After over 30 Residential purchases I am moving to Commercial
Realtor · Guyton, GA · Member since 2018 · 65 posts · 49 votes
After over 30 Residential purchases I am moving to Commercial
Most Popular Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votesCommercial is a wide range of products. Bowling alley, parking lot, Medical offices, Self storage, warehouses, MFH (move up in doors), Subdivisions, etc.
A. Since your just starting, recommend you start from your Strengths. Reading your profile. Deacon, Father of 3 girls, Longshoreman, SFH. You already understand all four of these fields, thus you have credibility in those areas. Commercial is a lot about credibility.
B. Just like you did for SFH start doing deal analysis. Go to Loopnet or Crexi and start picking different types of property and doing deal analysis.
C. Deacon background- look at new or old church properties, or campgrounds.
D. Father- dentists, orthodontists, dancing, taekwondo, tumbling, softball, etc. Office or retail complexes.
E. Longshoreman- trucking, truck washing, truck parking, offloading/staging, railcar, etc. Loopnet, 00 80 Hwy Garden City, GA. What would a Longshoreman see in this property? Plus they are Nasty, I hate Triangles and so does everyone else. Figure out how to make them work. Truck or container storage. Property looks low or wet, dig out the corners for ponds and use the fill to make rectangular property.
F. SFH or MFH- subdivisions, see my post on Journeys End or Silver Lake. Don't do the houses, do the lots. Take a junk piece of ground and make it beautiful. LoopNet 00 Staley Ave, Savannah, GA. 5.5 acres $550,000 pre-approved for 17 SFH. We are charging $100,000 to $130,000 for 2 acres in the middle of the countryside. How much would 17 lots in Savannah go for? What is your development cost? Or get rezoned so you can do Boat and RV storage. Its next to a vehicle storage area already. Lay some engineering fabric down and some oyster shell if they allow and you're in business.
Always look for nasty properties and figure out to add value. Everyone else is looking for good properties they can visualize.
23 Replies
- 3yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
I only do SFH myself so far, but congratulations on your success and growth! Do you go to REIA meetings? If I were doing this deal, that's where I'd look for someone to go over it with.
Related topic... I hear you on the challenges of SFH. Everything is a pain - finding deals, rehab, utility transfers, etc. BUT, I think a lot of investors "graduate" from SFH because it's such a good learning experience. That's my plan... I'd love to get to 26 (working on #6 now.)
So... any lessons or advice you'd share from assembling your portfolio?
- Real Estate Consultant · Rancho Mission Viejo, CA · Member since 2018 · 41 posts · 36 votes3y
I buy industrial. I'm on a team that owns and operates with investor funds.
Earlier this year, I helped a syndication group buy a 6 building portfolio in Atlanta, Columbia, Macon, and Augusta.
@Joshua Austin - Happy to get on zoom
- Realtor · Guyton, GA · Member since 2018 · 65 posts · 49 votes3y
@Nicholas L. Thanks for the encouragement! My advice for scaling is to ALWAYS BE NETWORKING for finding deals and funding them. You also need to get involved in an active income path that can drastically get your income up. For me it was getting my real estate license and doubling my income through sales.
A few things I live by regarding deal analysis:
Always remember “no deal” is better than a bad deal.
Filter every deal with three questions (this comes from Kieth Cunningham’s book “The Road Less Stupid:”
1. What’s the upside?
2. What’s the downside?
3. Can I live with the downside?
Always glad to share my journey and experience. Feel free to DM me.
- Realtor · Guyton, GA · Member since 2018 · 65 posts · 49 votes3y
@Cody J Leivas that would be great. I’m DM you.
- 3yHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
Commercial is a wide range of products. Bowling alley, parking lot, Medical offices, Self storage, warehouses, MFH (move up in doors), Subdivisions, etc.
A. Since your just starting, recommend you start from your Strengths. Reading your profile. Deacon, Father of 3 girls, Longshoreman, SFH. You already understand all four of these fields, thus you have credibility in those areas. Commercial is a lot about credibility.
B. Just like you did for SFH start doing deal analysis. Go to Loopnet or Crexi and start picking different types of property and doing deal analysis.
