Is Investing in Commercial Real Estate a Good Idea?
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- Опубліковано 22 гру 2018
- 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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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.
I am going to look her up, I have about $81k i want to start with, might be small but it's better than nothing though..
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.
James Storey, CCIM triple net lease for 7% in a good property is a pretty good (possible great) deal. I’ll buy it if he’s not gonna
How realistic is this deal though?
In my experience with Tripple net, the cap rate can also go up the longer you own the building
Latoya Cheeks it’s very available to those who have the capital plus cap rates can raise over time so you may start at 7% but like 10 years down the line it may be at 10%, you just have to check the stipulations of the lease
CCIM???
__In Mouth??
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
lol thats silly.. it depends on WHAT KIND of business... like a restaurant statistically is higher risk.. if it's mcdonalds or starbucks chances are they are staying...
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.
As someone looking to sell some commercial real estate, of course I think it's a solid buy!!
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
Justin Folkins I like that idea and approach
Great information. The key is executing and taking action. Too many people watch and do little to nothing with the information.
Safe to say, not buying CRE was great non action....this aged like fine milk.....even the last decade, WFH and retail bankruptcies was writing on the wall
Absolutely! This was my old self, I would, read over and over , practically hoarding information , but never take action. Action is the key to success
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.
10 cap rate lol where the hood
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!!
NEVER ask Dave how he's doing. He sounds like a broken record with his reply.
He says better than I deserve because of his Salvation through Jesus not because he is a millionaire.
I would be finding it very hard to come up with different responses to this rhetoric question too.... Imagine the number of people calling him EVERYDAY!!! I wish people would learn to open up a conversation with something more interesting than "How are you?".... This question is not only ultra boring, but also forces the other person to lie, if they are not in a good position at that particular time 😀
@@shilpig5 I agree. When people ask me, I say "good!" and leave it at that. I don't respond with another "How are you doing?"
I like it actually, its almost tradition at this point. If I called I'd ask how he was doing just to hear him say it.
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.
He's extremely knowledgeable, but he's super risk adverse because he lost his shirt in the 90s from real estate.
Dave doesn’t get payed to teach real estate
Why not an apartment building? Post office are closing as well.
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.
Crazy , I’m from Little Rock
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
Where do you look for properties like this?
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.
thats a great point, commercial tenants are gonna demand the lowest dollar for rent
As manny khoshbin said Timing and location is everything
“Lease to toys r us”
Real Estate can be good but years ago did some Real Estate investing but dealing with the tenants at time could be 3 full time jobs. The rewards where good in the long run but sketchy at times.
No risk no reward. Craps is a good game at the casino.
@Dustin Shults Exactly
The only commercial property you need to be associated with is the ad in the video you're being recorded for.
What millionaires talk about LOL
These guys are not millionaires they are both wussy risk takers and should stay out ALL TOGETHER.
@@adonttrip2109 They're literally both millionaires. The caller has a couple million, and Dave at this point probably has a net worth of a couple hundred million.
@@everonlyallforthee dave probably has 30 to 40 mil... id be shocked if he had 100 mil, bill maher and mitt romney have 100 mil
@STRANDED well the street estimates 200 mil, but investopedia estimates 50 mil
@STRANDED if thats true its really stupid lol, the average return of the sp500 is 10%, the average mortgage rate is 4%... so instead of making 6% on his 70 million every year, he just gave away his 70 million lol
How do I invest and do it responsible
Sounds like dave knows about 5 buzz words for CRE, and not much else, he convinced the guy on the phone though
It’s a seven minute video dude. Dave owns a ton of properties. He knows what he’s talking about
WalGreens are closing like crazy
Zero Risk of Default on Post Office NNN - Really Dave.
Buy an apartment building.
For those who are in a rush:
No.
Seriously that's it.
Don't believe me? Watch the whole video.
That's what I thought
LOL 😂
Casper Trader yes it is worth it
... he said go for it. Triple net properties are gold mines
I’m not in a rush but my skin crawls daily with that much money earning .06 in my savings account. I am settling on Red Lobster in a market like Atlanta or DALLAS.
How about flipping houses and turning it to commercial small buildings? Is that a good thing to invest in real estate?
Depending were and market demand. Most of the time id say no. Leave residential . Residental. Taxes rates are alot more there legal fees and city fees to converts. Most commercial sales for less then residential.
I want to invest as little time as possible. I think flipping would pull from my main source of income.
