Making the Jump to Commercial

[Ley Nezifort]

Hello BPers,

My partner and I are ready to jump into apartment building investing one month after we closed on our first deal, which was a triplex. We spent about three weeks educating ourselves on the differences between the residential and commercial space, and now we’re ready to take actions. Our goal is to raise the capital using private money, and close by the end of January 2020.

We are looking for a value-add 20+ units deal in one of the following markets

Philadelphia, PA

Jacksonville, FL

Atlanta, GA

Orlando, FL

Dallas-Forth Worth, TX

We’re currently putting together a team in each of those markets, so any recommendations for commercial lenders, brokers, property managers, attorneys, etc... would be highly appreciated.

The question I had for each of you was: How long did it take you to jump from the residential space to commercial? And if you haven’t done so, what are you waiting on ?

[Charles Seaman]

@Ley Nezifort I started out in multifamily syndication, but it also helped that I had a background working for a commercial investor for 14 years before doing so.  I can provide you with a recommendation for a mortgage broker that's very knowledgeable of the Atlanta market.  Message me and I'll send it to you.

The markets that you selected are all good markets, but you're going to have a full plate with any one of them.  My first recommendation for you is to pick ONE of those markets and start there.  After you close a deal (or preferably a few deals), then look at doing deals in other markets.  Each time you start working in a new market, you'll need to build a new team in that market and you'll need to spend time familiarizing yourself with that market.  When you're competing against multiple groups for the same deals (and you will be because competition is fierce right now), that's valuable time that you won't have.  I made that mistake starting out and spent the better of my first year looking at deals anywhere east of the Mississippi River.

Considering that it's already late October, it's also unlikely that you'll close on a deal by the end of January 2020, unless you already have something in the pipeline that's moving forward.  Syndication deals typically will take 60-90 days to close.  It'll often take significantly longer than that to find a good deal that's worth moving forward on.

Hopefully this insight helps give you some direction.  There's a lot of money in the syndication business, but it's definitely a long-term play and not something that you'll be making big money off of from the get go.