All Forum Posts by: Mark Donnelly

I actually tried direct email to about 5000 people but never got a single response. How many people do you direct email at one time? Did you sort by geography or some other criteria?

Corporate Recruiter in the Pharmaceutical Industry

I know this is an older thread but I would caution you in looking to quickly leverage a commercial investment like you can in residential.

Unlike residential where value can (used to) shoot up over a period of months for a variety of reason - no. of units availabe in complex, proximity to amenities, etc...in commercial investments the value is always tied to the income and generally investment properties in an area trade at the same Cap Rate. 2 years ago you would see properties trade at 5-6% Cap Rates, now we are seeing 7-8% Cap Rates for investment properties.

Point being, the only way to increase the value of a commercial investment property to the point where you could pull some cash out of it is to drastically raise the revenue the building is producing.

So you will want to target value-add properties where maybe some minor renovations can be made or rents can simply be raised to market. In the later case, if you do buy a property with below market rents, make sure most of the tenants are not locked into long terms leases where those rents are locked in.

Why dont you just become a commercial real estate broker?

Just as a heads up, there is no shortage of commercial buyers for good properties and most commercial transacations are bought and sold "off-market"

If you successfully find a solid commercial property, you should have no problem finding buyers.

If you were not a licensed agent, but you wrap up a property somehow with an assignable contract, you could always just post it on Loopnet. You do not have to be an agent advertise properties for sale on there and anyone looking for commercial properties generally goes there first. It is essentially the MLS system for commercial and anyone can post there or go there.

To answer the question from phcapital, yes, you do get tax benefits of depreciation with a TIC as well as regular income distributions from rents.

As stated earlier, they are ideal for someone who wants to have ownership of larger scale retail centers or office buildings they otherwise would not have access to with the amount of capital you have to invest.

The only tricky part about them is the exit, which was also stated earlier. I have some clients who have had them and they get offers on a property. Unless all members accept that offer, you cannot move the property.

Also if a market heads south and rents fall, it could also be tricky to get out of.

The promoters make it seem like they are turn key almost guaranteed investments but you want to make sure you do as much due diligence as with any commercial real estate investment because in a lot of cases, you probably will be investing outside of your geographic area in markets you are not as familiar with.

Assuming you get into a solid proeprty, I personally think they are a great investment vehicle

I dont own any self storage but work with several operators in helping them acquire facilities.

I would say if you can pick up a building for $2 a sq ft, you are in great shape regardless of what you try to do with it.

For storage, I have a client who retro-fitted an old factory into self storage and he said it cost him about $20 sq ft. He is making a killing on the buiding now too.

As for self storage markets and sustainability, the main thing you would want to concern yourself with if there is a high barrier to entry in your market. For storage, that would include large plots of vacant land within a 5 mile radius and/or other vacant buildings in the immediate are with that type of square footage.

Worst case scenerio is that you open up, get leased up, and then someone opens up down the street at lower rents and drags your profit down.

As far as running it, most of the national companies also manager other people properties for about 6% of the gross income a month and they put their brand on it. They may help with helping you with the design, etc..as well, but I am not positive on that.

Your other option would simply be to tie up the property, get it approved for storage and quickly flip it to a storage company.

Sorry....this post is officially ALL OVER THE PLACE!!!! :woohoo:

I actually purchased Darrin Garman's Commercial Broker tool and I have had the same experience with this product.

He claims to provide all these great ideas, but all he does is forward mini- "pep talks" and really not much substance on clear things to do except for a couple of hokey ideas about referral contents and giving lectures. Nothing too ground breaking.

For example, he says he will give you his free reports that he "gets all of this business from" by sending them to clients. But they are crudely copied articles from books that look like they were printed 20 years ago and you cannot even go in an brand them with your own info.

I get the impression he is trying to apply the "internet marketing" and "making easy money on the internet" principals to real estate, which I actually admire. I just think most of the products are a little over blown in terms of what they provide and deliver.

I work with a lot of investors and would be happy to help you out. Feel free to drop me a line anytime.

I was just curious if any residential agents are considering or making the move to commercial real estate sales?

I made the move over a year ago and earned 20 x more in my first year in commercial sales than I did in residential. I know most people have reserations about it, but I have found applying the residential marketing practices to commercial sales yeilds great results because none of the commercial brokers do any of the stuff we do.

With the market the way it is in home sales, I was just wondering if anyone else was considering going to the "darkside"

If anyone is, there is a lot of opportunity to be successful

I am a commercial agent in NJ and am always looking at new ways to improve my business.

What did you have in mind in terms of partnering with your firm?