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Commercial Property Opportunities coming

But before I get to that. Wish me luck guys, I have a meeting with my bank this week. If everything goes well , I will be completely out of debt. I'm so excited I can't even get my ski mask on.

Every 10 years or so there is a major reset in real estate prices. It sure looked like the Covid in 2020 would be the catalyst for a reset. But the Fed and the politicians fucked us. Near zero rates propelled the commercial and residential markets to new heights instead of a reset. Commercial real estate loans are almost always variable interest rates and mostly short term ( call dates). Banks feasted. But with the huge increase in rates in the last year and many banks struggling, who is going to refinance the trillion dollars in commercial real estate that are coming due? And how many of those commercial borrowers will even qualify given the higher rates and tighter underwriting? By the way, residential properties with 5 units or more are also considered commercial loans.

Residential real estate is still being propped up by the lack of homes for sale. Still too many buyers for the amount of homes available for sale. Simple Supply/Demand relationships.

Don't make nasty faces at commercial real estate opportunities. I like small balance commercial real estate. In 2013 I bought a piece of property on Florence Ave in Los Angeles. Short sale, I paid $147000 for it, financed it with my self directed IRA. Restaurant in front, 4 offices in the back. Rents total $4700 a month, $56,400 a year. 38% cash on cash return. The property is now valued just north of $500,000. If you own a business like Java, consider an SBA loan to finance the purchase. 10% down payment and boom you are in.

I will be looking for retail space and apartment building opportunities.

Good luck!!

10 comments

10 Comments

Java

May 30, 2023

I very much want to buy or build a warehouse in the ie When wiuld timing be good?

we just hit profitability last year on our rebuild. So I’m hoping we can do this. Just don’t know where to start

BigBallss

May 30, 2023

Replying to

Timing may be good in the fourth quarter of this year. I helped a guy with financing to buy a 10,000 sq ft building in Hemet a few years ago.

I only helped with the financing and a commercial realtor found him the building. The payment on the loan turned out to be less than what he was paying for rent. I know a very competent guy that handles SBA loans. I have done several deals with him over the years and he has always been straight up. The first step would be to get a pre approval on the loan. I would be happy to share his info here on the board so you and anyone else interested can talk with him. As far as finding the property a commercial realtor is your best bet. Check out this website too :

loopnet.com

troystory

May 30, 2023

It's city/high rise/office type of commercial real estate that is in the dumper. Warehouses and local shopping malls(one story) is still doing ok, right?

the909trojan

May 30, 2023

Replying to

"I will be looking for retail space and apartment building opportunities."

Curious why retail space?

Also, depending on zoning etc. the commercial conversion to residential space market can be lucrative. It made a colleague of mine quite a bit of money in Kansas City a couple of years ago. He got a ton of redevelopment money to pay for a bulk of the construction - building was empty for about ten years ago but well kept w/ solid bones- and then he converted the space to industrial apartments and gets between $2000 and $4k. Gets a lot of corporate accounts. Last I checked he was at 80+% capacity. Hit 65% in his first year.

BigBallss

May 31, 2023

Replying to

You are a freaking sorcerer. california AB 1532 will give out grants to convert retail and office space to residential housing. More free money. I am in line and I got my hand out. Shhhhhhh. Let’s keep this in WW Wealth board, only the 5 of us that post here.

BigBallss

May 31, 2023

Replying to

Yes. Boomers are going to die in droves in the next few years and leave huge inheritances for Skylar and Brittany. People that follow those trends are saying it will be the biggest wealth transfer in US history. Too bad, I’m out of those sweepstakes. None of the old fuckers on the Politics board will adopt me Just as well they are all broke.