All Forum Posts by: Chris Field

My rentals lease me a new $50k-$60k truck every 2-3 years. 

I drove junks for years now the payment doesn’t move the scale much. 

The sky is the limit it depends on what your area would support, what zoning will allow and lastly your experience and financial abilities.

So since your the neighbor what does your local knowledge, research and experience with the area tell you?

Start small in the area where you want to go. Turning around a few 2-4 family's would be a good start if you want to do larger ones. 

Commercial real estate is huge it's like saying you want to be in computers or law. Ok great which aspect? What area? What niche? 

I do aggressive land speculation in affordable housing. I operate in a nich of a nich in the commercial world. I'm looking to get into construction of senior housing next. What I do is vastly different than say someone who buys strip malls, or office space, or NNN deals, etc.

Quite frankly borrowing a million isn't much of a goal in and of itself. What you need to ask yourself is how will you make money with it. 

Do smaller deals, become a real estate investor a portfolio lender wants to do business with.

No sane lender is going to give you that kind of money for your first deal. I did dozens with my banker at $250k-$300k before they started funding $1m+ loans.

If your looking to buy during a down turn when no one wants to touch RE with a 10ft pole you had better have strong relationships with your banker and have access to lots of cash to get good deals.

A $1m crash and burn in 2008 say a failing townhouse project, your going to need hundreds of thousands to get in and turn it around. 

As for rates no one can predict the future but...don't bet against the fed. We are probably going up 1 point this year and one point next.

So for example that means my 5% note will adjust to 7% in 3 years.

In 2008-09 when the credit markets froze a lot of investors with balloons due; used the send in the check like always and pray approach. 

It worked sometimes because the banks didn't want the collateral back.

Balloons are but one commercial loan product offered, you can also get fixed typically either 10 or 15 year, along with regular adjustable mortgages.

Imho that's an awful lot of work for a few hundred bucks a month in profit. Those numbers won't hold I have done 4-8 units in poor areas of town they are a nightmare. Realisticly your going to be chasing checks, getting partials if it's a rough area your tenant pool sucks quite frankly. Cut your paper profit in half real world.  

I'd go find a nice SFH in a solid b/c area you can steal to cut your teeth for your first deal. You'll make the same money but the BS factor will be lower by a massive margin.

Ymmv  

Timing the market is a fools errand. 

Quite frankly I'd love a correction to drive all the newbies out of the market. I miss the days of being able to go to an auction on a sat and grabbing a deal. Now every HGTV expert bids against me and drives the price out of site; I'd love to see them slaughtered by a downturn. 

To put it bluntly your friend could be in a world of hurt. He is 55 with all of his retirement savings tied up in what I'll call newbie screw up one and two. on top of that he didn't have the cash to properly finance them so has what over $5k a month in holding costs including taxes and insurance?

I'm going to give you better advice to give to him than the guru, for free. I'm also probably far, far more experienced in this area than the moron guru.

Here is what has to happen to head off a harsh financial lesson: 

1. Call the three top dogs in re sales in your area. In any location 10% of the agents push all the dirt. Find them forget about the rest.

2. Ask them what they think.

3. Regardless of what your friend feels they are worth list them at the lower end of their range.

4. Pray to whomever they want that they don't have to come to the closing with a check.

Good luck 

In theory if those numbers are anywhere close to reality he might despite himself make a buck. But the simple fact of market rejection at that price tells me they are not. Price fixes all in this game! 

In today's low interest rate environment your nuts to even consider an ARM.

Interest rates can only go up, period it's a loosing bet.

Somewhere in the 4% range isn't horrible on a jumbo take the 30 year fixed and run.