Commercial Property Education

Michael

I for one - would be very interested in attending such a seminar. I had the fortune to attend one of your evening seminars in 2004 in Sydney on residential property investing -and it made a lot of sense.
I guess what I am interested in hearing is:

# The differences in each type of CP - retail/industrial/offices etc
# How to value a property
# Understanding the contract of sale
# Understanding the lease
# Finance tips
# Property management tips

+ any other tips?


Cheers


Sam
 
Michael that is good to hear re. the seminar in the works.

Sam H,

I have seen the McCombie DVD's (a few years back though), he is a NZ chap, that has invested in commercial property in Australia, and points out that he has made money here largely by investing as opposed to development.

From what I recall, it was a reasonably good DVD set, reasonably priced and fairly practical information - as he goes through worked examples of buying a commercial property and making an offer. Just scratches the surface though, and perhaps not enough depth on some key areas, eg, property valuation.

GSJ
 
GSJ

Thanks for that.I am primarily interested in retail commercial property. I did hear a small snipet from a McCombie interview - sounded good - but perhaps more focused on industrial/office CP? Any idea if it spends much time with retail CP?

Thanks again

Sam
 
hi all
couple of things with regards to comm investing.
1. get a property that is easy to lease to a targeted market so if its a bank for interest make sure that the bank s going to stay there or that the area is growing nad they will need to keep the bank.
2. try to gauge if the comm is easy to release and
if it needs refurb for a market that is in demand in that area for that type of comm
doctors legals what ever.
3.the sale price and the buy price is dependant of the lease and the value does not increase like resi
so you need to work out your tennant against the return you want to achieve and the long term viability of that tennant.
4.lender only lend up to 70% as the norm but I have got westpac to 80% but using bank bill rate.
5.the returns are around the 10% for comm so its good returns but very low growth curves as the norm again.
6.remember it always looks greener on the other side of the fence
so all that glitters is not gold it could be glass so you need to do some very good feasibilty workout before you buy.
7. buy something you can handle ie a shop or an ex bank not a shopping mall with a group of friends and there are few syndicates running around with this view.
8. once you have started to get into comm you will find that you will need either 30% cash or 30% equity to move forward and this is not easy unless you have a plan of doing it and planning is the name of the game.
for me comm is the corner stone of investing and is never sold because it should never have to be.
a good comm in an area that is always in demand is a feeder to you business or structure.
9. and this is very important resi, comm or other (hotel's,community services or large institutions) are all very different markets
and do not run on the same rules or the same mind set,with comm you are not buying a property
you are buying an item that someone will want to lease for a long time with a return
you are not looking at a price tag but a return and that return gives you the price tag.
and is relatively irrelivant what other building have sold for in the area
your building is bought or sold on that return or that potential return.
10. last but not least is the tennant this is the most important part of comm you must be happy with the tennant and you must check out there credentials I aim for the single business and some of mine are on the second board in newcastle so very secure tennants.you want a long haul tennant with a very good rent I lower my rent to start but 6% or cpi increases per year which ever is the higher and after 5 years I am over the market for the area but the tennant is happy, I am happy
and they want to stay,comm is not a quick gain market.
I am no expert in this market and do not profess to be one, I am no expert in any market I am just a mug investor (even the banks don't have a job discription for me so I suppose I could be classed as an unemployed mug investor)so don't go off anything I post just use it as information.
1 side line to this which is very funny, (well to me anyway) is that for an unemployed mug investors they still lend to me and at levels that most full employed financial advicer would not get the lend but thats a very different question,
I think that you need to get in and get dirty as dazzling says and do your own due diligences
 
lender only lend up to 70% as the norm but I have got westpac to 80%
Click to expand...

70% is certainly thew norm, but you can get up to 85% without suffering too badly in terms of rate. Servicability requirements tend to be more strict once you go above 70% however.
 
Hey GSJ

Do you have a link to that pdf on the properrtyoz.com.au website by any chance - couldn't seem to find it?

Thanks

Sam
 
SamH,

Regarding that DVD, I think he focussed on industrial.