C. Deacon background- look at new or old church properties, or campgrounds.
D. Father- dentists, orthodontists, dancing, taekwondo, tumbling, softball, etc. Office or retail complexes.
E. Longshoreman- trucking, truck washing, truck parking, offloading/staging, railcar, etc. Loopnet, 00 80 Hwy Garden City, GA. What would a Longshoreman see in this property? Plus they are Nasty, I hate Triangles and so does everyone else. Figure out how to make them work. Truck or container storage. Property looks low or wet, dig out the corners for ponds and use the fill to make rectangular property.
F. SFH or MFH- subdivisions, see my post on Journeys End or Silver Lake. Don't do the houses, do the lots. Take a junk piece of ground and make it beautiful. LoopNet 00 Staley Ave, Savannah, GA. 5.5 acres $550,000 pre-approved for 17 SFH. We are charging $100,000 to $130,000 for 2 acres in the middle of the countryside. How much would 17 lots in Savannah go for? What is your development cost? Or get rezoned so you can do Boat and RV storage. Its next to a vehicle storage area already. Lay some engineering fabric down and some oyster shell if they allow and you're in business.
Always look for nasty properties and figure out to add value. Everyone else is looking for good properties they can visualize.
- Investor · Atlanta, GA · Member since 2017 · 174 posts · 104 votes3y
Happy to share what I know about the Light Industrial asset class in Southeast. I have closed on 10 flex spaces (500K SF | $51M) in the last 19 months.
- 3yRonald RohdePro MemberAttorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
We buy industrial. My partners and I have over 100,000 sq ft on NNN industrial in DFW.
Glad you got a nice little deal, the potential is unlimited now. Buying vacant and lease up is great margins, but harder to replicate finding those tenants.
We've pivoted to industrial outdoor storage, mostly truck parking while we look for a single tenant user.
- Realtor · Guyton, GA · Member since 2018 · 65 posts · 49 votes3y
Quote from @Henry Clark:
Commercial is a wide range of products. Bowling alley, parking lot, Medical offices, Self storage, warehouses, MFH (move up in doors), Subdivisions, etc.
A. Since your just starting, recommend you start from your Strengths. Reading your profile. Deacon, Father of 3 girls, Longshoreman, SFH. You already understand all four of these fields, thus you have credibility in those areas. Commercial is a lot about credibility.
B. Just like you did for SFH start doing deal analysis. Go to Loopnet or Crexi and start picking different types of property and doing deal analysis.
C. Deacon background- look at new or old church properties, or campgrounds.
D. Father- dentists, orthodontists, dancing, taekwondo, tumbling, softball, etc. Office or retail complexes.
E. Longshoreman- trucking, truck washing, truck parking, offloading/staging, railcar, etc. Loopnet, 00 80 Hwy Garden City, GA. What would a Longshoreman see in this property? Plus they are Nasty, I hate Triangles and so does everyone else. Figure out how to make them work. Truck or container storage. Property looks low or wet, dig out the corners for ponds and use the fill to make rectangular property.
F. SFH or MFH- subdivisions, see my post on Journeys End or Silver Lake. Don't do the houses, do the lots. Take a junk piece of ground and make it beautiful. LoopNet 00 Staley Ave, Savannah, GA. 5.5 acres $550,000 pre-approved for 17 SFH. We are charging $100,000 to $130,000 for 2 acres in the middle of the countryside. How much would 17 lots in Savannah go for? What is your development cost? Or get rezoned so you can do Boat and RV storage. Its next to a vehicle storage area already. Lay some engineering fabric down and some oyster shell if they allow and you're in business.
Always look for nasty properties and figure out to add value. Everyone else is looking for good properties they can visualize.
Lots of golden advice there brother. Thanks for sharing and taking the time to respond! The commercial property I close next week is definately based on my experience in trucking and freight as a longshoreman the tenant came from my relationship at church. Solid advice.
- Member since 2020 · 76 posts · 61 votes3y
- Realtor · Guyton, GA · Member since 2018 · 65 posts · 49 votes3yIt’s 10 years with a 3% increase annually.
Quote from @Derek Bell:
- Realtor · Guyton, GA · Member since 2018 · 65 posts · 49 votes3yFor the last few years I have built a relationship with a community bank. I use their construction loan program on all of my BRRRR deals. It’s 20% down and then they loan me up to 80% of ARV for renovations. I am doing that on this one except it’s a 10 year balloon with a 25 year AM.
