How many Units was your 1st Commercial Deal

Question

Hey BP!

So I listened to the 2 Grant Cardone episodes on the BP podcast (his first one is one of the best podcast episodes I’ve heard), and I’m completely sold. Now I’m looking to go from a 4 Units to a 20 Units.

Just wanted to ask you all, how many units was your first commercial property, and where was it located ?

Did you jump directly to commercial or did you play around in the residential space first ?

Also, I’m looking to put together a team (Property Managers, Brokers, Lenders etc...) in Philly, so please recommend if you have any suggestions.

Nik S. · Answer

@Ley Nezifort

First commercial deal was an apartment building package (50 units). Never even owned a rental home prior. Economy of scale is what attracted me to multi-family.

Now apartment buildings is my only long term holds and attraction....for now that is!

Walk before you run....ahhhh debatable. You have a brain, might as well strengthen it and apply your knowledge where your passion is!

Commercial deals provide much more momentum. Cash flow, forced appreciation and long term equity growth!

Steve K. · Answer

@Ley Nezifort my first (and only) was an 8, purchased after owning and self-managing a few tris and quads first. It’s been a few years and honestly I’m on the fence about going bigger or sticking with 3-4 units moving forward. In my area I can afford smaller buildings in Class A areas, whereas anything over 5-8 I’m limited to C-/D areas. The result is that my smaller buildings have much less churn/turnover (basically zero vacancy), have appreciated a lot faster, and have been much easier/less expensive to manage. So even though the 8 unit has a higher cap rate, the actual overall return over time has been better on the tris and quads (actually my one triplex has been the best of all). If I were to go commercial again I would like to go bigger than 5-8, but I would need to partner. If I were to partner I might want to go true commercial as in shopping mall. I’m always looking for a good buy so I won’t discriminate based on size if a good deal of any size presents itself, but currently more actively looking for 3-4 units as those have been my bread and butter. I also like 30 yr. fixed rate mortgages compared to the inevitable balloon payment that comes with commercial. Maybe I need to listen to the podcast.

Nik S. · Answer

@Ley Nezifort

https://www.biggerpockets.com/...

Bjorn Ahlblad · Answer

@Ley Nezifort I had singles and doubles for many years and closed on a 12 unit two years ago. All in one two story building. Best thing I have done, I still have the duplexes but won't buy any more. Smallest I would look at now is a six unit; and ideally another 12-20 unit but have not found one that makes sense. My wife is the PM.

Jeremy Marek · Answer

Our first was a 6 unit (all 2-1s)

Christopher B. · Answer

I'm most familiar with Ohio and Michigan, so it would probably be in those areas.  I'm open to other areas, but would need to learn more about them, like neighborhoods, schools, population growth, etc.

Bjorn Ahlblad · Answer

West of Olympia Wa. Ideally the next one would be in the same area. Properties have risen in price faster than rents, and buyers are willing to pay based on all the MF hype.

I'm looking for a somewhat distressed property for sale by a LL who has beaten his/her head against the wall too often and just wants out. I'll make them a cash offer faster than they can get a ticket to Hawaii!

Ley Nezifort · Answer

@Christopher B. Which area are you looking to buy in ?

Ley Nezifort · Answer

@Nik S. That’s amazing man! Would you mind going into a bit of details as in location , how you financed it , did you have to get a co-signer to meet the net worth requirements ? How did you fund the down payment ? Would love to hear your story to guide me through my first commercial property journey.

How many Units was your 1st Commercial Deal

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