All Forum Posts by: Joel Krieger

For those that plan on self managing, be aware that the learning curve and technology training will require a significant time investment that is going to be steep. But it could be worth it if you have the time and patience to master all of the essential elements that go into management--maintenance, rent collection, leasing, and general business administration. If you absolutely master these skillsets you can self manage and find ways to minimize the stress and the chaos of day to day management. But if you're only planning to go halfway and not give it 100% then you're better off hiring a professional manager. If you do hire a 3rd party property manager, make sure to check accreditations (IREM ARM/CPM) and get references.

Investment Info:

Office Space commercial investment investment in Allentown.

Purchase price: $555,000
Cash invested: $140,000

The second office property I purchased is a 6,000 square foot former law firm office with 17 rentable office spaces and 2 co-working spaces. Lease up is 60% done. The property features a lobby/reception area, large conference room, copier, kitchen/break room, and server room.

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

Great layout with many individual offices that appeal to a variety of office tenants.

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

The property was listed int he MLS.

How did you finance this deal?

Local credit union lender.

How did you add value to the deal?

Minor repairs and updates, adding furnishings, and leasing up.

What was the outcome?

The property is leasing up quickly.

Lessons learned? Challenges?

A great office building layout makes the tenant decision making easier and leases up faster.

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

Lehigh Financial

Investment Info:

Office Space commercial investment investment in Allentown.

Purchase price: $365,000
Cash invested: $96,000

1600 Hamilton was purchased as a largely vacate commercial office property. The light renovations include new paint, sanded hardwood floors, and upgraded fixtures. The office is configured as 10 individual private offices with a co-working space consisting of 4 desks. The office building was leased up in 4 months and the tenancy now includes a law firm, a marketing company, and engineering firm, and a software developer.

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

I like small professional office buildings because of the quality of the tenants.

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

This property was listed on the MLS.

How did you finance this deal?

Local credit union lender.

How did you add value to the deal?

Light renovations were done and then the space was fully leased.

Lessons learned? Challenges?

Professional office tenants want private offices as opposed to co-working desks.

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

Lehigh Financial is the best commercial mortgage broker in Pennsylvania.

Regardless of whether the property is being sold as turnkey or not, definitely get a property inspection and find out what issues are discovered.  From my experience you want to make necessary repairs with a qualified contractor to baseline a property on day 1 so that all critical elements--roof, plumbing, appliances, and mechanicals--are fully functional and you have an understanding of the remaining useable lifespan. The biggest miscalculation for me when just starting out was underestimating the need for adequate replacement reserves to minimize disruptions in cash flow.