Re: New to commercial investing

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Posted by Kulk on November 17, 2008 at 08:02:39:

In Reply to: Re: New to commercial investing posted by david on November 17, 2008 at 00:19:28:

David, I like your ambition but I would recommend starting with something smaller, like a house. The fact that you said managing an complex is easily solved by hiring a management company tells me you have little or no experience.

I'm sure you have a good foundation of knowledge and it sounds like you know knowledgeable people to give you advice, but there are so many ways you can screw yourself over in real estate. I had the same ambition when I first started - I wanted to go straight to the big apartment complexes and own the world, but I really screwed up and it took me several years to recover.

How's your construction knowledge? Do you understand building components, mechanical systems, electrical, plumbing, and their economic lives? Would you recognize a problem if it were right in front of your face? It's the things you don't see that get you.

You must have found the deal of the century to use 100% hard money and still have cash flow. Don't make the numbers what you want, be realistic in your expenses and vacancy. Trust me, the best way to build wealth in real estate is to be patient and start with a solid foundation. I do wish the best of luck to you because I'm afraid you're mostly relying on luck on this point. I would like for you to post the deal you're looking at with your projected pro forma so we can take a look...

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