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128 Why I Bought Four Commercial Rentals this Year

662 views · Published 24 November 2017 · 24:23 · Indexed 20 October 2026

Channel: InvestFourMore Real Estate · 2017 · Education

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I made a plan to purchase 100 rental properties back in 2013. When I made that plan I thought I could keep buying great residential rentals in Colorado. I had no idea prices would almost tipple, while rents went up only 50 percent. Because of the market I have had to change the way I invest. I bought my last residential rental in 2015, and have been focused on flipping instead. I like to make goals every year and for 2017 I did not have plan for buying rental property, although I did want to find a new market to invest in and invest in a 50,000 square foot or larger building. I have bought four smaller commercial properties this year, which was better than I could have hoped for. At one point this year I had a 280,000 square foot building under contract, and I have a 70,000 square foot commercial property under contract now. To hear all about my commercial investments, how my strategy has changed, and what I plan to do in the future make sure to listen to this episode of the InvestFourMore Real Estate Podcast.

 What kind of commercial properties did I buy this year? I started out this year getting a commercial property under contract in January. It was a furniture restoration shop with about 3,000 square feet that was listed for $110,000 on the MLS. I was not looking for this type of property, but I saw it come up for sale at a very cheap price. I saw the price and made an offer the same day. I did not buy that property for 11 months because of tax liens, but we finally closed a couple of weeks ago. The old owner is renting it back for $1,500 a month.

  Rental property number 20

 The first property I bought was a small shop to store my building supplies and a couple of cars in. A friend wanted to sell this shop, and I told him I would be interested in purchasing it. We came up with a price and I bought that in April and it has been really nice to have. I also think it would make money if I were to rent it out as I only paid $72,500 for it.

  Rental Property number 17

 The second rental property I bought this year was a large office building that I found on the MLS. It had been on the market for months and they kept lowering the price. The property has over 7,000 square feet and I bought it for $292,000. We are currently doing a little work on it, and trying to get it leased.

  Rental Property number 18

 The third commercial rental property I bought this year, I found on Facebook. The property was severely under priced at $79,900 and the seller ended up getting 8 offers in the first two days. I bought it for $101,250 and I am looking to rent it for $1,300 to $1,500.

  Rental Property number 19

 These rentals all will cash flow much better than any residential rental I could buy in my area. It is also a lot easier to invest in properties that are in my market,  than to go out of state.

 How have I tried to accomplish my goal to purchase a 50,000 square foot commercial building? Earlier this year I was able to get a 280,000 square foot building under contract for a couple million dollars. The property came with 19 acres, and a bunch of water, but it was in complete disrepair. I got bids to repair it, which came in at over 5 million dollars. There was also a severe access issue that ultimately killed the deal. I learned a lot about commercial real estate from this property. It had a ton of potential, but in the end too many problems to risk buying it.

 I did not give up on my goal to buy a huge building. In fact, I have a 70,000 square building under contract now that consists of a restaurant, grocery store, a coffee shop, and some vacant space. This property is around the same price as the other building I tried to buy, but has paying tenants and needs almost no work. This property is a great deal mostly because the grocery store pays very low rent. I am set to close on this deal in January, but there is a lot that has to be done before then.

  Buying commercial real estate.

  

  EPISODE 128 

   [INTRODUCTION] 

     

   [0:00:13.9] MF: Welcome to the Invest Four More Real Estate Podcast. My name is Mark Ferguson and I am your host. I am a house flipper. I flip 10 to 15 houses a year, I own 13 rental properties, with a goal to buy 100 by 2023. I’m also a real estate agent. I’ve been licensed since ’01, I run a team of nine and we sell close to 200 houses a year.  

   So on this show, we like to interview house flippers, landlords and the best real estate agents in the business. So stay tuned for some great shows, if you want more information on my rentals, on the numbers, how I buy properties, check out investfourmore.com. 

     

   [EPISODE] 

     

   [0:00:58.9] MF: Hey everyone, it’s Mark Ferguson with InvestFourMore. Welcome to the episode of the InvestFourMore Real Estate Podcast. Today, I’m going to be talking about commercial properties. I have...

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