Commercial Renovation Project

[Mark H.]

I'm an SFR investor interested in buying NNN property in bad shape for 500k and to renovate it for 600k-1mil (to take advantage of the tax reform benefits). Are those numbers realistic at all for investment in NNN or should I be looking at residential MF instead?

[Cory Hoffman]

If you are considering NNN properties, probably 2 of the best types to consider would be retail (strip centers, single tenant properties) or small bay industrial. With both, the key is location, location, location! With retail, good size units are 1500-3000 SF as there are a lot of users for these sizes. As you get larger the users are less. Any retail center, if well located, will lease if you realistic on market rents. With industrial, again 1500-4000 SF are good unit sizes. Again location is important, users like to be near major access roads for convenience. Sizes of truck courts and parking is important too. With both of these types, the tenants typically do most of the specific build out, with landlord only required to provide the basis like bathrooms, lights, HVAC, etc. Multifamily is also something that is a good type of property to start with for the beginner.