Moving from Residential to Commercial RE (NE Florida)

[Vicki X.]

Hey everyone, I've spent the last few years investing in and managing residential properties. I'm ready to make the leap into commercial real estate, but I'm looking for the best entry point. What paths do you recommend for someone making this transition? I'd love to hear your advice and any "lessons learned" or warnings you have!

[Joel Owens]

It varies based on what you are trying to do an age in life.

I have clients from 7 to 9 figures that are individuals and I am high net worth myself. Most investors once they hit millions to tens of millions or higher in net worth they start switching to more passive investments like NNN what I have been doing for 22 years so far.

If you are younger and still scaling wealth and want to grind for headaches then more value add commercial that takes up a bunch of your time might be the answer.

My investors tend to make 500k and up into the millions per year already off of their jobs, businesses, investments so making the most money number 3 or 4 on the list instead of number 1. Number 1 typically is to have investment passive 2. To have big tax depreciation so they give as little money tot he government as possible 3. Stability to the cash flow with long term lease 4. The actual returns of the cash flow starting out and projected over the hold period.

If you are buying smaller properties in commercial like 1 or 2 million try to stick to more areas you live in and know because usually will be more mom and pop tenants in nature and not investment grade tenants in strong areas.

Good luck