The link - click on 'resources', then click on 'build your wealth', then click on 'download your PDF copy'.

GSJ
 
In my view people will always need a HOME to live in and this is why I choose to invest in RESIDENTIAL properties vs COMMERCIAL.

GSJ - You are right however in saying that there is not a lot written on commercial property investing.

My 2 cents worth ...
 
LearningMan said:
In my view people will always need a HOME to live in and this is why I choose to invest in RESIDENTIAL properties vs COMMERCIAL.
Click to expand...

Mind you, they often need a place to work in as well..... :p

(and to go shopping, and for the recreation, etc etc....)

Cheers,

The Y-man
 
all info is good

for my 2c worth, after a few years OS (hence nil posts), it seems that Comm is better than Resi at the minute, although as I heard at a recent simnar, the Aust market is big enough that there is always a boom or bust going on somewehere.

Mike Y, if you read this, ineterested in -

property selection
financing alternatives, and
specilaist commerical agents, to by and potentially to manage.
 
Hi everyone
First of all, thanks very much to all the experienced people who have made posts here to aid in the education of the rest of us. It really is appreciated.
GSJ, thanks for starting the thread, I hope it becomes a great source of information for neophyte commercial property investors.

Just on that link that you posted for Chris Laing, has anyone read his book? If so, is it worth getting? I guess I have been scared off of commercial/industrial by all the well-meaning authors who stated that it was such a huge amount more risky than residential.

A couple of questions for some of the commerical/industrial forum gurus if I may:
1) Would you suggest building up a decent residential portfolio before venturing into commercial? From reading previous posts, Dazzling had 6 or 7 residential before going industrial, so I assume he had a pretty reasonable net asset base to work from. Has this helped a lot?
2) For someone with a lower income, are there any suggestions as to a reasonable entry level of investment into commercial/industrial to make? Is it not worth while looking under $1M for example?
3) Are there any educational resources you folks would recommend (outside the forum)?
4) Would there be a suggested amount of cash you would want available to you before going into a commercial/industrial deal? On the first property I am sure there would be teething problems, slow to get tenants, etc, should you budget on having 6 months interest repayments available before you even look at a property?

Also just for interests sake, I think it would be good to post some links to some commercial/industrial properties currently available, and see if anyone has any comments as to why that might or might not make a good investment. Obviously not from a financial advice point of view, but more just to think of things we may not have originally thought of, or perhaps see it from a different angle. Appreciation in advance to anyone who is kind enough to answer these questions!
The first one to look at for interests sake:
Commercial deal in Perth

Any comments/views/opinions greatly appreciated!
 
hi
I will have a stab at it
just don't put me in any guru class.
I will answer your questions in red first give you my ideas on that deal.


Just on that link that you posted for Chris Laing, has anyone read his book? If so, is it worth getting? I guess I have been scared off of commercial/industrial by all the well-meaning authors who stated that it was such a huge amount more risky than residential not true if you understand what you are looking for I have made alot more losses or correction on resi then comm about 8 to 1 to resi.

A couple of questions for some of the commerical/industrial forum gurus if I may:
1) Would you suggest building up a decent residential portfolio before venturing into commercial? From reading previous posts, Dazzling had 6 or 7 residential before going industrial, so I assume he had a pretty reasonable net asset base to work from. Has this helped a lot? don't know about dirt thats dazzling lot of people you don't need alot of money i have one that was bought for 400k 5 years late it worth 850k I am equity lending against its value as the rent has gone in 5 years from 39k to 52k and I am equity lending against this new value and buying a 3.1 mil come on a 9% return with 3.5% increase per year 15 x 5 x 5 goverment backed this is stand alone no other assests and the loan is being done on rental alone.
2) For someone with a lower income, are there any suggestions as to a reasonable entry level of investment into commercial/industrial to make? Is it not worth while looking under $1M for example? the level depends on your risk profile 400k is a good place to start divide price by net return and get annual increases cpi or 5% is my favourite but if you buy it cheap then a lower annual is ok by me
3) Are there any educational resources you folks would recommend (outside the forum)? your own the best form of education is doing it yourself thats why I don't read books or write them I spend about 5 hrs a day educating myself on the areas that I wish to achieve in currently I am buying comm so I will do a swat analysis on an area just like you would if you were buying a business and you can't find a book on different businesses
4) Would there be a suggested amount of cash you would want available to you before going into a commercial/industrial deal? On the first property I am sure there would be teething problems, slow to get tenants, etc, should you budget on having 6 months interest repayments available before you even look at a property? I have not taken 1 dollar out of my pocket to fund my comm happyI get them on a long lease keep the rent to market to start and get them happy.
for a comm to move out unlike a resi is a very big cost( stationary phones etc so they do not want to move so you work on that and keep the tennant happy non of this wine at christmas just is everything ok I manage my own comm's and they have my mobil and I have there md mobil if there is an issue
rule number 1 is buy quality not quantity for me but dazzling may have a different view but each to his own and good luck to all

