Seminole, TX · Member since 2020 · 13 posts · 3 votes
So I’m a new investor and have $60,000 or so in cash and was planning on doing some single family homes to start off with but now I’ve given it some thought and would single family homes be better or get start into commercial buildings such as strip malls and such?
Accountant · Brunswick, ME · Member since 2017 · 352 posts · 242 votes
5y
@Samuel Bergen, congratulations on getting ready to invest, saving up a pile of cash, and looking for insight. Here are a few thoughts:
1) The answer will vary widely depending on your market.
2) Strip malls are getting hit hard in parts of the country due to the response to Covid. With a new administration, we may be looking at further lockdowns which may adversely impact tenants.
3) I own an office building and residential units. People always need a bed, they don't always need an office.
4) What about a small apartment complex? There are some economies of scale with an apartment complex that make them better than a group of SFHs.
Accountant · Brunswick, ME · Member since 2017 · 352 posts · 242 votes
5y
@Samuel Bergen, congratulations on getting ready to invest, saving up a pile of cash, and looking for insight. Here are a few thoughts:
1) The answer will vary widely depending on your market.
2) Strip malls are getting hit hard in parts of the country due to the response to Covid. With a new administration, we may be looking at further lockdowns which may adversely impact tenants.
3) I own an office building and residential units. People always need a bed, they don't always need an office.
4) What about a small apartment complex? There are some economies of scale with an apartment complex that make them better than a group of SFHs.
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
5y
I guess I'd look at it in terms of deals you can get. < 4-lexes seem pretty extravagantly priced by residential brokers and think you could get a better deal from a commercial guy, However, learn your local market - Things are different in different places.
So I’m a new investor and have $60,000 or so in cash and was planning on doing some single family homes to start off with but now I’ve given it some thought and would single family homes be better or get start into commercial buildings such as strip malls and such?
This all depends on your background, experience, knowledge of the business and the market your in. Commercial is a big learning curve and very tricky right now. The housing market is red hot so much easier to start there but again market is a factor. Either way you need to educate yourself and learn your market first then the business model you choose.
Seminole, TX · Member since 2020 · 13 posts · 3 votes
5y
@Bob Langworthy thanks a bunch for the advice, hadn’t really thought about COVID hitting the strip malls because I live in a little town where we haven’t really been affected but where I’d be investing has been effected. Also we’re really reliant on the oil field here and so with what’s happened with the election could possibly hurt our local economy.
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
5y
I'd start with one SFR, put $40k down and just learn for a year. Plan to break even or lose a small amount. You're trying to learn and break even, not hit a home run. Close on a property, work with a lender, sign a tenant, fix things, collect rent, pay taxes. Do all this first.