Rental Property Investor · CA · Member since 2018 · 17 posts · 3 votes
Hi everyone,
Hope you are doing well!
I am a residential real estate investor based in San Francisco. With BP's inspiration and guidance, I have done a few deals by myself and partnerships in the residential market with a buy, improve and operate strategy.
Investing in commercial buildings has always been my long-term plan. However, admittedly I am new to the game. I hope to get some guidance on how to get into it. I don't have a big check myself but I believe with the right deal and approach, I am able to raise the necessary fund. If you are a broker or an investor looking for a partnership, I will be really grateful if you could shoot me a message so we can discuss further.
So it's a lot like the chicken and the egg scenario. You need equity to ink a deal, but you need a deal to secure equity partners, right? Deals are easy to find, but finding the right deal is the trick. Because of this intrinsic variable, investors are easy to find when you have the right deal. You find the right deal by calling your *** off to any and every property owner you can find. Deals can't be found on the internet, truly good deals have to be discovered, so start dialing.
Full time investors know where to find deals, they have established certain channels. So the key is to become one of those channels. Network with brokers, go to meetups, put yourself in front of people. When you talk with them you have to wet their appetite. Tell them "yea, I have a few deals that I'm currently working on that look very promising and I have a few more being sent to me everyday. I have no clue how I'm going to handle all of these, let me get your info and I'll just send them to you." Then send them the deals you find, if you've done your homework and the deal looks good, they will call you.
Thank you Chase. Like most of the beginners, I have spent a lot of time reading the commercial real estate investment and now I feel somewhat scared, somewhat educated and a little excited. I am curious about the best way to start. If say I have to raise some money from equity partners, would you say it's easier if I find the deal first -> find the equity money -> debt financing -> deal purchase process?
I don't know how long I typically have to do the equity raise? Is it like 3 - 6 month?
I'm looking at starter buildings like this. (it's just an example so sorry it's not in DC area, but it is something like this). Again, thank you so much for replying.
welcome to BP if you have any questions just ask or look them up in the forums
Hi Justin,
Thank you for replying. One coincidence is that I have some experience in investing in Texas as "out-of-state". Would you say it's best to start investing in a commercial within a certain driving distance? The benefit is to better control the renovation/operation process to learn all the necessary steps.
I am a residential real estate investor based in San Francisco. With BP's inspiration and guidance, I have done a few deals by myself and partnerships in the residential market with a buy, improve and operate strategy.
Investing in commercial buildings has always been my long-term plan. However, admittedly I am new to the game. I hope to get some guidance on how to get into it. I don't have a big check myself but I believe with the right deal and approach, I am able to raise the necessary fund. If you are a broker or an investor looking for a partnership, I will be really grateful if you could shoot me a message so we can discuss further.
I look forward to hearing from you!
Thank you so much!
Rasing equity (or Syndication) is not the easiest way to get started, but it can be a great investment!
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
7y
Au,
Welcome to BP! When looking to purchase a commercial property, you have to all of the components more or less at the same time. In other words, while looking for an investment, you have to start talking to lenders, investors, attorneys, etc... RE is a team sport. So the sooner you build your team the better off you'll be when the right opportunity comes your way.
Thank you Chase. Like most of the beginners, I have spent a lot of time reading the commercial real estate investment and now I feel somewhat scared, somewhat educated and a little excited. I am curious about the best way to start. If say I have to raise some money from equity partners, would you say it's easier if I find the deal first -> find the equity money -> debt financing -> deal purchase process?
I don't know how long I typically have to do the equity raise? Is it like 3 - 6 month?
I'm looking at starter buildings like this. (it's just an example so sorry it's not in DC area, but it is something like this). Again, thank you so much for replying.
Rental Property Investor · Miami, FL · Member since 2015 · 179 posts · 292 votes
7y
Au,
Welcome to BP's Multifamily Investing forum, I'm sure that you'll find it very easy to get many of your questions answered by all the rockstar investors that hang out around here.
Since I see that you have already received great advice I'll just leave my two cents based on my experience, and with little info about your specific plans:
- After you feel comfortable enough (you'll never feel 100% comfortable and that's actually great) to pull the trigger having educated yourself extensively in commercial real estate(books, podcasts, meetups), focus on building relationships/partnerships with people that are doing exactly what you want to do and doing it at the highest level.
- Understand that in order to raise private funds from investors for your deals and doing it long term, you will have to attract the money rather than hunt for it. In my experience the best way to achieve that is to put yourself out there and start educating and providing value through a thought leadership platform.
I'm happy to try to answer any specific questions you may have.
So it's a lot like the chicken and the egg scenario. You need equity to ink a deal, but you need a deal to secure equity partners, right? Deals are easy to find, but finding the right deal is the trick. Because of this intrinsic variable, investors are easy to find when you have the right deal. You find the right deal by calling your *** off to any and every property owner you can find. Deals can't be found on the internet, truly good deals have to be discovered, so start dialing.
Full time investors know where to find deals, they have established certain channels. So the key is to become one of those channels. Network with brokers, go to meetups, put yourself in front of people. When you talk with them you have to wet their appetite. Tell them "yea, I have a few deals that I'm currently working on that look very promising and I have a few more being sent to me everyday. I have no clue how I'm going to handle all of these, let me get your info and I'll just send them to you." Then send them the deals you find, if you've done your homework and the deal looks good, they will call you.
Rental Property Investor · Johnson City TN · Member since 2016 · 386 posts · 271 votes
7y
@Au Jia - Try to get 10 soft commitments from potential partners equal to 130% of the capital you expect to need. You may want to create a sample investment package reflecting your business model and returns objectives. When the deal comes you'll have most if not all of the funds in place, and you'll sleep better too.
Rental Property Investor · Tampa, FL · Member since 2015 · 1k+ posts · 969 votes
7y
Step 1) Build your team (management, lender, attorney), and begin to generate verbal interest from investors.
Step 2) Work with brokers to find deals
Step 3) Underwriting and submit offers
Step 4) Once deal is under contract, you'll have 60 to 90 days (depending on the PSA) to secure debt, secure equity, work with attorneys to create partnership documents, and perform due diligence.
Hello To Au Jia and to the bp community! I I as well want to know more info on commercial real estate. One software I use to find commercial investors are public records to find the owner of an l strip. then I use Lexus nexus a very powerful software to find a phone number for that investor. then i contact them to find out if they are still in the market to buy more commercial investing, and boom i just made a partner. no brokers no middle man just straight one to one. Thanks let me know if this post helps anyone
Rental Property Investor · Baltimore, MD · Member since 2016 · 253 posts · 178 votes
7y
Hey - I would focus on getting educated in the CRE space. It is very different from residential because it encompassed many other factors such and data and financial modelling. I would focus on that before diving into that play.
Cary, NC · Member since 2011 · 34 posts · 16 votes
7y
Hi Au, I've managed residential and commercial investment properties. They're different in almost every aspect (investment fundamentals, leasing, marketing, daily operations, etc.). That's why you don't see a lot of people working in both asset classes. I would find an experienced partner to do your first commercial deal. The acquisition, leasing and accounting are slightly more complicated than a residential deal. But just like everything else, approach it as if it's just another thing you haven't figured out yet. And then you'll get comfortable in the space. First thing I would do is talk to a commercial real estate broker in your area. They're the people connectors who can help you get your momentum going. Good luck! -Matt