Also just for interests sake, I think it would be good to post some links to some commercial/industrial properties currently available, and see if anyone has any comments as to why that might or might not make a good investment. Obviously not from a financial advice point of view, but more just to think of things we may not have originally thought of, or perhaps see it from a different angle. Appreciation in advance to anyone who is kind enough to answer these questions!
The first one to look at for interests sake:
Commercial deal in Perth
not for me this one
why
its a 7% return, price divided rent and no annual increase.
at 3 mil I have two in cbd sydney one at 9% and the other at 7% the 9 is 3.5% annual increase and the 7% is at 5% annual inrease in rent both alot better then this and both have offers on them by me.
and we are haggling about the price one will come over the line.
there are thousands on properties you need to get the grain not the chaf.
and comm is more cut throat then resi as most are +ve to start with so any really good deals wouldn't appear on a board.
both of the deals above have been on the market for over 12 months at the same returns so a 7% no annuals is going to be there for some time if they are waiting for a comm investor to buy it.
I will endevour to link to some that are outside my criteria and would be a good investment for dirt
mine are a very narrow widow that I am looking at.
happy hunting
Any comments/views/opinions greatly appreciated
 
Thanks very much for your reply, appreciate your time.
Just in case I am missing something, that advertisement says: "Annual rent reviews to CPI (min 3% - max 8%)"
Doesnt this mean an increase each year at CPI?
 
Hi :

I've only just joined this Forum, and noticed the feedback on my latest Book.

Yes, you could perhaps describe it as general - in that it covers a fairly wide range of topics. But what it tries to do is deal with the proven fundamentals of CP Investment - rather than "hype you up" on the potential for fast profits.

Maybe you could think of the Book as being the "Graduate" level. Because, I'm actually running an in-depth Workshop, which you'll find is probably pitched more at the "Honours" level of CP Investment.

Anyway, it is a day-long Workshop, which is being held on Saturday 24 February - at the Athenaeum Club, 87 Collins Street, Melbourne.

And you'll see there is also a special discount, if you want to bring along family members.

Hope to see you there.

Regards … Chris Lang
 
  • Like
Reactions: JIT
Hi Chris Lang,

Thanks for coming on board Somersoft.

Look forward to your contributions, your experience will be invaluable to the new Commercial Property Forum.

GSJ
 
Hi GJS and other CP investors ...

Tell me what some of the queries are that you have. And let's see if I can be of any help.

By the way, are you planning to come along to the February Workshop?

Best wishes ... Chris Lang
 
You must log in or register to reply here.

Similar threads

S
First Commercial Property Journey
2
Replies
35
Views
13K
long88
L
I
  • Sticky
End of an Era
12 13 14
Replies
261
Views
154K
Wiseguy
W
Scott No Mates
What's in store for 2014?
Replies
0
Views
2K
Scott No Mates
Scott No Mates
redwing
A beginner's guide to commercial property
Replies
3
Views
5K
Aaron Sice
Aaron Sice
Jake Milne
Deer Park - Write Up
2 3
Replies
44
Views
11K
Roos1
R
Back
Top