Looking to pivot into CRE - Have money, not knowledge

[Justinian Lane]

I'm in the process of cashing out of an unrelated business, and want to pivot into commercial real estate.  I'm in a position to invest $50-100k per month for the next 24-36 months, and am not sure where to start.  My initial plan had been to start purchasing cheap residential properties and to build a portfolio of those.  My assumption is that I would eventually hit a scalability issue and end up pivoting into commercial, so I'm thinking perhaps I should start with commercial?  If you've got any tips on where I can go to start learning, that would be fantastic.

I know there are a lot of scams out there designed to lure in dreamers and then sucker them into useless classes and seminars.  Are there any classes, videos, etc. that are reputable and designed for people with more to invest?  If it matters, my interest is in developing in the Phoenix or Austin area.

[Joel Owens]

 Investing cash and developing are 2 totally different things.

Owning 100% directly for passive income and then instead being a passive investor in a syndicate or similar have various pluses or minuses.

If you are an accredited investor then putting 50k to 100k at a time into syndicated properties as a passive investor might make sense.

My clients buying commercial directly typical for strong suburban to urban core areas are millions in price and 30 to 35% down so 750k to 800k at a time with a loan for remaining balance to own directly. The sub 1 million assets tend to be in weak areas so not worth the trouble.

You could invest with syndicators and look at a spreadsheet each month for diversity. You don't make the decisions on the asset and have limited control with the exit timing, capital infusions if needed, etc.

As for being a real estate developer nobody that I know of is going to spend time training you up for free. They tend to make thousands to tens of thousands of dollars per hour for their time. They are running businesses and making money just like anyone else. There are fee for developers but they usually run 100k per project sometimes. You have to PAY for quality experience and help. No way getting around that. You could invest with a developer on one of their syndicates and see how the process moves along and learn that way. Now they are not typically going to answer tons of questions night and day they are going to give reports to investors and occasional updates. If someone wants ground up day to day training a syndicator does not usually have time for such things.

If you want to learn on your own plan on spending thousands to tens of thousands of dollars for certain high level development courses taught at colleges and similar by developers giving the course or professors. There are also books that are hundreds of dollars or more with good info.

ICSC has a book library, ULI Urban Land Institute, NAIOP, etc.

You have to decide if you really love developing or want to be a passive investor. It's all about your goals.