Is Investing in Commercial Real Estate a Good Idea?

Micah has accumulated a good amount of cash in his savings account and is looking for a safe way to invest it. He asks Dave if investing in commercial real estate is a good idea.

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[jamesstoreyccim]

If you can get a 7% CAP on a commercial building with a 10 year triple net lease with rent increases, you can get a pretty attractive return comparative to the market. Done several of them with multiple investors.

[MIKExMASSACREx]

If commercial real estate crashes and you can scoop them up for a good price than of course it’s a good investment but you have to look at the location too, commercial real estate in big cities are obviously better. But if you can get some in a big city your basically guaranteed continuous income, you can trust business’s more than tenants

[graywilliams_.]

investment requires good experience and knowledge to carry out a good and successful trade, I have lost a lot trying to trade all by myselfMay I ask which investments are good? I've been looking at a few different ones but want others' opinions as well.

[JSM]

If your benchmark is investing in CDs, just invest in index funds. No work whatsoever, and they've averaged.9.8% over the past 90 years. If he's that risk adverse, she shouldn't be buying commercial real estate.

[paulargueta]

Great information. The key is executing and taking action. Too many people watch and do little to nothing with the information.

[EMichaelBall]

As someone looking to sell some commercial real estate, of course I think it's a solid buy!!

[BobWalton]

Totally agree. However, in my area, a 7.0% Cap Rat is hard to get because of the crazy money printing that's been going on of late and institutional investors buying properties up with cash.

[JustinFolkins_CRE]

Lol do not put all cash into one deal. If you were smart leverage your cash into a few properties. 40-50% down. Industrial properties or retail both multi-tenant

[andreakumar]

I wish Dave would talk more real estate in depth. He’s knowledgeable and it’s great for offensive finances. But that’s not his schtick I guess.. his main focus is getting people out of debt.
It’s a little more vague and on your own baby step 4 onwards.

[g.t.g]

Why not an apartment building? Post office are closing as well.

[Tallmark]

NEVER ask Dave how he's doing. He sounds like a broken record with his reply.

[Wildboy]

thats a great point, commercial tenants are gonna demand the lowest dollar for rent

[JonSchoeller]

It sounds like less work for a smaller return, which is typical. Of course you could find and manage your own tenants and increases your return by 3 to 10% depending on how much you get the building for and are able to rent it for. Good luck!!

[Zenas]

It's like Dave said, look well into the matter, are they financially solid? This is called doing your due diligence. If they have fewer liabilities than performing assets, it should be a good fit for you.

[youngfinance]

As manny khoshbin said Timing and location is everything

[kyledean]

Good info here. Dave had great insight. The one thing I would add is that you can hire property managers (if you don't own a property management company) and they can help you since you do not have time to invest.

[niliya]

Where do you look for properties like this?

[Myvirtualbulldog]

Sounds like dave knows about 5 buzz words for CRE, and not much else, he convinced the guy on the phone though

[papasmurf]

The only commercial property you need to be associated with is the ad in the video you're being recorded for.

[nightfly]

Id feel les as risk to have a 6 plexs commercial then just one big building. Also if you have any idea how construction works you can often build a new Building for less then a old one . A new building smell appeals to hirr rent and lower insurance ect. If you got 2 million to spend. Id invest in ford stocks there in a low price atm even keep eye on tesla. Bin seeing 40% retuns every 6 months if you cash out on 4th quarter and re buy by the end of the second