Large multi family units

Starting Out 5 Replies

Hey everyone.  How would you recommend a newbie investor approach delving into the commercial real estate world?  I would like to start out with buildings that have 15+ units.  I haven't owned any property yet, and all my knowledge so far has come from reading and Biggerpockets.  I know it will be exponentially harder to start out in this niche, but this is where my true passion lies.

@William Plymouth In my opinion, Absolutely if thats where your passion lies! However just make sure you analyze many deals and understand the numbers that go in there before diving in. Also since this is your first time have some one knowledgeable cross check your analysis.

I would be cautious, but still do it.

Make sure you have all the resources available, not just money, but the human resources as well. 

Good Luck !!!

@William Plymouth So, maybe the obvious question, what do you have to put down and how do you plan on qualifying for a commercial loan? I'm all for passion but it has to map to the real world. If it takes you 10 years to save up 25% down are you okay with that? What will you do with the money in the meantime?

Taking the pragmatism out of it, I am curious as to where the 15 number came from. My average units per property isn't too far off from that but I know I sit in the weird no-mans-land of commercial multifamily. Institutional money typically doesn't touch it but it's out of reach for most individual investors. So how did you arrive at the goal, focus, passion?

@Ozzy Sirimsi thank you!

@Andrew Johnson I have some money saved but not enough to put down just yet.  I'm not in much of a rush, but my goal is to buy my first commercial property by August next year.  My money in the mean time is being invested in long term dividend stocks (I will own my first shares the 6th of next month and put each dividend back into the stock).  Honestly when it came down to purchasing the property, I would be looking for seller financing.  

The number 15 actually came from the readings I've been doing.  The number itself wasn't mentioned, but that is the number that I arrived at.  That "weird no man's land" is where I would like to start out.  Like you said, most investors can't reach it.  Also, those numbers are to small for the "big investors" who buy up commercial property.