@@kingbowser2466 Commercial real estate is an excellent investment. The beauty of it is which I'm sure you'll understand as a business owner is that you can start small. Starting small in commercial real estate is awesome. You can start with 5 to 20 units and continue to scale if you choose to. It will be far easier for you because you have access to cash which is great. And I strongly recommend you by the property out right. You're return on investment will be astronomical over time with the right purchase. Just due your due diligence FIRST! And figure out what type of commercial real estate you're interested in. Apartments, Retail, Hotels etc.. You only need one solid deal in commercial real estate to create wealth. Start out contacting brokers, agents, attorneys and asking questions they'll help you.
You probably can’t because of residential zoning permits
Index fund not good enough for him?
Nick S I’m the caller. What would your recommendation be? The call was good but I still have questions. I’m seeking and getting more answers from industry experts. The reason I called Dave is I am ultra conservative. Plus I own a very profitable high yield business and it’s very important that I don’t lose anything from it as I try and get the savings to work as well.
muni bonds and vanguards vti
@@kingbowser2466 I highly recommend picking the book "The Simple Path to Wealth" By JL Collins. Extremely simple investing but it taught me a lot. You can also look him up on UA-cam, as he is a guest on numerous podcasts and channels. As Chris below stated....VTI. JL Collins is a fan of the index fund VTSAX of which VTI is the ETF version.Congrats on your success!!
BJJ Freak82 thank you. I will check it out !!
Sounds like it’s as much a tax issue as it is a return issue. No tax love with mutual funds.
This man is juicy
The post office is not the government . It's quasi government meaning they operate like the government. They are considered a a grade tenant. Also dont be so focused on buying and using cap rates.
CDs...really???
Lindsey Velveeta yes. It depends on the bank and their interest rates. I mix them in with my portfolio.
I know but I was just being truthful. 3% compared to my current .06 is a nice jump. I’m good in the business I own and operate but outside of that I’m learning.
with all due respect, why not ask advice from commercial investors? wrap lending could possible give higher returns
Let’s go Brandon
USPS is not part of the government. One of the biggest misconceptions.
The United States Postal Service is an independent agency of the executive branch of the United States federal government responsible for providing postal service in the United States.
Are you talking about UPS or FEDEX
Mohamed Isak yes it is....it’s just ran independently
Backed by the US gov though
It is. Why do you think they are legally required to deliver to every address in the US, even if its unprofitable to reach rural Montana or hillbilly land West Virginia.
So far I've become multimillionaire by not listening to Dave Ramsey
Doing what? Care to share?
No!!!! Short answer!
Guess who? Please elaborate if you don’t mind :)
@@kingbowser2466 unless you are COMPLETELY OUT OF DEBT!!! That's means your house and everything else it's a bad idea! Unless you are paying for it with cash 💰!! No debt, remember debt is dumb!
I am 100% out of debt. I have one credit card and at the end of the month if I owe 900 I pay 950. I’m that guy :). I use it for business and office expenses. I have 4 kids and I was putting money in a 529 when I was 21. All their college is paid for.
I’m looking for ways to diversify so I’m not chained to my desk the rest of my life. Not sure I can or could pull away but I want to be able
@@kingbowser2466 king or whatever your real name is you need to call into the D. R. Show.
No. Also, if you have 2 million dollars cash, just relax and do nothing.
Nah; you need to be worried about bail-ins. Maybe buy two-year T-bills.
@@EMichaelBall C'mon man really. Well, I just surpassed 700k, and I am not worried about shyte! I'll just continue to build, build, build slowly. No mortgage, no car note, no females in my freaking pocket, ie. wife, ex-wives, baby momma nonsense. Free and clear. So, if you have significant money in mutual fund, or/and a bank account, just continue to save and spend wisely. That's the secret. And don't get mixed up with women😉
@SOUNDDUO MUSIC Nothing at all.
@@fpridgeway Seriously, look it up. The FDIC is now the clearinghouse to manage a bail-in of customer deposits in case of the need for a bank to be recapitalized in a debt default crisis. You're better off putting $500k in two-year T-bills. Maybe buy some precious metals and a safe to put them in.
@@fpridgeway congrats mate hopefully I'm in your position one day. I'm 32 and in 4 -7 years my home will be paid off. My friends think I'm mad spending so much time planning and investing for my retirement... thats when I knew I was doing the right thing by not following the crowd.