All Forum Posts by: Gene Jordan

@Timothy Solomon. Sorry for the assumption, but as a dermatologist with multiple locations I assume you have a bit of cash to start. I LOVE commercial. NNN leases, long term tenants and build outs that add value to your property. For W2 folks getting started, residential is the easiest way to get started due to lower down payments, costs, etc. However, if you have the means, commercial can be very rewarding once you put a property on "cruise control".

Just one person's opinion, but I hope it helps!

Has anyone used the FREEandCLEAR lender directory and how was the experience? Was the lender of good quality and were your needs met?

@Lauren Akins. I'm 49. My gauge is thinking of a worst case scenario of a possible future. By the time I'm 70 what will the economy be like? What will my health be like? How will my loved ones be doing financially?

My mind's eye says $20k of net income. The equity in the property to be able to generate that should be plenty to pass on to my 2 daughters and my grandchildren to give them "a leg up" on their journeys to the end.

Good question! Allowed me to think of a way to POSSIBLY say "enough is enough, I'm done". 🙂

Investment Info:

Industrial commercial investment investment.

Purchase price: $815,000
Cash invested: $27,000

Purchased a 5 acre 2 building industrial park with below market rents and many possibilities. Raised the rents on 10 small units to market and all tenants stayed. Found a renter for 9600 sf building to replace industrial renter and build out a billiard club. Rolling smoothly now with a 17+% Cap Rate. Certainly my best deal to date.

What made you interested in investing in this type of deal?

My enjoyment of finding situations and people that can be brought together to make everyone involved profit.

How did you find this deal and how did you negotiate it?

Local property. Used and agent with a standard deal.

How did you finance this deal?

Standard bank loan.

How did you add value to the deal?

The money was in the conversion of an undervalued situation.

What was the outcome?

Unbelievable cash flow and structured to very "hands off".

Lessons learned? Challenges?

Helping new business owners with their buildout and being a liaison between them and the municipality. Smart people but inexperienced. Well worth my "free" time to get them going in the end.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Actually, no. This prompted me to get my license and do deals myself!

Who has a system or formula that they use to decide when it's time to sell and reinvest into a higher value property or properties?

When is the "sweet spot" to sell?

How do you compare new prospects to the current situation to see if the move is worth it?

What numbers are most relevant?

What other factors or conditions influence your decisions?

My situation: Bought a five acre industrial park for $815k. Took total rents from $8600/MO. to $13800 with long term lease in main building and $150k in upgrades done by tenant. So, structure value as well as cap rate have increased quickly.

What sell price would be needed to give up the $7k cash flow?

How does one decide to flip or hold? And what sell price would it have to be to give up the

@Nathan Leger I bought two multifamily, a single family and a 5 acre industrial park. THEN I got my broker's license, read books and watched YouTube. All the learning did was reaffirm that I made good financial decisions as in any other business. After all the jargon and industry specifics, business is all the same. I bought all that stuff in the beginning because it's my personality to do so. If it is yours, you will too. If not, then don't stress. Just do you and be happy. Hope this helps!

@Jeff S. I'm just now getting my estate planning organized and put together. My situation (in Illinois) seems to be going towards 2 series LLCS with operating agreements pertaining to each of my daughters. If my wife and are both gone, these ever changing (as I buy and sell while alive) holding companies can be tailored for the exact properties that I want each girl to have. Everything else is handled in a will (with percentages rather than fixed amounts for all my heirs). This way, no matter what my situation is while I'm alive, when I die, everything is already in the right spot without any updating. Doing several deals a year could make things messy. My girls being over 18 and having a traditional family unit make this possible. Obviously, not for everyone.

I have had a good start buying multifamily properties and would like to keep it going!  Currently working with a rehab that may bring cash flow but might not bring the resale value.