All Forum Posts by: Trung Nghiem

Been reading this forum and there are a lot of great information on investing and how to buy properties that can returned a nice monthly income. Most of the discussions that I have read here been related to single family homes, duplex, tri-plex and 4-plex. Which is a great starting point for investors starting out and getting their feet wet.

Does anyone here have any experience in commercial properties (ex: commercial building with 2 to 3 business clients). I am not talking about something huge here, but maybe a small building by local hospitals. Where you see a lot of doctors owning their own private practices.

Just wondering what it would take to get into these buildings? Kind of the same requirements as a 4-plex? What kind of return can be expected from each door/client.

Thanks for the reply. It makes more sense now on how investors are able to continue to buy more properties when they just started with one. Being conservative and frugal is really the one viable way to acquire new properties. Like I said, I won’t assume rent increases and property appreciation as a way to buy more properties. Cash is king and having good cash flow plus continue to stock away money will be the key.

Been reading this Great website soaking in all the good information that is out there.

I am somewhat puzzled or there seems to be lack of information on how savvy investors grow their business from one income producing property in a short time.
So I pose this scenario, maybe you guys can educate me on how one would grow one property to many?

Real Estate Scenario (ball park numbers for sake of argument)
Investor A bought a 4-plex
Purchased Price $300,000
Down Payment $60,000
Property is managed by property manager

After all said and done, Investor A is able to pocket $450.00 per month (avg. $112/door) Investor A is an conservative investor, he puts away the $450.00 for three whole years, giving him about $16,200 in his bank. Using these numbers and his conservative approach to savings, he would only have around $16000 after 3 years of saving. How would Investor A be able to buy another 4-plex given he spent $300K on his first investment with $60K for down payment.

Investor A can’t assume that he can raise rent in order to pocket more per door. Even after 3 years of paying his loan, he’s probably just been paying the interest on the loan and made very little impact to his principle.
For his investment property, he still has 80% LTV, so Investor A probably is not able to have any equity line available for him to leverage against. Investor A also can't assume that his first property will appreciate enough where he will be able to tap the equity to buy another property.