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Updated about 1 year ago,
Don't be afraid of buying commercial properties!
In 2018, I discovered a tertiary market in Milwaukee and began investing in real estate there (I live in Los Angeles). The town had been depressed for decades, with very low prices and minimal demand, mainly due to the lack of growth stimulants. I entered the market anticipating new manufacturing in the area and believed it would be a growth zone for years to come. Over the following 4 years, it was relatively easy to acquire properties as there was minimal competition, and prices were at rock bottom. To ensure success, I researched the area and the upcoming job market trends, which made me optimistic about the market. Consequently, I've purchased 18 buildings since then.
By chance, I developed an affinity for a downtown setting featuring mixed-use and office buildings. Mixed-use properties have retail on the first floor and apartments above. I purchased several of these and conducted necessary rehabilitation work. Once the units were renovated, they were quickly leased out for 3-4 times the previous rents, both for the retail spaces and apartments.
With the assistance of my wife, who is a designer, we launched seven highly successful Airbnb properties. This town, situated on Lake Michigan, benefits from a mix of tourism, business, and hospitals.
Subsequently, I acquired three office buildings. The first one, spanning 27,000 square feet across three stories, was only 30% occupied in late 2018. However, by 2020, even during Covid, we achieved 96% occupancy - an incredible feat owing to our foresight in identifying a growing market.
Another office building is currently 85% occupied, generating significant positive cash flow, while the third one is undergoing extensive rehabilitation.
It's not accurate to claim that the office and commercial sectors are doomed, with no interest in leasing or purchasing. It's more about understanding where your market stands within the growth cycle. There are always lucrative deals available; the key is to seek them out.
I hope this insight into what's achievable has been helpful. I have numerous stories about financing through local banks, seller financing, off-market and on-market purchases, profitable sales, etc. Feel free to send a direct message if you'd like to hear more.