Education in Commercial Real Estate

9 Replies

Hello BP! 

I have stumbled upon some commercial real estates deals in my area and want to  have a better grasp of the fundamentals prior to approaching a broker or private owner. I am seeking out advice on areas where i can find educational material (books, videos, audio)  to better grasp commercial real estate over all and specifically retail, office and multi-family.

Thoughts?

Stephen E. Start with figuring out which of the categories you want. Do you want to deal with car counts? NNN leases? Good ol’ apartment buildings? Each has their own little area and I’d say it’s really tough for anyone to absorb all of it at once and be really competent in all of them.

Once you figure that out, the next step is financing. Search here for threads on commercial financing. The loan terms are different. The qualifications are different. And I’d posit that your local good brokers won’t give you much attention if you haven’t even approached a lender.

@Stephen E. I agree with @Andrew Johnson comment. 

Since there is a plethora of RE information, you will need to focus on a niche. If you don't you will be inundated with information, most of which will not be applicable for you. 

I would suggest brushing up on the financial, operational and due diligence aspects before even considering investing. 

Best material: podcasts, books and connecting with your local RE investors (REIAs, meetups). 

@Stephen E. The link in my signature has a TON of information on multifamily and multifamily syndication. There is some content on everything, but a lot of content covering multifamily. Let me know if I can help at all!

@Andrew Johnson @Omar Khan .  

I agree that focus on a niche is especially important and can help you sort through the information quickly and maintain relevancy.  My main focus is apartment complexes between 10-60 units.  

Could you direct me towards resources where i could brush up on financial, operational, and due diligence? I am looking for those fundamentals that would help me long term.

@Grant Rothenburger

I will look your information up.  Thank you for the link.

@Stephen E. My personal opinion would be that you're probably going backwards.  The first thing I'd do is look at what geographic market(s) you think are going to be the best for you.  The second thing I'd ask myself is if I want to target $400/month units or $800/month units (just using this as a proxy for Class B vs. Class C vs. Class D).  They're different worlds.  And once you figure that out you can marry it with your financing scenarios.  If you have $300K sitting around you can probably look at properties for $1MM.  Plan on $250K for the downpayment and $50K for reserves (just to make up some numbers).  Based on geography and class of property you'll figure out in about 5 minutes if you're ideal property (or affordable property) is likely to be 5 units, 10 units, or 50 units.    

All of that work on the due diligence side of things will sink it a lot quicker if you're looking at it in relation to viable targets.  If you don't, you'll end up like a lot of folks on here who have questions on a 20-unit apartment deal that they can't afford.  Then you end up going down rabbit holes of partnership and syndication which can be a huge distraction to learning the diligence piece.

Anyway, I'm just rambling now but those are two 2-3 cents for the day...

@Andrew Johnson

I have heard that you should look at the geographic area before investing heavily into the area. I agree and I am at the beginning of the Journey and want to find way to have solid fundamental to reduce the number of mistakes and increase progressive success.

Would you suggest being an intern for a CCIM or other real estate professional to gain experience and knowledge for commercial?  

I would suggest taking the CCIM courses.  I recommend the online instructor led courses.  Then you could intern for a top commercial broker in your area to gain the transactional expertise.

The CCIM courses will give you all the analysis knowledge you seek.  All the instructors are required to be active in commercial real estate in some way which assures you are learning modern day practices.  Also as part of the courses you will be given analysis spreadsheets you will use in everyday deal decisions.

Yes. They do offer courses at different locations throughout the year if that’s your preferable method.

You will go through four courses and a prerequisite course on negotiating. Then turn in your portfolio for approval in order to take the final exam before being pinned.

It is quite a substantial commitment , both financially and time wise, but I’ve found it worthwhile so far.

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