All Forum Posts by: Amit Chugh

I've been seeing some commercial apartment auctions listed on LoopNet and was wondering if they’re worth pursuing. One thing I’ve learned is that these auctions typically don’t allow independent inspections—inspection reports are provided by the seller/broker. They also require a non-refundable 10% earnest money deposit, with a strict 30-day closing window.

Additionally, most of these auctions have reserve prices, so I'm curious—what’s the real advantage of buying through this type of auction? or is anyone goes in this route? I am exploring multifamily apartment area so will appreicate advise in this?

@Tim Delaney - I was referring that one of the properties is listed as Section 8 Property, why one would list that in title, does it make any different or benefit for buyer or seller mentioning section 8 in title? Below is the link of the property:

https://www.loopnet.com/Listing/927-Dixon-St-Tiptonville-TN/...

@Ken M. - Why you think commercial will head for huge retrenching?

@Tove Fox - 

Residential Real Estate Investing

Pros:

• Lower Entry Costs: Easier to get started with less capital required.
• High Demand: People always need homes, making demand relatively stable.
• Easier Financing: Mortgages are generally easier to secure with favorable terms.
• Simplicity: Easier to understand and manage, especially for beginners.
• Flexibility: You can use it as a personal residence or rent it out.

Cons:

• Tenant Turnover: More frequent turnover leads to vacancy and more management.
• Lower Cash Flow: Income potential can be modest compared to commercial properties.
• Emotional Buyers: Residential prices can be influenced by emotions, leading to price volatility.
• Maintenance Burden: Landlords often deal with repairs and maintenance, which can be time-consuming.

Commercial Real Estate Investing

Pros:

• Higher Income Potential: Stronger cash flow and higher returns are common.
• Long-Term Leases: Tenants often sign longer leases (3-10 years), reducing vacancy risk.
• Professional Tenants: Business tenants tend to take better care of the property.
• Valuation Based on Income: Prices are based on the income the property generates, not market emotions.
• Shared Costs: Tenants often cover property expenses like taxes, insurance, and maintenance (via triple-net leases).

Cons:

• High Entry Costs: Requires more capital or partnerships to get started.
• Complex Management: More expertise is needed; you may need a professional property manager.
• Economic Sensitivity: Commercial properties are more sensitive to economic conditions.
• Challenging Financing: Securing financing can be harder, with stricter terms and higher interest rates.
• Zoning and Legalities: More complex regulations compared to residential properties.

Key Differences:

• Risk: Residential tends to be lower risk, while commercial offers higher rewards but with greater risk.
• Management: Residential is easier for DIY investors, while commercial properties usually require a team.
• Scalability: Commercial properties are easier to scale, offering more potential for significant cash flow increases.

While searching for apartments, i noticed a commercial apartment listed as Section 8 property, does it make any difference from buyer/seller perspective when it's listed as section 8 property. Same property listed water bill paid by landlord so how much does it cost to put individual meters for each property so cost can be moved to tenants?

I am interested to buy commercial multifamily apartments 4+ units and would love to connect with other members of the community who are based on in TN to build a team. I was thinking to explore TN and Georgia. What's the best way to find deals beside LoopNet?

And would appreciate any tips in thoughts in same area.