Thinking about starting out in Commercial Real Estate
[deleted]
[{"id": "dk1pwou", "text": "I work in commercial real estate analytics. Majority of my clients are brokers who own their properties and lease the space or develop the property for the purpose of selling. It is highly profitable, but you have to start small. Many guys start of residential and they keep flipping the property and purchase larger properties. Your friend gives horrible advice. Always start small.", "replies": [], "depth": 1}, {"id": "dk1so5x", "text": "Nothing stopping you from starting in commercial. The biggest difference in my opinion is that with a house you can find a tenant in a week, but with a commercial property you might need to wait 6 months to 2-3 years to lease up... ", "replies": [], "depth": 1}, {"id": "dk1wszy", "text": "Your friend is an idiot. Don't listen to him. Also don't bank on 1031's. They might be on the way out. \n\nCRE is just like any other commodity you choose to invest in, except that it is much more hands on. In that case you better learn the ins and outs of every property type and have some sort of passion for a specific property type when the going gets tough and you have a 20k monthly debt service payment but it's sitting 25% vacant or 100% vacant (depending on the specific property type you choose) because a tenant or tenants decides not to renew their lease and move away from your property. \n\nWealth plays a very important factor in CRE and that is because with CRE you pretty much have absolute control over your asset. And why are the wealthy wealthy? They like to have control and took it to get to where they are. Start small. Buy some shit hole value add and dump some capital into it, get it filled, feel what it's like to be a landlord. The headaches and chores of dealing with tenants, the tax man, property managers, and beating the snot out of subs who screw you over is not a headache everyone likes or can handle. The stress is real but the rewards can be great if you make it. You may hear of people getting very wealthy off of CRE but for every one that succeeds, dozens lose their ass. Also keep in mind this isn't residential, you'll need at least a 20% downstroke, unless you're good at creative financing or want to bring in a HNW partner. \n\nRead, sit down with a broker or someone you know who owns property and see what they have to say. Also you say retail store fronts are on their way out? I don't think that's the case. I think old big box stores (Dillard's, gander mountains, Best Buy, the ones who already announced downsizing) are shrinking but I think just from reading articles that retail is very much still alive, it's just going through a transition stage most of us haven't seen in our lifetime. CRE is very cyclical. Best of luck ", "replies": [{"id": "dk2kedb", "text": "Great reply, thanks. Will reference this", "replies": [], "depth": 2}], "depth": 1}]