Quote from @Joe S.:
What kind of financing did you arrange?
The downside is this big of a deal
is unique for them and the appraisal was kind of shotty. The appraiser valued this at a 10 CAP AND didn’t account for our NNN terms so he lowered our NOI by $30k accounting for expenses we won’t have. Even after that the value came in at $1.6m. Almost enough to complete most of our buildout costs.
That being said, our plan is to refinance in 12-18 months to hopefully BRRRR this baby and pay off our HELOCs we are using to fund the downpayment and overage on build to suit costs.
If anyone knows of a great lender in this space please let me know. - Member since 2020 · 76 posts · 61 votes3y
How did you secure a nnn tenant for 10 years at $21/sf? If this is your first move into commercial, you did good. I have been in this space for 5 years and am currently building a 20k sf warehouse for single tenant. I should be done around Q3 2023. It’s a spec build and have it marketed for $14/sf nnn or buy at 5.5. I would love to find out how you secured a $21/sf nnn tenant for 10 years. Well done.
- Realtor · Guyton, GA · Member since 2018 · 65 posts · 49 votes3yNot sure if this matters in your figures but it’s 3000-3500 sqft of office space, 6500-7000 sqft is warehouse space (all conditioned) and there is also 5 acres of property for parking flat bed trucks, and freight. The property backs up to a major interstate and is 25 minutes from the Savannah Port so maybe those factors are adding to the higher price per sqft?
Quote from @Derek Bell:
How did you secure a nnn tenant for 10 years at $21/sf? If this is your first move into commercial, you did good. I have been in this space for 5 years and am currently building a 20k sf warehouse for single tenant. I should be done around Q3 2023. It’s a spec build and have it marketed for $14/sf nnn or buy at 5.5. I would love to find out how you secured a $21/sf nnn tenant for 10 years. Well done.
- Realtor · Guyton, GA · Member since 2018 · 65 posts · 49 votes3yLet’s hop in a zoom next week. I’d love to hear your story and chat about the deal. There is a huge part of this where ai am flying with a healthy amount of ignorance that probably kept me from be scared to do the deal and negotiate it. For example, I have no idea what is normal per sqft in this space. I just put together a deal based on the market place around me And what made sense to me based on acquisition and construction costs.
Quote from @Derek Bell:
How did you secure a nnn tenant for 10 years at $21/sf? If this is your first move into commercial, you did good. I have been in this space for 5 years and am currently building a 20k sf warehouse for single tenant. I should be done around Q3 2023. It’s a spec build and have it marketed for $14/sf nnn or buy at 5.5. I would love to find out how you secured a $21/sf nnn tenant for 10 years. Well done.
- 3yDavid PierceBusiness MemberProperty Manager · Deland, FL · Member since 2019 · 74 posts · 28 votesSounds like a great deal. Congrats.
PMI Central Florida4.468 Reviews - Member since 2020 · 76 posts · 61 votes3y
The extra 5 acres of land lease is for sure helpful in getting that rate. I didn’t catch that at first.
either way, that’s a great deal. Sure, pm me anytime to set up a zoom. - Real Estate Agent · Plano, TX · Member since 2015 · 734 posts · 511 votes3y
@Joshua Austin We buy/invest/broker industrial NNN as well.
Happy to jump on a zoom call to share ideas and strategies.
Quote from @Joshua Austin:
Quote from @Henry Clark:
Commercial is a wide range of products. Bowling alley, parking lot, Medical offices, Self storage, warehouses, MFH (move up in doors), Subdivisions, etc.
A. Since your just starting, recommend you start from your Strengths. Reading your profile. Deacon, Father of 3 girls, Longshoreman, SFH. You already understand all four of these fields, thus you have credibility in those areas. Commercial is a lot about credibility.
B. Just like you did for SFH start doing deal analysis. Go to Loopnet or Crexi and start picking different types of property and doing deal analysis.
