In my last blog post (awhile ago), I wrote about wanting to delve into the world of real estate investing.
Well, my husband, Andrew, and I bought our first property. Â It is not what I had originally had in mind, but it makes so much more sense!
We bought an office condo for Andrew’s law practice. Â This is an owner occupied property, but our first property that we will not be living in. Â It is something that we can definitely hold on to, and when (and if) Andrew ever retires, we can lease it out.
I acted as the buyer’s agent for this transaction and I learned a lot about commercial real estate!
I decided that I would take my continuing education classes in commercial real estate and learn everything I could about commercial real estate.
What I learned is that commercial is so much different than residential. Â There are a few listings on MLS, but not much. Â The listingsÂ that are truly worth looking at are elsewhere. Â It took a bit of research to find those listings. Â Once I did find those listings, I was able to find a few properties for us to look at. Â Each property is unique so you can not research 3 bedroom 2 bathroom in a certain area and have a bunch of properties pop up. Â You really have to sift through each one, and it is much more of a numbers game than residential where emotions run the show.
I learned that even though commercial real estate is much slower paced that residential, some properties are hard to find. Â I rushed to get our offer in the day after we saw it and it was accepted. Â They did end up receiving two back up offers. Â This type of property, in this area, and in this price range only comes on the market about once a year from what I have seen. Â Commercial agents do not seem to work much on the weekends contrary to residential Â when a good portion of our business takes place.
The seller’s agent was a super nice guy and walked me through the process of the purchase. Â Some things were of course similar such as the option period, inspections, etc.
We are doing some work on the condo before we move in. Â We are remodeling the kitchenette, bathroom, replacing the floor, and replacing the very old and out of code HVAC unit. Â We hope to move in by August 1st.
Andrew has another year left on his current lease, and so we are going to sublease that space. Â Another first for me in commercial real estate.
People have asked why we chose to purchase an office rather than just renting. Â This purchase will save us about $800 a month in rent this year. Â Every year, the rent increases and every 2-3 years we have to sign another lease with increased rent. Â Andrew has been in his current space for 10 years now and the rent has increase over $1000 per month in the 10 years.
For the next 15 years, our mortgage will remain steady, and then we will own it. Â The only fees we will continue to have are HOA dues and property taxes. Â This seems like a win win!
I do not know if we will continue to invest in commercial real estate or head into residential, but our goal is to buy one property a year and see how it goes.
If you or anyone you know is interested in purchasing a small commercial property or office condo please have them contact me at 512-914-2573. Â I would love to help them!