| IMHO, the biggest risk in commercial RE.. |
2011-08-02 15:36:05 |
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IMHO, the biggest risk investing in commercial RE for small investors, be the length of vacancy, it may years to refill the space up, and that negative cash flow can easily break any small investor's back.
at one point, after my land development project, I was aggressively looking into bigger commercial projects, there were two hotel projects I look into, one is a foreclosed holiday inn, 256 rooms, the other one was converting a Indianapolis downtown building into mix use, with retail/office space and 86 hotel rooms.
4-5 of us partners pool some money together, we did some extensive study, and gave up, these types of projects just too big from our taste, even with loans from bank, we still need 2-3 mil in cash for day to day operations....
from then on, I decide to only focus mainly in residential multifamily dwellings. The only commercial stuff I own, is a small 10 units office condo, which I bought from Chase, when I got it, the bank already kick every tenant out, and took me 2 and half years to fill it back up.
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