All Forum Posts by: Paul Cijunelis

The "best" way is what works for you. To answer that is only something you can do. Sorry to be blunt but it's the truth. Why? this depends on three things:

1) your work ethic and personality

2) your hunting and acquisition budget

3) your time

TIME: If you're working full time, door knocking is out of the question. If you're living in an A area and cannot afford an A area property (hard to find anyway these days) and you need to drive a while to even get to an area you are interested in, door knocking is not for you.

BUDGET: can you afford to do 1000 postcard mailings a month for 6 months straight? Do you have a website? Can you spend money on a CRM, automations, VA calling service, a VOIP phone system, etc? All this is stuff other wholesalers and off market companies invest in to find deals (like me).

WORK ETHIC: be honest with yourself...how willing are you to go down this road? Can you talk to someone who is being foreclosed and handle a discussion like that? Can you knock on someone's door and be "likeable" and get invited inside? off-market deals can sometimes be the most emotional situation you will encounter. 

It might be best to simply go to a local REIA networking event and meet some wholesalers that have been doing this for 15 years and buy a deal from them. Sure it will cost a bit more but if the numbers work, the numbers work. And how much would you have spent in time and money to even find a deal?

I personally would recommend the last method. Find some wholesalers. After time you can start finding them on your own after you learn more about the business. I hope the honesty in this post has given you some things to think about and I wish you the best of luck in your real estate journey.

Ask what their monthly fees are. Around here they range from $35 to $300 so that would be my first question! Good luck.

@Sean Graham my 13-unit is right there. Looks like we'll be neighbors...!

I agree with @Nathan Gesner on gas vs electric as well as the capex to do the switch. If the boiler is functioning fine, why change it? Boilers are usually more efficient, in addition to gas vs elec debate. I am not familiar with NY regulations, but investigate whether you can charge each tenant ~$80/mo for the gas (do the math). See if you can get a historical expenditure for this utility and take that yearly cost and divide it by the total SF of all units to get a per SF cost of gas for the building, then multiply by the SF of each unit for a monthly cost for each of the 4 units, themselves. 

Right now you say it is $400/mo but in the summer it is much less so you need an average. you can't gouge tenants or you'll get a phone call one day from a lawyer. Add $10 (or a "reasonable cost" whatever NY defines as reasonable. Here $10 is reasonable) to each unit's monthly cost for the work to handle this utility cost and associated billing and put this in writing in each lease renewal. Lease review with a lawyer and you have now passed the costs to the tenants. Send reminders in the winter about the heat and to conserve energy. Problem solved for much less expenditure. But again review with a local attorney! Good luck.

@Joseph Alfie good morning. I just went under contract a bit ago for a 13-unit a bit East and North of there. Just bordering Jackson Park. One never knows whether an area will gentrify but chatter on the street is money is flowing in the South Shore. Not sure if your property is in that area as you are a bit West. There's supposedly a large medical center being planned, which will also need convenient housing. Obama's library is in the area, etc. I'm interested in this property basically for the upswing I think is coming. But again, Chicago is a town where if you are one block over from the good area, you can go from an A to a C crossing the street.

Seriously consider hiring an attorney that does there. Especially if the property is not yours.

@Robel Nessro good morning. You'll do well if you're this disciplined at 18! To learn about CRE the best place right now to get a general sense of the business is something like chatGPT. Just start talking to an AI engine as though it was a mentor. You'll learn a lot! The question I would have is why are you interested in CRE? CRE for an individual to me seems very bland. Empty buildings, not much to get excited about. Why are you interested? What's your goal(s)?

If funding is an issue, you do have some options. Commercial RE is a bit more strict than the residential market which has more options available due to flexible housing regulations in place to make it easier for people to buy their primary residence.

1) Family and friends. Anyone you can team up with? At 18 with an interest in CRE I'd be surprised if you didn't get influenced by someone you know? A friend's parent? Did you share your interest with anyone you know?

2) Local RE meetups. Yes, these are great for meeting people and networking and learning. There are always private money lenders there and people who will partner up on a deal. Most meetings are filled with people who don't exactly reach out to meet new people so if you go be prepared to be outgoing and honest and FOLLOW UP with people you met but don't be demanding. It will take time.

