47: Apartment Complexes, NNN Leases, and Commercial Real Estate with Joel Owens | Bigger Pockets Podcast
How do you like the idea of making double digit returns while not needing to lift a finger with your investments? If so – this is the show for you. On this 47th episode of the BiggerPockets Podcast we sit down with commercial real estate investor and broker Joel Owens to learn strategies for getting started with commercial real estate investing. From apartment complexes to NNN lease investing and a lot more, this show is packed full of tips for investors in all walks of life.
In This Show, We Cover:
How Joel got his start… from Pizza Owner to Apartment Broker/Buyer
Joel’s first investment… that turned bad quickly
What makes an A, B, C, and D neighborhood
How much does it really cost to buy commercial real estate?
Should someone start with apartments or single family properties?
Where to find apartment complexes and other commercial properties
How to determine the value of an apartment
How to carry out the “Value Add” strategy
No money down commercial investing?
Carrying a second mortgage when selling real estate
NNN Lease Investing – How to get started with this passive investments
And a LOT more
Links from the Show
Costar
Loopnet
BiggerPockets.com/calc
BiggerPockets.com/meet
Introduction to Real Estate Investment Deal Analysis by J Scott – (Great blog post about analyzing properties)
Books Mentioned in the Show
Dealmaker’s Guide to Commercial Real Estate: Strategy and Practice for the Intelligent Investor by Ray Alcorn
Tweetable Topics
“You have to have a certain mentality to live next to your tenants… I don’t have that personality.” (Tweet This!)
“If you are used to buying houses, apartment investing is the easiest to get into.” (Tweet This!)
“Real estate is like a roller coaster – fast lows and fast highs…with a lot of coasting in the middle.” (Tweet This!)
“Run your real estate like a business, not a hobby.” (Tweet This!)
“Small steps lead to big results.” (Tweet This!)
Connect with Joel
Joel’s BiggerPockets Profile
Joel’s Website: AWCommercial.com
Example of Income Approach Math
Property Type: 4 Plex
Income Per Unit: $400
Gross Monthly Income: $1600
Gross Expected Income: $19200
Subtract out all operating expenses (60%) $19,200 x .4 = $7,680
Net Operating Income: $7,680
Divide by Purchase Price to get Cap Rate: $7,680/100,000 = 7.68%
Cap Rate: 7.68%
Example of How to Determine How Much You Can Afford
Cash Down Payment, 10%: $300,000
Seller held back a 15% second mortgage: $450,000
Total Purchase Price: $3,000,000
First Mortgage: $2,250,000
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