Making the jump from SF investing to CRE investing

[Benton Moss]

Hello BP community! 

Hope all is well with everyone. I am a newer investor from eastern North Carolina and have completed my 4th SF rental deal as of December 2016. I have all four units rented and cash flowing nicely at the moment, and want to tap into the great resources of BP to learn more about what it will take for me to begin really experiencing the compounding effect of equity and cash flow in RE. So, I wanted to reach out to the BP community to hear from investors who made the jump from SF rentals to other types of CRE by asking for your brief case study with the following:

If you had SF rentals and made the jump to CRE:

a. How many units did you have before you felt comfortable making the jump?

b. How long did you wait from when you began investing in SF to make the jump? I.e. how many years of experience did you have when you made the jump? Why?

c. What type of property did you purchase as your first CRE investment? MF? Self-storage? Office? Retail? Why?

d. How did you finance the deal? Did you get creative? Did you pledge SF rentals as collateral? Seller financing? Traditional financing? Wraps?

e. Overall details of the first investment (whatever you feel comfortable leaving): Purchase price, negotiation details, financing structure, end result of the investment (still holding, flip, bad result, etc.)

f. What you wish you knew going into the deal. 

Thanks everyone and I wish you all happy investing!

[Juan Vargas]

I think these questions really depend on you. Some guys never really feel comfortable jumping into commercial and stay with residential. Others jump right into commercial. You really would have to start with educating yourself on the many ways to invest in commercial. I started with 2 sfr before I jumped into a 32 unit multifamily property. It was only because I thought that we all had to start with single family first before even thinking of multifamily. Looking back and if possible, I would have started with multifamily from the start. Think big.