Atlanta, GA · Member since 2017 · 15 posts · 4 votes
I am graduating next fall with an engineering degree and I plan on working as soon as I graduate. I have been able to save ~$24,000 from my work from the past 6 summers. Some of it is already invested, but I would like to get on track in real estate to start generating monthly income on the side in the range of $4000-$5000. I have been told to get into commercial real estate, so what do I need to do to get a property or multiple properties to get this range of income?
Real Estate Agent · Utica, NY · Member since 2016 · 23 posts · 2 votes
9y
$24,000, or however much you have available outside your other investments, isn't really very much to start with, definitely no where near enough to generate $4-5,000 of profit a month. If by commercial real estate you mean purchasing rental properties, you could probably find a property being sold by the owner, or another investor, and work out a seller financing deal with them where you put 20% down, and make payments each month. You'd really only have enough money to purchase a $50,000-100,000 property, which would eat up your entire $20,000 and you'd probably need more to make any repairs.
You could also use the money you have already to flip a home, using a hard money lender. They usually want you to have skin in the game, so probably 20% down again, but at least with flipping you'll get the money back, plus your profits, within 3-4 months (If everything works out of course).
You could also look into wholesaling, but that's a lot more hands on in the sense you have to really put a lot of time into searching for deals, and networking with people. It might be a bit much for you if you'll be working full time as well.
Overall, for the amount of money you have, and your goal, I'd personally recommend looking into flipping, until you can save up more capital.
$24,000, or however much you have available outside your other investments, isn't really very much to start with, definitely no where near enough to generate $4-5,000 of profit a month. If by commercial real estate you mean purchasing rental properties, you could probably find a property being sold by the owner, or another investor, and work out a seller financing deal with them where you put 20% down, and make payments each month. You'd really only have enough money to purchase a $50,000-100,000 property, which would eat up your entire $20,000 and you'd probably need more to make any repairs.
You could also use the money you have already to flip a home, using a hard money lender. They usually want you to have skin in the game, so probably 20% down again, but at least with flipping you'll get the money back, plus your profits, within 3-4 months (If everything works out of course).
You could also look into wholesaling, but that's a lot more hands on in the sense you have to really put a lot of time into searching for deals, and networking with people. It might be a bit much for you if you'll be working full time as well.
Overall, for the amount of money you have, and your goal, I'd personally recommend looking into flipping, until you can save up more capital.
How much do you think I need to generate $4000-$5000 to start investing in commercial real estate?
Investor · Los Angeles, CA · Member since 2017 · 27 posts · 10 votes
9y
You didn't specify if that's gross or net.
You might be able to hit 50% of your target (that would be $2K gross monthly income) with what you have.
You can target a C- neighborhood and shop for a fourplex property with 2bed/1bath units, bringing in $500 in rents per unit.
Your price target would need to be <= $120K. A 20% down will eat up your savings. Note that you should always have a reserve for "when sh!t hits the fan" fund. Finding a 100% occupied property will certainly help bring in immediate income.
These types of deals are out there, you'll have to do some research to find them.