All Forum Posts by: Account Closed

@Michael H. I have a bookkeeper referral for you in the Atlanta area.

 What is the property currently zoned? Check you local zoning ordinance to see what uses are allowed at the property. When you find out what is permitted, or specially permitted, that will give you an idea of what the highest and best use will be to re-purpose the building. You also may want to consider re-opening it as a hotel and utilizing a hospitality manager to manage operations. Hopefully this helps.

I have sold and leased automotive related use properties. The property may need repairs being a foreclosure. Once you have it ready to lease, you should easily attract tenants because of the allowed uses and zoning. Automotive businesses are always looking for space.

I would like to connect with BP members in California that are getting started in real estate investing out of state. I have spoken with a few BP members that are seeking commercial investment opportunities outside of California, specifically in the Greater Atlanta area.

The key to out of state investing is to target a metropolitan with strong demographics and a property that is low-risk, with little to no management responsibilities. Because California based investors are conditioned to absorbent prices for real estate and costs of living, I have found they are pleasantly surprised to see that price points are lower, returns are higher, and the class of the properties is better in Georgia. 

I am originally from San Jose, CA the Capitol of Silicon Valley and recently re-located to Atlanta, GA. I spend time in both states. My career has been in real estate, finance, and SBA business consulting. I used to hold real estate Meetups in Downtown San Jose and cryptocurrency Meetups in Santa Clara. I have also lived and practiced real estate in Los Angeles and Sacramento. By next year, I will be hiring commercial agents in California and Georgia to expand my brokerage coast to coast!

@George Ozoude the medical industry in Houston is doing well, so I would imagine with your busy schedule that establishing stable passive income now could help set you up for retirement in the future. Triple net leased commercial properties, or NNN, are one of the easiest assets to manage because the tenant pays for all of the operational expenses and maintenance that a residential landlord would typically have to pay. Some examples of NNN properties are Starbucks, McDonald's, US Post Office, Jiffy Lube, Dollar General, Walgreens, and Aspen Dental.

You are doing a cash-out refinance and will not need a down payment. You will need to pay for appraisal and closing costs. You should be able to cash-out 50-70% of the newly appraised value, which would likely be a similar value as the recent appraisal.

"The commercial real estate is business-focused real estate which involves property that is sold, leased or used to achieve a predetermined business objective. Commercial real estate is used as an investment to gain an anticipated rate of return on the funds invested. Whereas, residential real estate involves the needs and wants of a homeowner and his family. The property is purchased for individual use and most often to provide housing families, but how can we compare these in terms of investments?" via Reddit.

• Commercial leases range from 5 to 15 year terms. Residential leases are typically 1 year terms. Residential properties are flipped within 6-18 months. Commercial properties are stabilized and re-sold in 5-10 years.
• Financing for residential investments ranges from 75-90% LTV. Financing for commercial investments ranges from 60-80% LTV. 1-4 family homes qualify for 30 year mortgages. Commercial loans are never 30 year terms, they're usually 5-10 year terms amortized over 25-30 years.
• Tenants in your commercial properties are normally responsible for things that a owner would be for residential. If the HVAC breaks in a commercial property - the tenant gets it fixed. If it breaks in a residential, tenant will call you to get it fixed.

Please chime in with other differences between commercial and residential investing. This topic is to help prospective investors transition into commercial real estate.

Hi @Sandra Holt,

You can deduct mortgage interest and property depreciation expenses as a property owner. When leasing, you can deduct the entire monthly payment. However, as an owner you are gaining equity every month that you make a mortgage payment. As an owner, you also have the potential to earn additional income from leasing the other units and potential to gain additional equity as the property appreciates over time.

Warren Buffet is a net leased investor. - "Among the property types in Store's portfolio are health clubs, pet care centers, movie theaters, auto auction centers, furniture stores and manufacturing plants. Store's biggest tenants include the AMC Entertainment movie theater chain, an Applebee's restaurant franchisee and an Ashley Furniture HomeStore franchisee."

 Yes, exactly. These types of investments allow you to manage one commercial tenant at a time that may have an investment grade credit rating. The tenants that do not have an investment grade rating typically offer higher returns to offset the increased risk. Overall, they are easier to manage than multifamily properties because the tenant pays for the property maintenance, taxes, and insurance. Prices for these types of properties are generally lower outside of California, with higher cap rates.