I own a few residential real estate properties (10 properties) with total 19 tenants with total rents about $23000/month with $6000 cash flow/month. Some properties are paid off. My wife and I both have decent fulltime W2 jobs. Planning to get into commercial real estate (values ranging from ($300000 up to $650000). I have 30% down payment available.
Please share any thoughts about your experiences in commercial real estate buying, and monthly cash flows, risks etc.
Any responses will be appreciated. Thanks.
Hi Atul! That's a loaded questions because commercial can mean so many things. Warehouses/industrial versus retail versus office buildings each come entirely with their own set of benefits and issues. Even within those categories, multi-tenant versus single tenant is a pretty different playing field. Your values being on the lower end for commercial, I imagine you are looking for small office buildings more so than any retail, though I'm not sure what pricing is like in your part of the US. Can you provide a little bit more info on your intentions?
I am looking for either of these categories mentioned by you except multifamily (just bought a six flat) and own a combo of condos, SFHs, two flats, three flat, etc already. Since all things residential have gone up a lot, it is tough to make financial sense (cash flow) to buy them. I am looking for small retail mall, small office building, small warehouse within my limits of $650000 price to get better cash flow as well as for diversification.
Any recommendation for a commercial real estate agent preferably near Oak Park or in Chicago? The RE agent I work with is residential with no commercial experience. She had a hard time coordinating the sale for a 6 Flat.
A friend of mine is a Commercial realtor in the Chicago area.
Andrew Prunty, InSite Commercial Realty,
Please PM me and I can possibly help you. You might want to find some nice smaller mixed use properties. One of the few places that you can still find value right now is in properties that are too complex for portions of the market. Commercial guys often don't want to deal with residential and residential guys are afraid of commercial. A building with a couple of apartments and a nice commercial storefront is often a bit cheaper since the pure residential and pure commercial guys are both not going to touch it and it's too small for the institutional investors to pursue it.