Expert: Terrence Cullen - 8/15/2010

Question
I would like to buy a commerical property somehow. I have decent credit, around 700. I have about 150-250k cash on hand as well to get a deal done. The bigger the better as Id love to have 10k/month positive cashflow if possible. Is this possible or a bit too ambitious? Thanks

Answer
Most investment groups will promise between 12-20%, so your request for 10k flow is not unreasonable. Keep in mind the transaction period is not figured in the IRR for the most part and with the current state of commercial financing, the period of time it takes to get financing is going to be longer than promised in almost all cases. Also, the percentage of deals that never happen despite competent diligence is geometrically higher than 5 years ago.
The good news is that cash talks and if your are partnered with an active builder/investor you can make up to the 20% return. If you go on your own you have to be very selective. You would have to buy a building with a solid tenant on a long term lease and establish yourself with a local bank or credit union. Where you are looking makes a major difference. Washington, DC is a solid market and parts of Texas seem to be coming round. New York still has issues, etc., etc. Let me know where and I will see if I can help.
Good Luck TC