreman see in this property?  Plus they are Nasty,  I hate Triangles and so does everyone else.  Figure out how to make them work.  Truck or container storage.  Property looks low or wet, dig out the corners for ponds and use the fill to make rectangular property. 

F. SFH or MFH- subdivisions, see my post on Journeys End or Silver Lake. Don't do the houses, do the lots. Take a junk piece of ground and make it beautiful. LoopNet 00 Staley Ave, Savannah, GA. 5.5 acres $550,000 pre-approved for 17 SFH. We are charging $100,000 to $130,000 for 2 acres in the middle of the countryside. How much would 17 lots in Savannah go for? What is your development cost? Or get rezoned so you can do Boat and RV storage. Its next to a vehicle storage area already. Lay some engineering fabric down and some oyster shell if they allow and you're in business.

Always look for nasty properties and figure out to add value.  Everyone else is looking for good properties they can visualize.