Discussion in 'Commercial Property' started by JIT, 1st Dec, 2006.
I already said this...
So you did,the old adage if you can't do it then you teach it hardly applies to giving financial advice.
No doubt this woman is on the seminar trail and will be coming to a conference room near you soon. Good Luck!
Small commercial IP's
Just wondering...those who have smaller commercial IP's...say under $1mill...do you use a PM or do you self-manage? What are the pros and cons please? Does have industrial, office or retail make a difference?
Thanks everyone for this great post.
I am negotiating my first commercial investment (very early stages) and need all the information I can get to do any due diligence.
For someone who has no experience in commercial, this thread has been a godsend.
Thank you Chris especially, I have downloaded all your links and subscribed to your site. I look forward to wading through all the information you have provided.
Also thank you everyone who took the time to list all books and resources.
Just to add to the list, here's mortgageman's post linking to Chris Lang's new site and service.
Just had another look at Chris Lang's website, which has now been updated, looks pretty good:
I agree that this thread is a very handy thread for people to get an understanding of commercial property
I am in the middle of doing a commercial purchase at the moment got two out of three vendors as of today and I am a bit like dazzling in that I don't like to post details until the inks dry and even then not sure at this stage.
with regards to the problems for syndicates
the main one for me is that the more people the harder to control.
things change in life and so do people views
and unless you have set up the rules from the start the wheels can come off the wagon very quickly.
this is a very hard learning curve and can setback your project very considerably.
if for instance you have a syndicate with a buy and hold stratergy and suddenly over 51% decide that the project is to be sold
you are in big problems and if there is 9 groups this can very easily happen
so you need to have safeguards in place to avoid this type of problem.
the other problem is in fighting between groups especially if the group is a form of fund and is active investing
again this is people management more then investment managing.
you have to have
set aims for the group.
set exit procedure.
set time frame for the syndicate.
set percentage of profit or return.
the above information is with regards to private unlisted trusts that are setup as syndicates and not listed property trusts.
they are a very different thing and I don't invest in them.
generally you are looking at about a 6.5% return on commercial sydney so for those out looking if the return is higher then this
then thats something to have a close eye on this is just an observation number and is not a rule thats current from the auctions at 55 harrington st sydney ( where alot of the commercial auctions got thru)
For those who are interested, I believe Chris Lang is running another workshop shortly. I have experienced these workshops before and would strongly recommend them.
To register, go to //his-best.biz/2007/11/20/pw08/ss. I think seats are a bit limited so get in early!
Perry Financial Strategies
Did it motivate you enough to go out and buy a CIP afterwards ??
Its not about motivation, I have learnt some good negotiating techniques from Chris, but yes we have a couple of CIP's on the go. Happen to be over your side of the world actually.
Perry Financial Strategies
whats the price and does it tell you were the next movement within commercial property will be.
and which market is going to move next
I can use my crystal ball.
training is very handy and seminars are a good place to learn it depends if the cost out numbers the return.
at the moment except dazzlings little perth most of the eastern is comming off a very low rental increase and floor space ratio's so is a interesting market for all as the post I put up to get current floor space values for the cbd cities and you don't need a seminar to learn this.
but if people like to site down and have a coffee to learn good on them.
For those who are interested, the cost of Chris Lang's upcoming seminar (link below) is $1,100 or $797 for those who enrol before Christmas.
Will Chris Lang come to Perth for his Commercial Property seminars? Us Perthites always seem to miss out on the good stuff!
So Chris get over here i am sure you will have a captive audience waiting for you!
It's been a while ...
Happy New Year to everyone.
And my apologies for not being a great contributor, during the
latter part of last year. Although, I've been keeping a passing
eye on the various postings. And I did appreciate the feedback
from people like ... JIT, mortgageman, The Y-man, Ruby and Pablo.
With the Commercial market being rather strong, it tends to
make my job in acting for Buyers all that more difficult.
Nonetheless, I did manage a few wins for clients ... but it has
been rather hectic.
Also, I have been getting things ready for the next Property
Workshop on Saturday 1 March.
And I couldn't help noticing DebtEquity's comments about holding
a Workshop in Perth. But you know what's interesting: Over 60%
of those who enrol seem to be coming from interstate -- and that
also includes places like Brisbane and Perth.
So, at this stage, it doesn't appear necessary to move outside of
Melbourne. Maybe, because they're held on a Saturday, people are
making a weekend of coming to the Workshops here.
