Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes
6y
Commercial. Why? Outside of the higher profit potential, the solutions for the commercial cons are basically all "networking" related. The solutions for the non-commercial are systems and execution related which is more difficult to perfect, especially since margins are too slim to bring in multiple experts.
Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes
6y
Commercial. Why? Outside of the higher profit potential, the solutions for the commercial cons are basically all "networking" related. The solutions for the non-commercial are systems and execution related which is more difficult to perfect, especially since margins are too slim to bring in multiple experts.
Commercial. Why? Outside of the higher profit potential, the solutions for the commercial cons are basically all "networking" related. The solutions for the non-commercial are systems and execution related which is more difficult to perfect, especially since margins are too slim to bring in multiple experts.
I agree with John. The "con's" with commercial can be addressed with the help of other people. I call it leverage on other people's expertise and effort. In addition, I like commercial deals because they are actually more open to creative deal structuring. For instance, commercial lenders are open to you raising capital from other individuals other than you. For residential, that's actually looked down upon. They want the cash seasoned in your bank account for at least 3 months.
In a sense, raising capital for commercial deals is actually EASIER than residential.
Commercial Con's
1. Harder to analyze for the less seasoned investor. How to address: partner with a seasoned investor on the first 1-2 deals
2. Harder to manage for the less seasoned investor due to more tenants. How to address: partner with a seasoned investor and/or find a great property management company
3. Harder to come up with the cash to put down. How to address: partner with a 'money investor' to put up the money while you do the work
4. Harder to find deals without the right network of people. How to address: partner with experienced commercial real estate brokers
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
6y
@Quentin Mitchell I agree with @Danny Randazzo! I love all of the benefits of commercial pros than any of the commercial cons. The fact that you go further and much faster with others. There's less risk out on the table as well. More doors less risk. There's a saying out there, "The strength lies in numbers"
Commercial. Why? Outside of the higher profit potential, the solutions for the commercial cons are basically all "networking" related. The solutions for the non-commercial are systems and execution related which is more difficult to perfect, especially since margins are too slim to bring in multiple experts.
I agree with John. The "con's" with commercial can be addressed with the help of other people. I call it leverage on other people's expertise and effort. In addition, I like commercial deals because they are actually more open to creative deal structuring. For instance, commercial lenders are open to you raising capital from other individuals other than you. For residential, that's actually looked down upon. They want the cash seasoned in your bank account for at least 3 months.
In a sense, raising capital for commercial deals is actually EASIER than residential.
Commercial Con's
1. Harder to analyze for the less seasoned investor. How to address: partner with a seasoned investor on the first 1-2 deals
2. Harder to manage for the less seasoned investor due to more tenants. How to address: partner with a seasoned investor and/or find a great property management company
3. Harder to come up with the cash to put down. How to address: partner with a 'money investor' to put up the money while you do the work
4. Harder to find deals without the right network of people.
I can't say that I disagree I think commercial is definitely the way to go for all the reasons you mentioned.
@Quentin Mitchell I agree with @Danny Randazzo! I love all of the benefits of commercial pros than any of the commercial cons. The fact that you go further and much faster with others. There's less risk out on the table as well. More doors less risk. There's a saying out there, "The strength lies in numbers"
Besides the common pros and cons, a lot depends on you. "What do YOU want to do when you grow up!". Where do you see yourself down the line? What's more important to you? Some people want to make enough to have a job-free living and enjoy life, others want to take it to the top and never stop, there're others in the middle of course. It's up to you to decide where you fit best!
@Quentin Mitchell I agree with @Danny Randazzo! I love all of the benefits of commercial pros than any of the commercial cons. The fact that you go further and much faster with others. There's less risk out on the table as well. More doors less risk. There's a saying out there, "The strength lies in numbers"