When I was 35 I set my first real estate goal: to own a multi-unit commercial building by the time I was 40. I'm an accountant, so I knew that I would have at least one tenant. I also had some particular areas of town (Brunswick, ME) where I wanted to be located.
Having a goal motivated me, but I didn't quite go about it the right way (read: I didn't find BP until recently). I knew about real estate from both a practical standpoint (I worked for my dad who is a builder when I was younger) and from a theoretical standpoint having worked with many investor clients.
But I didn't work with a realtor, find a mentor, and work on my goal regularly and as I result, I failed to meet my goal. But it wasn't a total fail. I was 40 years and 7 months in August of 2016 when we closed on this building:
The price was right, the location is great, and it had a lot going for it including:
1) The prior owner had put very high end furnaces in fairly recently.
2) The siding, windows, and doors were all 5 years old.
3) Handicap accessibility to the two largest offices.
4) Parking for 20 in a town that has very little parking.
There were some issues to resolve, however:
1) The roof in the picture is the new roof that we had put on.
2) The building was vacant. Zero tenants.
3) Two offices needed a complete remodel (thanks, dad!)
4) A bathroom needed to be reconfigured so that two offices could share the one bathroom.
Within 2 months of purchase, I had moved in and had the second largest office leased out on a 5-year lease. Shortly after that I leased out 6 parking spaces to a neighboring business and found a tenant for the small office in the front right.
I am now at full occupancy and am loving real estate ownership. With the help of BP and this great community, I have a new goal:
$2,000,000 of real estate with a cap rate of 10% by the time I turn 50. Hold me to it!
Congratulations Bob on purchasing your first multi-unit commercial.
I am similar to you. I am about to turn 32, am a CPA, and would like to own my first multi-unit commercial building when I am 35 (when my firm's lease ends).
Glad you were able to make it happen. Any tips on how you made it work?
Thanks @Brian Schmelzlen ! My process was slow and included making an offer on an off-market property. The keys for me were probably:
1) Make sure my accounting practice was in good financial shape with consistent growth. I count on it to pay a healthy lease payment every month.
2) Location. While this isn't crucial for my accounting practice, I knew that I could find tenants more easily (or they could find me more easily) if the location was good. Note that I wasn't looking for a "great" location. A "good" location is what I could afford.
3) I walked the entire area that I was interested in. This gave me a much better feel for the area than merely driving around.
4) Save up 20% for a down payment.
5) Be patient.
You could also consider working with a realtor to find a good property. I didn't do that with this one, but am working with one now to find a multi-family.
My long term plan is to grow my accounting practice so that it takes over the upstairs office as well. That's a win-win because the upstairs office is harder to lease out and an accounting practice that large will provide a fantastic income with which to purchase more real estate!
Time to make it happen!
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