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  • May 26, 2010 at 9:38 PM #17496
    Coronita
    Participant

    Dumb question.

    How does one value commercial real estate on whether something is a “good buy” or not? Not that I’m going into buying one anytime soon. Far from it… I’m just curious, for folks that either own or have owned commercial properties. Is there a primer on purchasing Commercial RE someone could recommend just to get basic understanding.

    May 26, 2010 at 11:28 PM #554709
    SD Realtor
    Participant

    FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.

    May 26, 2010 at 11:28 PM #554815
    SD Realtor
    Participant

    FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.

    May 26, 2010 at 11:28 PM #555299
    SD Realtor
    Participant

    FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.

    May 26, 2010 at 11:28 PM #555398
    SD Realtor
    Participant

    FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.

    May 26, 2010 at 11:28 PM #555673
    SD Realtor
    Participant

    FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.

    May 27, 2010 at 5:48 AM #554738
    Coronita
    Participant

    [quote=SD Realtor]FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.[/quote]

    Thanks for the suggestion. I didn’t know about SDCIA.

    May 27, 2010 at 5:48 AM #554844
    Coronita
    Participant

    [quote=SD Realtor]FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.[/quote]

    Thanks for the suggestion. I didn’t know about SDCIA.

    May 27, 2010 at 5:48 AM #555329
    Coronita
    Participant

    [quote=SD Realtor]FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.[/quote]

    Thanks for the suggestion. I didn’t know about SDCIA.

    May 27, 2010 at 5:48 AM #555426
    Coronita
    Participant

    [quote=SD Realtor]FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.[/quote]

    Thanks for the suggestion. I didn’t know about SDCIA.

    May 27, 2010 at 5:48 AM #555701
    Coronita
    Participant

    [quote=SD Realtor]FLU the only experience i have with commercial is with leases. You may want to check at SDCIA as there are alot more investors on that site and post your question.[/quote]

    Thanks for the suggestion. I didn’t know about SDCIA.

    May 27, 2010 at 6:30 AM #554748
    investor
    Participant

    Call marcus millichap, the largest commercial real estate agents in the US. Ask about financing, which is key for commercial. Most financing is based on 20 year amortization with a baloon (with re-appraisal) at 3-10 years. This is what is getting most commercial owners/lenders right now. The loans should be non-recourse and most leases are triple net, which means that the tenant pays for taxes, upkeep and utlities. No, there isn’t a course that I know of. It’s amazing that something so important should be taught by the school of hard knocks but it is. Advice: do not value a property by projections of future rents. Value the buy on the past performance. Values are based on cap rates, which are simply the yearly rate of return divided by the purchase price. Inverse of a P/E ratio of stocks. There is much confusion over what cap rates are but it is as I have explained.Commercial is in a free fall and is related strongly to rents. You are buying cash flow (rents) so if the economy is not good and won’t be good for awhile, the property may not be a good value. Good luck!!!

    May 27, 2010 at 6:30 AM #554854
    investor
    Participant

    Call marcus millichap, the largest commercial real estate agents in the US. Ask about financing, which is key for commercial. Most financing is based on 20 year amortization with a baloon (with re-appraisal) at 3-10 years. This is what is getting most commercial owners/lenders right now. The loans should be non-recourse and most leases are triple net, which means that the tenant pays for taxes, upkeep and utlities. No, there isn’t a course that I know of. It’s amazing that something so important should be taught by the school of hard knocks but it is. Advice: do not value a property by projections of future rents. Value the buy on the past performance. Values are based on cap rates, which are simply the yearly rate of return divided by the purchase price. Inverse of a P/E ratio of stocks. There is much confusion over what cap rates are but it is as I have explained.Commercial is in a free fall and is related strongly to rents. You are buying cash flow (rents) so if the economy is not good and won’t be good for awhile, the property may not be a good value. Good luck!!!

    May 27, 2010 at 6:30 AM #555339
    investor
    Participant

    Call marcus millichap, the largest commercial real estate agents in the US. Ask about financing, which is key for commercial. Most financing is based on 20 year amortization with a baloon (with re-appraisal) at 3-10 years. This is what is getting most commercial owners/lenders right now. The loans should be non-recourse and most leases are triple net, which means that the tenant pays for taxes, upkeep and utlities. No, there isn’t a course that I know of. It’s amazing that something so important should be taught by the school of hard knocks but it is. Advice: do not value a property by projections of future rents. Value the buy on the past performance. Values are based on cap rates, which are simply the yearly rate of return divided by the purchase price. Inverse of a P/E ratio of stocks. There is much confusion over what cap rates are but it is as I have explained.Commercial is in a free fall and is related strongly to rents. You are buying cash flow (rents) so if the economy is not good and won’t be good for awhile, the property may not be a good value. Good luck!!!

    May 27, 2010 at 6:30 AM #555436
    investor
    Participant

    Call marcus millichap, the largest commercial real estate agents in the US. Ask about financing, which is key for commercial. Most financing is based on 20 year amortization with a baloon (with re-appraisal) at 3-10 years. This is what is getting most commercial owners/lenders right now. The loans should be non-recourse and most leases are triple net, which means that the tenant pays for taxes, upkeep and utlities. No, there isn’t a course that I know of. It’s amazing that something so important should be taught by the school of hard knocks but it is. Advice: do not value a property by projections of future rents. Value the buy on the past performance. Values are based on cap rates, which are simply the yearly rate of return divided by the purchase price. Inverse of a P/E ratio of stocks. There is much confusion over what cap rates are but it is as I have explained.Commercial is in a free fall and is related strongly to rents. You are buying cash flow (rents) so if the economy is not good and won’t be good for awhile, the property may not be a good value. Good luck!!!

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