Commercial Real Estate Investing

[Oleg Sergienko]

Good afternoon Real Estate Experts 

I am planning to start commercial real estate investing later this year with the following plan: 

Looking to get 10-20-30-40 unit commercial multifamily with 20% down and preferred lender (the downpayment funds will be combined within 2-3 investor either to syndication or real estate fund, not yet decide it). The initial plan to get a building with outdated market rents, but 90-95% occupancy and light cashflow. Then within 6-18 months make a full rehab and updates with a preferred contractor, get better leases and refi. 

Initial budget $250-600k +- 

Please advice if it's seems like an ok plan in your opinion (preferably if you have personal experience). 

Do you think it's a good money investment considering current crushing market and if you consider this as a safe investment. 

My experience: 6 years of real estate brokerage in South Florida, + One successful flip with a $300k revenue. 

Thank you for your time! 

[AJ Exner]

The large scale BRRR can be tricky, but having a JV from the start will help.

My clients down in GA are doing well with a BRRR centered strategy, but focused on one, or both of these things to cash flow quickly:
1) 2-4 unit properties

2) Section 8

In most lending circles, your 2-4 units are going to be classified in the same category as a SFH, so to rehab a hand full of those, you don't take the same kind of rate hit as the 5+ unit properties, but you also don't have the same kind of "experience" issues as you do with larger developments. You will also have more lenient DSCR requirements and it will be easier to cash flow quicker.

And with Sec8, you see usually higher and stabilized rents than you might otherwise. With a good PM who can over see those things, it has the potential to stabilize a bit more then you would otherwise.

I hope that helps, happy to jump on a call and discuss if that helps.