Best Way to Start with Commercial REI and Finding a Mentor

[Sonya B.]

Hello,

I'm new BP and REI – a complete newbie in fact. I live in the Houston, TX area and want to concentrate on Commercial RE. I'm interested in both apartment complexes and office buildings. I originally thought I would need to invest in residential (SF – 4 plex) before moving on to commercial. But after reading several posts here on BP, I'm rethinking that. From my research, I now believe that commercial is really quite different from residential, and beginning with residential if I want to be in commercial holds no benefit – aside from offering quick deals (cash flow) I can use towards commercial deals. I'm currently looking at a few 5-6 unit facilities in my area. I've been using a few well known sites to practice finding deals and analyzing them. There is a lot to analyze in a commercial deal!

I’ve also been researching and asking about mentors, both free and for-pay. Considering my experience level, I’m thinking a mentor would immensely benefit me; however, I don’t personally know anyone who invests in commercial RE and most of the for-pay mentors I’ve come across are quite expensive. If I affiliate with one those for-pay mentors, it would significantly delay my ability to get out there and purchase. Seeking an experienced commercial investor (who doesn’t mentor through a structured guru corporate environment) willing to dedicate one on one time with a newbie has not proved fruitful either…which I understand. 1) Most of the people I’ve run across (at my local RE clubs) who could act as a mentor focus on residential deals, and 2) It’s not as if I’m able to bring my own network or any RE experience to the table. It has been suggested that I join one of the local syndication RE clubs to get a mentor, but again, they are super expensive (they offer different packages and the commercial mentoring packages are $15,000-20,000).

Finally, here are my questions.

• 1) In your opinion, for a beginner, what is the best way to begin with commercial RE (small 5-6 unit apt complexes, office buildings, or would you recommend another investment vehicle)?
• 2) Considering my experience and chosen niche(s), should I pay for a mentor?
• 3) Since I’d prefer not to pay for a mentor, can anyone offer any tips on how to meet a commercial REI mentor? I have a full time career, so quitting to intern is not an option.
• 4) I don’t have $30,000, $50,000, or $75,000+ to invest. My research tells me commercial lenders focus mainly on the deal and not personal finances (though my career pays me well); and, if I could come up with some creative financing, perhaps my lack of funds wouldn’t be such an issue (especially for a 5-6 unit place). Is this true? Do I understand that correctly?
• 5) Any other tips you have would be GREATLY appreciated.

Thanks so much in advance for taking to time to answer my questions and comment. Oh, and um, sorry for the novel.

[Anthony Chara]

Hi Sonya, good feedback from @Account Closed. You don't have to jump into mentorship right away either. You can start small and just learn from someone or someones that have been investing in your niche for quite some time. Learn from their successes and their mistakes so you don't make the same ones. BTW, if they haven't made any mistakes, I suggest you find someone else to teach you. 

Once you get your feet under you and perhaps have done a small deal or two based on your criteria above, then it might be better to reach out to a mentor to help you reach that next level. You should also be able to recoup your investment in your mentor on your first deal too! Either in the form of just creating a killer deal or getting an acquisition fee from your investors for putting the whole deal together. Therefore, I wouldn't focus on the price tag, but on the value of the results of learning from the mentor. I do have a biased opinion though, but I'd love to hear feedback from others on my thoughts.