Expert: Brian Bocchieri - 1/1/2009

Question
can you help us to decide what are the pros & cons between...
flipping homes, multifamily apartment bldgs or strip malls.
we are interested in 1 or all. can you help guide us in regards to searching and finding prty, to dwn pymts, where to get financing, which one might be better than another. and of course which would make the best profits? in your opinion of course.

Answer
Darlene

Well where do I begin on this one.

Flipping homes is a good place to start it is a bit tough in this market but still a viable option.  You need to know your costs going into the deal and have multiple exist strategies in order to weather the selling environment which faces us today.  I do not know what your cash position is or how you would finance your deals.  Obviously the best would be cash so that you do not have the carrying costs.  As with any real estate transaction you need to anticipate the unexpected such as cost overruns, or unexpected repairs.  This is no longer the early days when no matter what you did to a property you would make money those days are gone.   So if you are unexperienced be careful and be sure to seek the proper advise.  

Strip malls can be quite lucrative if you can maintain the proper tenant mix this is also not for the faint of heart.  You will need to know your market, cost per square foot, CAM costs, utility costs and how to structure commercial leases.  There is money to be made but you need to know how to play the game.  The most important factor is the strength of your tenant    
and his or her business.  

Multi family is a fairly safe investment considering everyone has to live somewhere. With the raise in foreclosures that group of people will need to relocate to apartment living.  This does create  opportunity but again you need to make your money on the buy side and then manage the project carefully in order to maintain your return on investment.  Please do not get sucked up into the no money down mentality you will be walking on thin ice.  

As for how to fund your deals start with friends and family and start a syndication of pooling your funds to purchase your first deal then move on from there.  

Once you have identified what you want to invest in we can discuss in more detail how to fund the deal.

I hope this has helped

Wishing you all the best

Brian Bocchieri