Investing in Commercial Real Estate?

Question by Gekko: Investing in Commercial Real Estate?

There is a piece of commercial real estate that is for sale in Illinois. I want to build a small strip center, that can be occupied by 4 separate tenants. As a personal banker, I work with business owners and entrepreneurs all the time. I’ve already found tenants to occupy all 4 spaces. The rent will be $ 3,000.00/mo per tenant, and each tenant must pay their own property taxes and insurance premiums. My only responsibility would be to maintain/service the property (ex. snow removal). The total investment is $ 1,000,000, including construction. The tenants are responsible for building their own stores, which I have nothing to do with. The only obstacle in my way, is that most of money is tied up in stocks that I’m losing A LOT of money in. I only have $ 5,000.00 to put down. If I take out a loan for $ 995,000 for 15 years at 10% (I think it will be much less than 10%) then my monthly payments will be approximately $ 10,700.00, and the property itself will generate $ 12,000 monthly in rent revenue, with $ 1,300.00 being left over monthly. If I go with a 20 year loan, the monthly payments will be even lower. Where can I get financing for this project? Its just raw land as of now, but it will be fully occupied once construction finalizes. Any ideas? Thanks in advance!

Best answer:

Answer by kemperk
i sure do have an idea for you. Many in fact.

build nothing for now. IF you have tenants available, why not find a BK strip center and fill it, and find

another, and fill it. Costs you near nothing and your risk is way less and returns way more…….and you already

know that.

do you have access to VC?

if yes, or at least investors who could be interested, forget your RE investments of 10% return.

I can get you so much more than that.

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Investing in Commercial Real Estate?