Noy buying but am curious about how much someone would earn a month if they did
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[{"id": "fxacjm6", "text": "Learn about cap rates and how commercial real estate is VALUED. You will find your answer in researching/watching vids on cap rates.", "replies": [{"id": "fxafeco", "text": "thank you!! I know nothing about all this but I want to. I will check it out", "replies": [{"id": "fxb23d6", "text": "CBRE publishes annual cap rate data by property type and by US metro. Good data to get familiar with trends and valuations.", "replies": [], "depth": 3}, {"id": "fxe6h96", "text": "No problem!! Glad I can help. One piece of advice I wish I was given sooner: It\u2019s a relationship business, so start networking in the industry as soon as you can. You\u2019ll find in this business that more often than not, people are willing to help one another out, because what goes around comes around. \n\nThat\u2019s a good place to start. After that you should delve into the different classes/types of CRE, the economic drivers and indicators for each, as well as the types &amp; structures of leases in each class of CRE. From there you can look at deal process (how deals are evaluated, structured, financed, as well as due diligence &amp; negotiation processes). \n\nIf you want to get really detailed or are a very numbers oriented person, learn how to underwrite properties.", "replies": [{"id": "fxek6z1", "text": "how do you start networking in real estate? Would you just go to open houses?", "replies": [{"id": "fxelr23", "text": "I\u2019m assuming you want to either work in CRE in either sell side (broker, lender, property manager) or buy side (investor, syndicator, REIT/PERE). \n\nYou won\u2019t find the people you need to network with at random open houses. You need to be more targeted and focused in your networking strategy.  \n\nNetworking can be attacked in many ways, but the best is if you use a multi-pronged approach. Linkedin is awesome in the sense than you you can search people by their profession and the company they work for. It\u2019s a great tool you can use to reach out to people and ask to setup a brief call for you to pick their brain. You can call/email brokers (M&amp;M, CBRE, Keller Williams, Cushman &amp; Wakefield, etc) and ask them for OM\u2019s on local properties so you can learn to underwrite and perform due diligence on a CRE asset. Meeting people in person is very effective, you\u2019ll want to seek out events or meetups specific to the real estate investment community and ideally specific to the class of CRE asset you want to specialize in. People come to these events to network. These events may cost you small fees to attend but they are usually well worth it. May or may not be tough to find depending on where you live. Finally, some of the most valuable additions to my network have come from seminars/training courses on CRE. These courses are usually expensive so you\u2019ll benefit most once you have a better idea of what you want to specialize in. The best part is, all of these people will be able to refer/introduce you to people in other areas of the CRE business. \n\nYou\u2019re starting at a very young age. Take your time to learn. It\u2019s a tough game, people like to make it sound easy, but it\u2019s very easy to lose what you\u2019ve worked for. If feasible, you may want to even offer to shadow/work for an investor for free. It\u2019ll get you priceless exposure to the entire process, and help you gain clarity on which part of the business you\u2019re interested in. \n\nSorry for the long winded answer, I\u2019m on very little sleep", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fxar4lm", "text": "About 99% of the Youtube vids are incorrect concerning cap rates.  It's mostly scammers or novices that want to seem all real estatey by using concepts they don't understand.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fxay65k", "text": "You need to look at the rental rate before you set a purchase price, that\u2019s how you know how much you can make. You\u2019ll likely need a rent (net) of $40+/sf to make much of a return. \n\nIt also depends on how much you put down vs. finance, and the financing terms.", "replies": [], "depth": 1}, {"id": "fxb6fes", "text": "Around $90 per square foot", "replies": [{"id": "fxbkxze", "text": "In my market, closer to $30\nEdit, plus CAM, taxes, insurance", "replies": [{"id": "fxbrouu", "text": "According to my calculations, it\u2019s roughly at least $90 per square foot in gross rents needed for this project to be successful. Care to share your calculations? \n\nNo idea why I\u2019m being down voted due to math.", "replies": [{"id": "fxdb979", "text": "You're both wrong. He asked how much he *can* rent it for, not how much he *should* rent it for. It's not something you calculate. You just have to look at comps.\n\nAnd even the $90/sf you calculated is specific to a certain market. A 5% cap rate in Los Angeles is great, but a 5% cap rate would be pitiful in Memphis.", "replies": [{"id": "fxde42w", "text": "He asked a very general question, we don't need to get academic here.\n\nI'm assuming he buys at market and that he rents at market, and there is a market cap rat for whatever he is buying.\n\nMy market has a cap rate of 5% for suburban commercial retail", "replies": [{"id": "fxdeau3", "text": "I'm going to further qualify this based in the idea he isn't buying to develop", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "fxddv40", "text": "5% cap rate in my market", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fxb7xc4", "text": "Call a realtor. In this market you lose. Tenants do not want to pay.", "replies": [], "depth": 1}, {"id": "fxbg9kb", "text": "Are you a current college student? I can send you some resources that will help you better understand real estate concepts", "replies": [{"id": "fxek1mi", "text": "I am going to be a college student soon! that would be helpful. I'm a complete beginner", "replies": [], "depth": 2}], "depth": 1}, {"id": "fxbppqu", "text": "So the price you would get for leasing commercial property is not necessarily dependent on the price you buy it for but rather what the market bears for that type of space, in that specific area. \n\nYou could have an office building and retail in the same building getting vastly different rents per sqft. You can have office next to a newer office that gets very different rents.\n\nOnce you figure out the rents, commercial rents are generally triple net, meaning they cover their costs outside of the fixed amount of rent for things like property taxes, insurance, maintenance, etc. so if you bought the building in cash and leased it out completely triple net, its pretty easy to see what amount of money you would be making.\n\nNow most people don\u2019t buy real estate cash because in low interest rate environments, you get a better return with bank debt. So then you have to subtract the debt service from that rent you collect?", "replies": [], "depth": 1}, {"id": "fxd7g2q", "text": "The amount you could lease it for has nothing to do with the purchase price. In order to find out how much you could lease it for, look at lease comps in the area for similar properties. It's good to know how to calculate cap rates, but knowing the formula is not going to teach you how much things are renting for in your market. You simply have to find the data.\n\nThe reason why people are suggesting that you learn cap rates is that different markets have different cap rates, and this might help you decide how much you pay to purchase the property. However, the cap rate ultimately depends on the rental comps, so you're back to square one unless you already know what people are paying to rent per square foot.", "replies": [], "depth": 1}]