All Forum Posts by: Christopher John McCarthy

@Juan De La Garza

Completely agree with you Juan. That's what I'm going to do. I will find someone whos already successful in commercial real estate and find a way to offer value to them so I can learn from the expert. If I get lucky maybe he would be willing to even help me on the first property. 

Thanks for the insight!

Best,

CM

Hey Everyone!

I've recently decided to move to Colorado Springs on August 1st to put my roots down and start acquiring commercial multifamily real estate (target 1 per year). I've based this decision on a combination of both quantitative and qualitative analysis of the area. 

My current role allows me to work remotely and I make decent money, but I'm planning on quitting and focusing all my energy on this business so I can learn everything there is to know and maximize my chances of success and financial independence.

I plan to move there, secure a one-year lease, get a deep understanding of the market and area, find a partner, and build a team of professionals.

My question:

Based on your experience what role/jobs/opportunities would you be looking for to get the best feel for the commercial multi family as a whole? I've considered applying to property management roles and office tenant representative roles but I've talked to some property managers for commercial apartment companies and they've told me it's mostly clerical work(i.e signing new leases and invoicing for fees). 

Should I be targeting larger or smaller companies to learn the most about the business? Or am I better off continuing to read as much as I can, just keep my day job, and learn as I go when the right deal comes up?

Any advice would be much appreciated from people in this field willing to share some of their insights. 

Note: Originally I considered doing a residential multifamily house hack but after learning about how CAP rates are evaluated on commercial property and how you can significantly increase property value just by increasing NOI my mind is made up. I'm planning to do a buy-and-hold strategy. 

Thanks 

CM

@Steve W. 

Yeah, I think it's important to check out the areas before making a choice so you can get a feel for the intangibles. The way I see it, the cost of the fights will pay for themselves in the long run.

Disclaimer: This is just my opinion, but for what it's worth this is what turned me off:

1. The downtown areas of Scottsdale, Phoenix, and Mesa, seemed a bit manufactured and didn't really appeal to me.

2. The zoning is very strange; you will have lower-income areas stacked right next to luxury high rises or shopping centers (and the airport is dropped right in the middle of everything).

3. I love to be outdoors but I'm not a huge fan of the desert landscape, I prefer lush greenery. 

4. The properties all seem so expensive (this is just by bias from Chicago's neighborhoods)

What I do like:

1. The great weather and unique landscape (felt like I was in a Florida climate but less humid)

2. Historical appreciation 

3. My friends live there 

Ultimately, it came down to the fact that the idea of moving there didn't really excite me. 

Best,

CM

@Dallon Schultz

Hey Dallon, thanks for the wise words. My thinking at this point is just to maximize my upside. I'm at a place in life where I don't have deep roots yet so figured I'd try to move to the most optimal market conditions (and quality of life) for success.

I was just in the Phoenix area for three weeks and I was driving for dollars around the Mesa area a bit. It amazed me how much new construction/development was going on everywhere you look. I think that's the most I've ever seen in such close proximity. Something was being remodeled on every block!

Best,

CM

@Steve W.

Wow! Steve, this is a fantastic market analysis. Thanks for breaking down the data, providing the graphs, and approaching it from different angles. Definitely feel more certain of my decision to leave Chicago so I can maximize the upside of appreaciation.  

I agree that the most important thing is quality of life so that's something I have to weigh heavily too. On paper, Colorado Springs makes the most sense for me, but I want to get a feel for the area and see if it's somewhere I could see myself living long-term and get excited about.

What surprised me from the data you provided was just how quickly Austin whipped back to normal after COVID (with Colorado Springs being the second most stable recovery it appeared). Also interesting while Chicago's average income is on par with those hotter markets its job growth has been essentially non-existent over the last few years. 

Thanks again for the thorough quantitative analysis. Planning on printing out those graphs to keep handy!

Best,

CM

@James Carlson

Hey James, thanks for the tip on house hacking a SFH 4/2 in Colorado Springs, I'll definitely have to look into that! Yes, I'm trying to house hack wherever I move so I can practice being a landlord while building some equity. I just got back from spending three weeks in Phoenix and it didn't really do it for me (so I think that's off the list along with Chicago). The next trip will have to be Colorado Springs and Denver then Austen!

Best,

CM

@Mark Killion

That’s for sharing this info Mark!

It surprised me that the cap rates were so close in areas like Albany Park and Logan square, even though the multifamily homes prices seem to be more significant divergent.

Best,

CM

@Melanie Johnston

Thanks for the awesome tips of things to check out Melanie 👍

I’m actually writing this while at the airport to visit my friends in Phoenix for a Harley trip, so I’ll have to look into some of your recommendations while in town (for 10 days).

I’ll check out that group and put some of my thought in a post in there once I evaluate a few of the properties in the area ( I’m curious to see how the multifamily market compares to Chicago’s).

Overall I do think it makes sense for me to be more west since that’s where all my family and friends have migrated from Michigan. The insane appreciation in the areas they’ve moved is just a potential bonus.

Best,

CM

@Paul De Luca

Hey Paul,

Thanks for taking the time to respond to my post!

I agree with you that it’s pretty hard to find properties that meet the 1% rule in Chicago in this current market, alight I’ve found one or two in Albany park.

Definitely plenty of opportunity in this great city. I just think I’m gonna ready to explore somewhere new and I want to invest in an area with lower property taxes (and positive population growth).

Best,

CM