C. Deacon background- look at new or old church properties, or campgrounds.
D. Father- dentists, orthodontists, dancing, taekwondo, tumbling, softball, etc. Office or retail complexes.
E. Longshoreman- trucking, truck washing, truck parking, offloading/staging, railcar, etc. Loopnet, 00 80 Hwy Garden City, GA. What would a Longshoreman see in this property? Plus they are Nasty, I hate Triangles and so does everyone else. Figure out how to make them work. Truck or container storage. Property looks low or wet, dig out the corners for ponds and use the fill to make rectangular property.
F. SFH or MFH- subdivisions, see my post on Journeys End or Silver Lake. Don't do the houses, do the lots. Take a junk piece of ground and make it beautiful. LoopNet 00 Staley Ave, Savannah, GA. 5.5 acres $550,000 pre-approved for 17 SFH. We are charging $100,000 to $130,000 for 2 acres in the middle of the countryside. How much would 17 lots in Savannah go for? What is your development cost? Or get rezoned so you can do Boat and RV storage. Its next to a vehicle storage area already. Lay some engineering fabric down and some oyster shell if they allow and you're in business.
Always look for nasty properties and figure out to add value. Everyone else is looking for good properties they can visualize.
Lots of golden advice there brother. Thanks for sharing and taking the time to respond! The commercial property I close next week is definately based on my experience in trucking and freight as a longshoreman the tenant came from my relationship at church. Solid advice.
@Joshua Austin - I always enjoy reading comments from @Henry Clark. Always gives great advice!
- Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes3y
Sounds like a great deal! The industrial space is my current favorite asset class. I think industrial will have the most opportunity over the next few years. We've been buying industrial in the Midwest for the past two years. Happy to provide more insight, just shoot me a dm.
- Real Estate Agent · Atlanta, GA · Member since 2014 · 683 posts · 317 votes3y
Quote from @Henry Clark:
Commercial is a wide range of products. Bowling alley, parking lot, Medical offices, Self storage, warehouses, MFH (move up in doors), Subdivisions, etc.
A. Since your just starting, recommend you start from your Strengths. Reading your profile. Deacon, Father of 3 girls, Longshoreman, SFH. You already understand all four of these fields, thus you have credibility in those areas. Commercial is a lot about credibility.
B. Just like you did for SFH start doing deal analysis. Go to Loopnet or Crexi and start picking different types of property and doing deal analysis.
C. Deacon background- look at new or old church properties, or campgrounds.
D. Father- dentists, orthodontists, dancing, taekwondo, tumbling, softball, etc. Office or retail complexes.
E. Longshoreman- trucking, truck washing, truck parking, offloading/staging, railcar, etc. Loopnet, 00 80 Hwy Garden City, GA. What would a Longshoreman see in this property? Plus they are Nasty, I hate Triangles and so does everyone else. Figure out how to make them work. Truck or container storage. Property looks low or wet, dig out the corners for ponds and use the fill to make rectangular property.
F. SFH or MFH- subdivisions, see my post on Journeys End or Silver Lake. Don't do the houses, do the lots. Take a junk piece of ground and make it beautiful. LoopNet 00 Staley Ave, Savannah, GA. 5.5 acres $550,000 pre-approved for 17 SFH. We are charging $100,000 to $130,000 for 2 acres in the middle of the countryside. How much would 17 lots in Savannah go for? What is your development cost? Or get rezoned so you can do Boat and RV storage. Its next to a vehicle storage area already. Lay some engineering fabric down and some oyster shell if they allow and you're in business.
Always look for nasty properties and figure out to add value. Everyone else is looking for good properties they can visualize.
These are amazing advise! Thanks for sharing!
- 3yRonald RohdePro MemberAttorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
Quote from @Brock Mogensen:
Sounds like a great deal! The industrial space is my current favorite asset class. I think industrial will have the most opportunity over the next few years. We've been buying industrial in the Midwest for the past two years. Happy to provide more insight, just shoot me a dm.
what type of industrial are you buying?
- Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes3y
Quote from @Ronald Rohde:
Quote from @Brock Mogensen:
Sounds like a great deal! The industrial space is my current favorite asset class. I think industrial will have the most opportunity over the next few years. We've been buying industrial in the Midwest for the past two years. Happy to provide more insight, just shoot me a dm.
what type of industrial are you buying?
Value add in the greater Milwaukee area. Specifically, sale leaseback deals
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