3) Property management companies, chamber of commerce meetings, local commercial RE brokers, etc are all additional options to network and find people who do deals. You won't FIND a deal in this area but you will meet people doing deals and someone might be willing to be involved in a deal with you if you go through points 1 and 2 first. Just keep in mind again these people are working and trying to make money so try not to be a time-suck for anyone. Always think about the other side of the conversation. Try and make it worthwhile for them and you will develop a relationship.

4) to find properties, start calling owners. Look up owners' info and reach out to them directly to find a deal. "hello, my name is ---, I'm interested in acquiring a commercial property like yours. Have you thought about selling?" Good luck

My only reply here is to say to simply focus on the business objectives. Collecting rent, preserving the asset, minimizing vacancy. How hard is a zelle payment to deal with? You have one property. You're going to torpedo a tenant relationship over this? I'd simply explain they can use Zelle until the renewal, then the portal will be the preferred method. Because Zelle requires more data entry I would explain with the new lease there will be a small and reasonable processing fee if the tenant kept with zelle but they can still use it. I am not familiar with Avail and whether a LL can view credit history. Seems like an errant statement but I don't know. A lot of suggestions here are very confrontational. Good luck with your tenant.

Is that 450-600k equity over and above a 70% LTV? You're netting $5k/mo and have no cash available and you're working a civil engineering job? Did you just use all your cash on a new acquisition?

I'm not familiar with Canadian regulations but you should look into how you can get access to money if you don't have any. A LOC would help. It's also unclear what you're intentions are. Commercial acquisitions or new construction?

Commercial deals are going to look at your qualifications as an investor as well as the DSCR value of the property supporting itself (at least here in the USA).

For construction, you will need to look into licensing requirements such as a GC license. Here in the USA you have to be licensed to build a structure that will house someone else. Even if you're the GC not swinging the hammer, you need a license. For the community development dept, you'll need proper plans (architect), site survey, permits, etc. when you're ready. Talk to your local building department for the codes they follow and requirement(s). A phone call will answer all the questions or a quick visit is better, set an appt. Here in the USA you need what's called a "construction loan" and it's also very hard to find a company that will insure you if you're a newbie. Make friends with some bank presidents, seriously. You might need to be interviewed (ask me how I know). Then you'll need to find land, acquire it, find a spec home buyer and set up meetings to design plans or buy a set online with mods. Of course have your costs researched first bc the buyer will want to know how much it will cost them to buy. Is it in-line with other builders? Then it's simple, build the home, find crews to do the work (you should already have them basically from the prior step), excavation, concrete, sealing, framing, roof/gutters/siding, windows, insulation drywall, plumbing, HVAC, electrical, finishes, etc. basically in that order. It's a huge undertaking. I've done it, I know. Good luck.

 Kaleb, good morning. My opinion on this is split between two answers:

1) invest in your backyard. Obviously you can maintain a stronger presence and level of involvement investing in properties near you. You know the areas, etc. Many benefits to doing so. 

2) If you are going to invest outside your area, the one thing I rarely see mentioned here is simply the "investment landscape". What I mean is look for areas that are favorable for investors / landlords. This is a two-sided beast. The first thing here would be the regulations and laws governing acquiring properties, managing properties and selling properties. Taxes, costs, eviction complexity, etc are going to be a much bigger factor in your success than anything else. The second thing would be simply the costs, themselves. How pricey are comparable properties and their costs? Just throwing a fake example here: a 3/2 SFR in NY vs a 3/2 in OH, MI, IN etc. what are the property taxes? If you had 150k you could buy one 400k property with 8k property taxes that rents for 2500/mo or you could buy two 200k properties with say 3k property taxes per month each renting for 1800. In the first you have one tenant, 2500/mo revenue and higher costs. In the second you have two tenants with 3600/mo rents and lower costs, if one moves you still have 50% revenue coming in diversified across two properties. Again, these are made-up examples but when I started, I was looking at one property in Chicago vs THREE in Indiana and the property taxes overall were about 1/4 the cost of Chicago and evictions of 3wks vs 6 months or more in Chicago. So guess which route I started with?

Let the numbers tell you where is the best area, for you.

Oh, and if you invest out of state, build the PM costs in the deal. You'll want a property manager.