Invest or Hold

[Joseph Dasmerces]

Hi,

I'm new to the commercial space, i have long term and STR investments but have always been interested in commercial.

I would love to know everyone thoughts on investing in commercial real estate at this time? I know there are some banks that are or will be taking some losses in the near future with commercial loans and was curious would you wait or invest now? 

Thanks

Joe

[Evan Polaski]

@Joseph Dasmerces, timing the market seems to almost always be a losing strategy.  

Solid real estate will generally continue to be solid real estate.  And commercial can mean many things.  From a lending perspective: a multifamily building with 5 units or more is commercial, because Fannie and Freddie won't lend on it.  Maybe you mean office, or retail, or industrial, or hotel, or medical...

The moral being: if this is a space you want to get into and build a career out of, then getting in now is always the best option.  But, you need to understand the nuances of each.  If you don't know what phase 1 and phase 2 reports, ALTA surveys, lease estoppels, lien releases, etc are, then digging down the due diligence rabbit hole for a while could be a great option.  Talk to commercial lenders, since they will be dictating a fair amount.  Talk to brokers.  Go to industry events.  

In my experience, the commercial people (meaning not multifamily) are career professionals. There are very few meetups for people looking to buy Kroger anchored shopping centers or 1mm sq ft warehouses.  So you need to dig harder and pay money: ULI, ICSC for retail, CCIM (if possible without holding the designation), etc.