Anyway, with almost everyone taking the week off before Christmas
I've decided to extend the "Early-Bird" registration till the end of
Therefore, you can still take advantage of the discount price:
Last year, there were a number of Somersoft members who joined
me there -- so I'll look forward to seeing a few more of you
along again on Saturday 1 March.
The other thing that I've been beavering away on is the new
Investor's LAB Website. And it's only in its beta stage at the
moment -- so it's certainly nowhere finished at the moment. But
I hope to be in a position to tell you more during February.
Otherwise, let's know if you have any specific queries at all on
Commercial Property -- and I'll do my best to answer them.
All the best ... Chris Lang
Nice to see you back again.
We've had some interesting discussions here recently.
I'd be interested to know what sort of impact the 'credit crunch'/'sub-prime' is having on the commercial property sector in the context of the recent news with Centro and their financing problems and the LPT sector, from your perspective...?
But also more specifically for investors at the direct commercial property level, ie. for those purchasing commercial property individually or via private or public property syndicates or un-listed direct property trusts...?
With the syndicates you are involved in, has there been any difficulting arranging initial finance or re-financing?
Or, is the media distorting the extent of the 'problems' in this market?
I can always count on you to come up with not just one question
but 4 or 5.
As I'll be tied up for the rest of the day, let me think about that
over night ... and I'll come back to you in the morning.
Regards ... Chris
Yes, well, one has to seize the opportunity to pick your brains when they can!
I'm particularly interested in what's happening at the syndicate level with those relatively less costly properties eg. $1MM-$10MM range, that individual investors can get a piece of by pooling resources.
Dazzling also described his recent purchase in a thread here and the extensive difficulties he had with banks and financing it.
Look forward to the reply.
Your various Queries on Finance ...
Sorry -- but it was a hectic morning ... and I wanted to try
and address your queries as best I could in the time I had.
The situation Centro find themselves in ought not spread any
wider; and is basically self-inflicted.
Put simply, it looks as though they got their equity raising
and debt activities out of sinc.
But, by any gauge, their underlying properties are all quality
assets. And yesterday's AFR (pages 38 & 48) included a fairly
well-credentialed list of possible overseas suitors.
On your wider questions about finance ...
These deserve a far more-detailed answer then this will
provide. I guess that's one of the benefits of being able to
spend an entire day with Investors at my Workshops - when you
can explore these types of issues more fully.
Unfortunately, I find the problems most Investors face tend
to stem from paying scant regard to their actual funding
requirements. I think you are already aware of my 9-Step
Investment Formula -- where two of those steps relate solely to
funding your deal.
STEP 3: "How to Sleep Soundly" ... shows you how to ensure the
banks will lend you what you need and expect -- based on the
STEP 6: "How to Lock-in Your Loan Terms" ... covers a clever
technique, which helps to avoid any last-minute surprises.
After nearly 40 years, I've had the chance to examine hundreds
of deals; and get to understand the fundamental aspects of what
you'll need to succeed in Commercial property.
All I've done is break down and reassemble them into
9 simple Steps; and package them in a way that probably
challenges conventional logic.
Sure, I'm causing vendors and lenders to change their way of
doing business. And even some agents are complaining that I'm
divulging their "property secrets".
But, as I am acting for the Buyers ... that's not my concern!
And structured properly, you should be able to remain in control
of your funding needs.
Therefore, the short answer to your question is that none of my
clients have so far had any difficulty in arranging their funding.
Specifically on smaller, Private Syndicates ...
Late last year, I put together a purchase for a small private
syndicate at $3.575 million in Moorabbin. They were able to
arrange some non-recourse funding for that at 8.2% ... fixed for
So, I think the media is distorting things a bit on the effect
of the sub-prime crisis.
But I have a greater concern
And that is with the effect rising interest rates will have on
the value of house prices. I am not really talking about the
much-publicized "trophy" homes. Rather those under $1 million.
For the unsuspecting Commercial investor, the flow-on effect
could be quite devastating. Because ... many investors have used
the equity in their family home as security for their Commercial
Here's a link to where I've covered this in more detail:
One other thing to watch out for ...
It's not quite ready yet ... but I'm putting together a rather
crucial Video for my clients, on the real trouble spots around
If you, or anyone else, are interested ... I could let you know
when its available -- and don't worry, it will be FREE.
I've quickly set up somewhere for you to leave your details --
that way, I can let you know as soon as it's ready ...
Hope this helps to answer your questons.
All the best ... Chris
That's a good point, if they can't refinance their residential properties appropriately, then this could affect their commercial investments too...and it could all fall over!
Ah, sounds good, I've signed up.
Separate names with a comma.