Has anyone successfully flipped or wholesaled a commercial property?

[Jeffery Bigsby]

I am interested to know if there is anyone out there or know someone who has successfully flipped or wholesaled a commercial property of any kind and what were the steps they had to take in order to complete the transaction for start to finish?

[Bill Gulley]

It all washes out Don!

IMO, too many fall for the guru stuff and think they can go flip a shopping center as easily as they would a mobile home. Absolutely misleading and not so!

Jeffery, forget the "dream team" stuff, IMO. Commercial is a world away from residential. When I speak of commercial I'm talking about strip centers, hotels/motels, C-stores, wharehouse/office, resturants, recreational properties, like a golf course and multi-family.

You need an attorney for some deals, some you don't. As Don mentioned, you need to know an engineer for environmental surveys for some properties, not all. You need a bank that won't run away if you mention the "R" word (resturant). In other words you really need to know alot of professionals to tap into their expertise when needed. You need to know when to call on them, especially during your due diligence.

As to money, the only substitute for money is experience. What I mean is that when push comes to shove, you need cash to look at a wharehouse/office building or be able to get yourself in a position where another buyer relies on your expertise to proved some service that makes the deal possible. I have done deals both ways as a buyer or partner.

The chance of a person with no experience getting into a deal that has a million dollar price tag to it without money is slim and none in reality. If it is a deal, the seller and his "team" (lol) will be sophisticated enough to require say...show me the money. I mean really, should we assume that sellers of a half million dollar propety won't have enough sence to talk to their attorney and if he does, that the lawyer is a fool?
Trying to skin a cat is one thing, trying to skin a tiger is another, IMO.

I personally have had owners of multis come to me and say...help me! That's where my expertise, to whatever extent, can be used instead of my money. Solving problems is the key to getting deals done. A 12 unit apartment building is a slam dunk in the world of commercial, but it still requires skill beyond that of single family properties. And, usually when you use your expertise without money in the deal, your sliver of the deal will be a per centage of the transaction. Maybe 15% on a 200K deal, 5% on 1MM or less! While that's great money, the deal can take a year and in many cases, I could have done 10 residential deals in the time and effort invested in a commercial deal.

What hurts is when someone tries to get into a deal, they spend the time elephant hunting and after a year or so, the deal falls through. I have seen many Realtors spend money banking on a closing and end up in debt.

Not saying that someone might pass away and the little old lady agrees to allow you to do a lease option with a promise as an option price, but spending time looking for her is going to be, IMO, in the end, a waste of valuable time where you could be making money.

A seller will ask to see your ability to perform under a contract, the bigger the deal, the more hard nose they will be.

You need to pay for inspections to perform your due diligence or have a buyer in your pocket that will write a check. Depending on the type of property you are looking at you could have a $2,000 survey, 5,000 environmental survey, 4,500 in a loan committment, 2,000 appraisal and other smaller costs, like having an electrician come in and fix something and having the HVAC inspected, that's what it was on my last commercial transaction, an office/wharehouse in Texas purchased out of a divorce and pre-foreclosure.

Sorry for the rant, but new investors need to start small. Find a 120K block building that could be a good shop for a lawn and tractor repair shop. Find the buyer first and see whtat is needed. Then find the building. Then take an option and flip it to your buyer. That skins the cat, then move up to a bobcat and so on.

Another way is to get with someone like Don, find a mover-shaker type and work for them to learn the ropes.

The real estate industry is like any other, you don't walk in off the street as the Top Dog and expect to knowck off big bucks regardless of what some guru tells you.

OK, sorry for the rant, but really, I wrote all this for the masses thinking they can do a half million c-store building as easily as they can do a residence. It's not the place to start, but where you might end up. Good luck!